ICO Analysis

Anyone looking to create an ICO has a long, hard slog. No doubt, the heyday of throwing something against the wall and collecting a huge mountain of ETH or BTC are over. But successes still happen. Investors are still very interested in this sphere. As a professional ICO analyst for a major blockchain company, I’ve seen a fair share of interesting projects as well as a lot of okay ones and a few that, well…
We’re pretty tough in our internal reviews, but we try to be fair. The point is, in order to help out a token offering, a number of points need to be covered. Many ICO’s, considering the total investment, are more than happy to pay 50 ETH or so and get a detailed 25-30 page analysis covering every aspect of an ICO.
Obviously, this article can only touch on something of that depth. The key analytical aspects are:
Business model and explanation
Team
Token Ecosystem
Token Sale structure
Competitive Arena
Online presence
Whitepaper

Let’s break it out a bit. My client analyses are far more in depth, but this will give aspiring ICO’s a good starting point.
Business Model
What is the USP? This is a critical question, if not THE critical question. What does the business do different, better, cheaper, more interestingly, better targeted, more integrated, or any of a number of creative ideas. What is the edge of the business?
What is the revenue model? Most projects either miss this key issue or present a hand-wavy explanation that doesn’t properly clarify details. Investors want solid explanatory details that show a probable increase in token value and/or a reasonable dividend payout. How long until the business could be profitable? What is the timeline for rollout of the product, at least in MVP level? Is there a prototype for investors to look at?
Though there are many other aspects covered in a deep analysis, one stands out in crypto-markets - investor protections. While this has multiple pieces, the primary approach is to establish project legitimacy against fraud (by the team), team competence, protection of some funds in the event of a negative outcome (can investors get half of their money back, for example?) Well-developed methods exist now to ensure investors in this and other regards, so any ICO wanting success will implement necessary precautions (which will depend on the particular project) to entice investors.

Team
This is a fundamental driver of ICO success. (ICO success means the sale made the soft-cap and strong success means it sold out to the hard cap.) A team needs to be of the right size and with the right skills and experience. Sounds simple, but it’s amazing how often these details are missed.
First off, presentation. All team members need to be on LinkedIn, listed in the whitepaper and on the website section. They’ll need a meaningful title and a solid bio. Don’t forget to keep these synchronized. Investors don’t like to see someone called CTO in the whitepaper and social media advisor on LinkedIn. It makes a project appear very poorly organized. And that, of course, leads to fewer investment dollars.
Make sure team members have filled out their bios with good credentials rather than the usual description of the company they worked for. This makes it look like they didn’t achieve anything. Not an ideal perception, obviously. It’s also important to show that the team have sufficient time to commit to the project. I’ve seen numerous projects with leaders that are ‘CEO’ of 2 or 3 other projects. Not only does this appear questionable, but it also makes an investor rightly wonder about how much time this person will spend on the project.
Also, make sure that all critical positions are filled, but without stressing out the budget. Creative companies can engage a number of strategies for accomplishing this.
A deep analysis will reveal more, especially along a line of 9 or 10 more metrics. These are specific to industry and project, so any discussion won’t make sense here.

In part 2, we’ll look at the all-important Tokenomics, competition, whitepaper, and online presence.