ICO, also referred to as an initial coin offering, is a crowdfunding model that is based upon the cryptocurrencies to help the startups and entrepreneurs in raising capital funds for their business and its growth. The entire process of raising funds through the investors, gets done by implementing smart contracts, tokens, along with the proper white paper launch. In ICO startups, there is a great role of investors as they are the ones who invest their funds in the projects and help the businesses to lead towards growth. Similarly, the ICO is also beneficial for the investor. Yes, it is a vice versa process. Considering the same and in order to help you in understanding the benefits of ICO for an investor, we have started the details here. Let’s get started.
Benefits of issuing an ICO to an investor
Offering a new product to the customers and raising funds for it through an ICO proves to be an easy and faster source for investors. There are some major advantages and benefits of an ICO for an investor. These advantages encourage the investors to invest their money in the initial coin offering. To know about such benefits, just have a look at below given points:
Usually, when people look for new investment options, then they usually feel the liquidity factor missing. In several opportunities, the capital gets inaccessible for several years. However, initial coin offering, the investors will have high liquidity, and also the real-time pricing will be based on the current value of the project.
It will be available for everyone. The major factor is that the money is decentralized and is not controlled by a single body rather it can be accessed by everyone and anyone can see the changes done in the project.
Along with the investors, the contributors can also invest in ICO anytime. As compared to the traditional models of funding startups; the whole process is quite different. In traditional startups, it becomes quite difficult to become an early investor if you are not having any close contacts with the founders. But I see the situation is quite different. In order to become an early investor, the contributors just need to pay attention to the upcoming ICO and purchase the tokens soon after it gets launched.
Variation in cost
tokens of a project can vary from project to project and vale to value. This increases the chances of earning profits and reduces great risks and liability. Also, the ability of the investors to invest makes many new startups successful and thus benefits the investors to use the ICO funds any time.
There exist many new startups or projects which struggle a lifetime to attract funds and investment through traditional methods. This occurs more in case they do not have a strong reason to appeal to the customers. This can be the lack of proper location such as projects based on any center out of the city, type of offering, especially in non-profit organizations and many more. More the procedure is simple to invest; more is the funds available for the project. This only requires having complete knowledge about the competitors and their way of funding in the tokens. This gives a clear picture of the competition already prevailing in the market for the ICO project you are focusing upon.
Most of the time, people do not make much use of the wealth invested in cryptocurrency. This results in the accumulation of their funds in it, and thus ICO can be a perfect outlet for it. If you think that making the use of cryptocurrency cannot enable you to make the right use of your wealth, then you are wrong. Also, it reduces the chances of your money being stolen, theft, or lost as cryptocurrency does not transfer any money. It only transfers the value of the money in the form of transactions.
All these benefits show how we can invest in an ICO prove to be a good decision of your life. Although there are some risks which can make you not to invest in an ICO but having good knowledge and safety measures can help you to eliminate those risks successfully.
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There is no guarantee that an investor won’t be on the losing end of a scam when investing in ICOs. To help avoid ICO scams, investors should:
- It is necessary to ensure that the project developers have clearly defined what their goals are.
- Most of the successful ICOs typically have straightforward, understandable whitepapers with clear, concise goals.
- There should be 100% transparency with the company. You should know about the developers.
- Look for legal terms and conditions set for the ICO. Because outside regulators generally do not oversee this space, it is up to an investor to ensure any ICO is legitimate.
Investing in an ICO requires a step to step knowledge for which you can take the help of ICO consulting services. You must know about the team behind the ICO including team stakeholders and founding members, the role of the token in the project, the terms of the ICO itself, the roadmap, funded money and its uses, the list of advisors of the startup, the community surrounding the project, reputation, and of course legal aspects. Knowing these things in detail can help you minimize almost all risks and secure your money in an ICO.
You can also take the help of ICO development services for these things. But apart from these things, there is a great attraction among people to raise funds from an ICO. Unsurprisingly investing in an ICO requires the steps to be followed for fundraising being planned by the company and posted on its website. Thus it also makes the credibility of the roadmap to get the profits comes to you quickly. This shows that ICO is a better modern source to invest money and raise funds as compared to other traditional sources.