For the blockchain and cryptocurrency industry, Initial Coin Offerings (ICOs) have replaced the traditional stock market strategy of Initial Price Offerings (IPOs). The holding of an ICO requires investors to put in money for a company before any initial product has been created.
This money then funds the development and operational costs of the recipient’s company. Although it may seem challenging to accept that many investors are willing to contribute money before viewing any finished product, the crypto sector has seen huge success with this formula.
The design of the IPO structure has been adjusted to comply with the differences of the crypto and blockchain industry. IPOs granted investors part of the company via stock shares, while ICOs allocates investors digital coins. These coins are usually utilized within an online ecosystem between different users.
The value of the coins is determined by the demand for them, incentivizing investors to participate early to receive the largest profits. Some coins have seen their value increase by thousands of percentage, with the top 20 ICO performers in 2017 seeing their value raised by 20,000%. This is in contrast to the highest performing stock in the S&P 500 rise just 132% in the same year.
Important Factors of ICOs
The gains are however potentially just as risky with ICO’s as with IPOs, with several factors potential investors must carefully consider before parting with their money. The first thing to consider is the concept of the businesses ICO. The type of business and the issues the ICO are trying to solve are extremely important to its future success. If there is a strong concept, this indicates a better potential of the project in terms of market size and worth. Through researching the concept this provides a better understanding of potential competition, indicating whether the ICO being considered has strong enough standing beside its competitors to steal market shares. Choosing to invest in a product that is extremely niche will be unlikely to yield a good return on investment as well, however.
The second factor to be considered is the team behind the ICO. The obvious, but crucial first step here is to verify the existence of the team. Many investors are misled by the false representation of a star team that does not exist. This can be avoided by checking the ICO website for links to LinkedIn profiles where there promoted achievements can be substantiated.
Thirdly, the Whitepaper is a standard of every ICO that should provide investors a detailed document outlining their project. The Whitepaper should provide details on the structure of token offering, a business overview and executive summary, market research and analysis, product details, and a roadmap alongside the financial forecast. The Whitepaper should be carefully read, with any further questions should be posed to the management team.
Lastly, the capital raised by the ICO company needs to be appraised. Some projects inherently cost more than others to be developed. Whether the amount set to be raised correlates with the project itself is crucial. Having no hard cap raises serious questions as to the motive of the project, while private funding illustrates investment appetite from the private funding sector. Limiting the funding to the private sectors raises confidence in the project.
The immVRse ICO
ImmVRse is a hybrid decentralized platform for VR content. As immVRse prepare to release details of their private ICO launch, this can be considered a project meeting the criteria necessary to invest confidently in an ICO.
Already huge sums are being invested into VR hardware, with market research showing that the industry will grow to between $80b to $110b. The ImmVRse platform showcases skilled producers who are financially rewarded for participating, a necessary product as the industry continues to grow. The team behind ImmVRse also offer all of the experience, skills, and knowledge necessary for a successful start-up. The founders have a career history in the IT, finance and marketing sectors, providing the solid core of skills required for stable business success. They work alongside well known legal, blockchain and VR specialists as advisors to the company.
The whitepaper is detailed and on-point, providing the reader with an informative view on what the project is, why it is required and how it plans to succeed. The token structure follows industry standards with a carefully thought out allocation of funds, whilst the roadmap ensures alignment with.
It is important to always research ICO’s before investing, and only invest what can afford to be lost. To learn more about immVRse visit the website, read the whitepaper and chat with immVRse on the official telegram group.