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How to Invest in an ICO

Initial Coin Offerings (ICOs) continue to attract large sums of investment dollars. With investor interest comes a volume of deals to sort through.

My four rules for investing in an ICO are:

The team is always the first criteria. The project needs a capable team, preferably one that has already built something successful.  Just about every startup failure I’ve invested in goes back to the team not being up to the task.

There needs to be a real product where I can clearly see why a crypto token is necessary and the product fits a real need. The days of raising funding on a whitepaper only are over. The minimum requirement today is a Minimum Viable Product.

There needs to be a clear strategy around how the token fits with regulatory issues as one cannot afford having it shut down because the SEC declared it a security offering and now demands all the related documentation.

In addition to checking the basics of the business behind the ICO, I also look for quality providers such as a legal firm who has handled ICOs before and other investors who know something about the space. 

HallHall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more Connect with him about fundraising, business growth, and emerging technologies.

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