How to do Due Diligence for ICOs

Private companies that are looking to raise capital for expansion or project development may decide to make an IPO or an Initial Public Offering. This is when companies offer stocks for sale in which investors in the free market will have a chance to own a portion of the company unlike before when its shares were only exclusive to private investors.
In recent years, countless innovations and mediums have been introduced in the market like the concept of financial technology or Fintech, which includes projects powered by blockchain technology in the form of cryptocurrency. Another notable improvement in the industry is what is known as an ICO or Initial Coin Offering. Similar to IPOs, ICOs are offered to public investors for the first time so companies will be able to raise capital to fund their own project. Oftentimes, if you’re interested in taking part, it’s wise to consult a reliable list of ICOs.
Practice due diligence by checking the ratings on an upcoming ICO list
Like most investments, dealing with crypto coins has its fair share of risks and benefits. To help investors make good investment decisions, many sites have created an upcoming ICO list which includes the company’s name, crypto coin, and its specifications. To prevent falling for a scam, many investors are advised to practice due diligence which involves careful research before making an informed decision. If you are currently on the fence on whether or not a project is worth investing in, here are some tips on how you can practice due diligence:
-Visit the company’s website. Most legitimate companies invest a lot of time and effort in making their website unique, professional, and easily accessible. If the site you’re currently visiting is using ready-made templates, chances are the people behind the project aren’t serious about their project and could potentially be scam artists.
-Check relevant sites. To help regulate the number of legitimate ICOs, several sites have generated their own upcoming ICO list and review pages which provide up-to-date information on crypto coins, their uses, and whether or not they are worth investing in.
-Check the whitepaper. A white paper contains important information on the project details. It also contains technical information like encryption formulas, project specifications, and where to find the code used to create their coin or token. If the content is too vague, has inconsistent grammar, or has several typographical errors, it could be a sign that it was written by a scam artist.
-Perform a background check on project members. Check the company’s website to see the members behind the project and run a quick check. This includes visiting social media websites like LinkedIn, using reverse image search, and finding out whether they have the professional background experience necessary in running a project. Most scam sites tend to use stock photos or create false profiles in the hope of attracting investors.
While research is certainly a time-consuming act, there is no doubt that when it comes to finding a list of ICOs to invest in, due diligence is simply a task we cannot ignore. While there are numerous benefits of dealing with cryptocurrency there are also some risks involved such as its decentralized nature and the fact that it isn’t governed by a sole authority which can lead to investors being potentially scammed.