What Are ICO Pre-Sales and How Can You Get In on Them?
Today, there are many initial coin offerings launched on a weekly basis. Most of these launches are now preceded by pre-sales. Before you invest in one, it's important to understand how these pre-sales work and how to invest wisely.
What is an ICO Pre-sale?
An ICO pre-sale happens when a new token is available to buy before its official launch. Tokens are available at a reduced cost to attract large and recognized investors.
Pre-sales build momentum ahead of launches by showing early interest in a project. A successful pre-sale can also raise confidence and hype in a new token performing well.
Before You Invest
With so many startups now launching initial coin offerings, it's important to follow the best practices for ICO pre-sales. Here are some key things to look for:
- A completed product that investors can test
- A team who can deliver on its proposal
- A whitepaper highlighting project features and its technology
- An effective corporate governance and cybersecurity
- A professional marketing and public relations campaign
It's also important that startups communicate with digital currency investors. Working with well-known blockchain investors can help attract investment during a pre-sale.
It is equally important that a startup puts a hard cap on its pre-sale, as that allows you to measure its success. If a project quickly reaches its funding target, it can lead to a successful initial coin offering launch.
An attractive discount structure is also needed to woo accredited investors. It's important for startups to not be too aggressive here, as it may be a warning sign to investors. A project with a pre-sale discount over 30 percent should be approached with caution.
Why You Should Analyze ICO Pre-Sales
A major benefit of ICO pre-sales is that they provide an indication of how a token may perform and whether it is likely that there will be demand for it. If a pre-sale gets a lot of investment and attention, it may lead to a successful long-term project.
You can use the BitcoinTalk forum pre-sale thread to keep up to date with ICO pre-sales. Those conducting ICO pre-sales should also post information on their project's Telegram group and website, which you can monitor for updates.
It is considered a good sign if a project has the backing of an accredited blockchain investor. This shows confidence in the team and helps attract interest for an official launch of a token.
The Importance of Transparency
It's highly important that a project's team is transparent on the performance of its pre-sale. When a team does not provide information on token prices and raised funds, that should be a red flag for investors to proceed with utmost caution.
If you plan on investing in an initial coin offering, it's a smart move to track its pre-sale before you invest. This can help you find a potentially successful project. As the number of ICOs continues to grow, the number of both successful and failed ICOs will also increase. For this reason, it is wise to carefully vet any ICO investment before proceeding.
Want more information regarding ICO investment best practices? Read Bitcoin Market Journal and learn to invest like a pro!