ICO review guide

Hi guys, in this article I will try to explain our personal ICO review strategy. We divide the process into several steps to make it easier for us to work, and we track everything in an Excel file, so we can stop the review at any time and be able to resume it in the future.
Let's begin:

Step 1: Choosing an ICO

First of all, you have to choose an ICO. There are many sites that allow you to see the upcoming ICO, we personally prefer to use icodrops. In the Icodrops homepage we see 3 lists:

1. ACTIVE ICO
2. UPCOMING ICO
3. ENDED ICO

If we click on the item UPCOMING ICO we are provided with a list of incoming ICOs and we can also see an evaluation that the site has made. Now we can choose an ICO with High - Medium rating and open the relative card.

Step 2: Evaluation process

That's where the fun begins. First, we divide the evaluation process into different sections. We can identify 7 macro categories, so we can evaluate each category individually, and giving a different weight to each of them. The categories are:

1. Whitepaper
2. Product
3. Use of Blockchain
4. Roadmap
5. Company and team
6. Compliance
7. Token sale

Now that we have identified the categories to be evaluated, we can investigate individually, highlighting the main concepts for each. We will assign a vote from 1 to 5 for each feature that we will evaluate of the 7 categories. Let's see in detail the individual categories:

Whitepaper

Perhaps the most time-consuming research, but reading the whitepaper is essential to understand the key concepts of the project.

We will evaluate the following points concerning the whitepaper:

• Comprehensiveness: Does it cover the full scope of the problem and solution?
• Readability: Is it easy enough to understand?
• Transparency: Does it candidly describe and disclose where the project now stands, how much exists and how much still needs to be done, etc.?
• Business Plan Presentation: Does it contain a viable, comprehensive business plan?
• Technology Presentation: Does it present a well thought out technological architecture? Does it address implementational challenges?

for every single point listed then we will go to give an evaluation from 1 to 5, we can follow the following basic lines:

At this point we have finished the evaluation of the whitepaper, let's see the product.

Product

Knowing how to evaluate the product is very important. Generally, we want to invest in projects that have working prototypes, that are dedicated to a large audience, innovative and interesting.

The key points to evaluate the product are:

• Readiness: Is the product ready for use? Is there a working prototype or MVP? How long until it is operational?
• Appeal: How appealing is the product? How good or necessary is it? Does it have a distinct edge?
• Target User Base: Is it mass market or niche?
• Competition: Are there many other similar solutions or is this one of just a few, or even one of a kind?
• Innovation: How innovative or inventive is the product, either conceptually or technologically?

and as we did for the whitepaper, let's also assign a vote from 1 to 5 for the different points:

Perfect, even the evaluation of the product is complete. Now let's move on to see the use of the blockchain

Use of Blockchain

Now let's see one of the most important aspects in the crypto world: the use of blockchain. Understanding whether the project actually needs to use blockchain technology is essential to understand if we are talking about something valid or not.

The key points to evaluate are:

• Blockchain Development:Is blockchain technology essential? Does it make the solution significantly different and better?
• Disruptive Blockchain Advantage: How disruptive is the introduction of blockchain technology into the product's market space?
• Need for a Custom Token (vs. BTC or ETH) Is the token essential or could it be done just as well or better with fiat or Bitcoin?
• System Decentralization (besides token): How decentralized is the system architecture other than the token (e.g., data collection, storage, access, and use, or decision-making processes, etc.)?
• Contribution to Blockchain Ecosystem: How compelling is the solution's contribution to the evolution of blockchain infrastructure and economy?

Roadmap

It may not be useful to read the project roadmap, but if we want to have a vision at 365 degrees we have to understand which direction the team is moving, what they want to achieve, if the objectives are available and if they have a broad vision or not, but above all at what point we are now.

• Concreteness: Is there a concrete and practical development plan (vs. just a conceptual vision)?
• Feasibility: Is the development plan realistic? Is it based on reasonable goals and timelines?
• Vision Is there a larger, long-term vision?
• Dependencies (other services or capabilities required): How available, operational, or trusted are the other systems or capabilities on which the project relies?
• Current Position: Where is the project now, relative to its vision and plans?

Company and Team

We arrived at the heart of the project: the team. Well, this is the key to success: we can also have in our hands the best idea in the world, but if we do not have a team of capable people in realizing the idea we are not going anywhere!

• Company Stage and Foundation: Is the company already established? Has it raised funds before? Is it mature?
• Background of Lead Team Members: Do we know who they are? Do they have LinkedIn profiles? Do they have solid, relevant backgrounds?
• Team Assembly and Commitment: Is a solid, fully committed core team in place? Do they have online (e.g. LinkedIn) profiles showing sufficient relevant experience? Is their participation transparent?
• Team Skill Set Relevance: Does the amount of talent and skill in each area seem to fit the project requirements?
• Team Skill Set Balance (biz / tech / blockchain): Is the team well-rounded? Is there sufficient talent and skill in all areas of required development?

Compliance

Many times we underestimate certain aspects such as any legal compliance or the attention that the team gives to the legal aspect. Let's see in detail what to evaluate:

• Token Utility (intrinsic value through usage): How much use is there for the token itself (regardless of its value as an investment vehicle)?
• Token as Security (tradable financial instrument): How valuable is the token as an investment vehicle or financial instrument?
• Token / Smart-Contract Infrastructure Readiness: Is the blockchain infrastructure of the project ready for use? Is there a working prototype or MVP? How long until it is operational?
• Attention to Compliance Issues: How much attention is given to compliance (via token and ecosystem design, token sale participation, etc.)? Is this issue addressed directly and coherently?
• Legal Review / Agreement or Risk Assessment: What kind of legal documentation (reviews or agreements) and risk assessment are provided?

Here is an overview of how to give the relevant evaluations:

Token sale

Here we are at the end point but not for this less important: token econometrics. Evaluating the economy is essential to see the final success of the project; How much money do they want? how are they going to allocate the money? Let's see in detail:

• Raise Amount Max:Is there a clear cap? Is the maximum raise amount modestly sufficient (as opposed to either greedy or insufficient)?
• Raise Amount Min: Is the minimum raise reasonable considering the development plan? Are there raise-amount dependent milestones?
• Fund Allocation: Is fund distribution and allocation reasonable and justified?
• Token Allocation: Is the ratio of tokens sold to those kept reasonable? Does it prevent the company from having too much control?
• Media Presence and Following: Is the sale being talked about in Reddit, Bitcointalk, Social Media, Medium, etc.? Is information available and accessible? Is there interest?

Here is the last overview:

Final notes

This is a general overview of what to evaluate when we go to study a project. Obviously, with this guide we do not cover 100% of the aspects to be considered, but we only want to create a starting point for those approaching the ICO world for the first time.

There are many other aspects to be evaluated but we will not see them in this guide. Always do your research with your head! Experience counts a lot and only by sweating will you acquire it. On the other hand, have you ever seen someone become a millionaire without spitting blood?

Greetings,
Cr1pt0-Cr€w