Okay so now the basics have been covered we can move to the juicy part. Learning out how to manage your risk while investing in a hot new ICO.

Here we will cover the following:

Finding Upcoming ICOs

Doing your research & Due Diligence

Participating in an ICO

Post ICO

Researching an ICO

There are a number of websites and tools online you can use the keep an eye on the latest ICOs and ICOs that are coming soon. It's important to have a head start as a lot of ICOs now require you join a whitelist to register for the ICO in advance. Due to popular demand some, ICOs can even close this whitelist early if they receive a lot of interest.

Here are the best tools and resources for staying ahead of the game and knowing what interesting ICOs are live or coming soon.

Using the tools above you can keep an eye on specific ICO dates, register for updates, browse ratings. If you are interested in exploring ICOs but not sure of any projects that interest you yet then this is the best place to start.

Due Diligence

If you have found an ICO project that looks interesting and viable and is launching an ICO soon, the next thing you need to do is evaluate the project using various criteria to fully assess if an ICO is a good investment opportunity.

Fundamentals

Looking at the fundamental analysis for an ICO is essential and many of the key factors you need to look at are the same as when researching existing digital assets, so head over to our guide and go through the important criteria that need to be assessed ranging from altcoin economics, marketing and how to evaluate the team and concept.

It is important to have a checklist to help you analyze an ICO against a series of criteria.

Can it be explained in one simple sentence?

This was quite appropriately referred to as the Mark Twain test by Cedric Dahl in a video about his ICO methodology that you can find here. It is important that you understand the concept and that it can be easily explained to others.

Bitcoin is trying to revolutionize banking

Ethereum is trying to revolutionize contract.

Civic is trying to revolutionize identity.

Filecoin & Storj are trying to take over file storage.

Does the Project have first-mover advantage? or are others in the space already attemting to solve the problem?

First-mover advantage is not to be overlooked, being first out the gates with a strong idea eliminates the chance of people interested in the idea investing in an alternative solution.

Bitcoin for example holds the first-mover advantage in the cryptocurrency space which has lead to a powerful network effect keeping Bitcoin as the highest marketcap project still to this day.

How Valuable is the market the project is attempting to disrupt?

is it likely to be in a sea of competition where prices are driven down and the profit is limited or is it a revolutionary idea that stands leaps apart from anything else out there with a chance to really dominate its respective niche?

How large is the immediate market? and is it something that can penetrate a large series of different markets?

Remember all blockchain projects are essentially tech companies/projects, so they are startups, and one thing that is well known about startups is that about 80% fail within the first two years, only a fraction will have long-term success and market penetration.

There are however some considerations that pertain exclusively to ICOs and not existing crypto projects.

How long is the period between the end of the ICO and the token release?

How long until the project will launch an actual product?

What is the ICO fundraising target? Based on the number of coins they are issuing at ICO and the price per token, how much do they plan to raise?

Have the founders/creators had experience with other blockchain projects? Are they well connected to other founders? Dig into their history. Look for red flags! Some ICOs have gone as far as to put fake advisors and team members on their websites.

Where are they based? Do they have real offices?

Do they have a proof-of-concept? While most will only have a whitepaper some may have an alpha product you can try. If they have a GitHub go and check it out to see how regularly they are updating their codebase to get a sense of how active they are working on it.

Does the problem require decentralization and need a token?

If the product can work without the need for a token then it really shouldn't have one. Be weary of companies tacking on a token to their new idea purely to ride the hype train. Many companies are jumping on the bandwagon and benefitting from adding the word "blockchain" to anything they are working on.

Read the Whitepaper

Any serious ICO will at least have a whitepaper, they may not have a proof of concept or alpha product yet but if they don't have a whitepaper click the X and move on.

You want to evaluate the whitepaper to get a better idea of the problem they pose to solve, how they plan to solve it, how thoroughly they have researched the idea and how realistic it is to achieve.

If you need a good benchmark to compare the whitepaper with, use the original cryptocurrency whitepaper by Satoshi Nakamoto. Of course keep in mind Satoshi had no idea of how big an impact his experiment would make and didn't cover things that a modern whitepaper would such as a focus on the team and marketing.

A modern whitepaper will generally contain the following:

The problem

The solution and product/service

Token implementation - How the token works, token economies, and technicals

The team, this may include both founders, dev team, marketing and advisors that are onboard.

Token distribution - how many tokens the founders are retaining and if they are locking them up via escrow.

Planned use of funds - is the money being raised going into development? marketing? or elsewhere?

Roadmap

An ICO should also have a development roadmap to scope out their immediate to long-term focusses and offer a rough timeline of events and launches. It should include clear stages of the project and include between 12-18 months worth of development typically.

Here is an example of a good roadmap.

Sentiment Analysis

Sentiment refers to how positive or negative the attitude of individuals regarding a certain topic. With cryptocurrency, this is especially helpful as you can crowdsource opinions and research from the community to get a sense of whether the public opinion is bullish or bearish on a project.

Most people tend to suffer from a sheep mentality and go with the crowd and since social media is such a popular space for people to loiter online and "have their say", this is a great place to engage in sentiment analysis for cryptocurrencies.

Need a second opinion? Gone are the days where you would have to knock on your neighbors' door, you can tap into the thoughts of thousands of other individuals discussing the topic in a matter of a few clicks.

Search the ICO name or ticker code with a # or $ before it on Twitter and look at the latest and top tweets. Then check the "people" tab and follow the official accounts related to the project. This is a great place to start.

You can also head over to the website and follow their other links to social communities, chances are their website will list links to Slack, Telegram, Discord and maybe a few other community spaces where investors and those interested can discuss the project along with the investors and official representatives for the project.

Engage and ask questions and you will be able to learn a lot about the project and how people feel about it.

Social Media Presence

In addition to gauging public sentiment using social media, you also want to see if the founders or developers are being proactive in answering questions and sharing updates in the public domain. If they are starting with social marketing early on then this is a good sign.

How to Participate

The method of participation will vary from ICO to ICO and based on the funding method being used. Some projects are only funded using ETH while others will allow Bitcoin or other altcoins as a means of investing.

Before you can invest in an ICO you need some cryptocurrency and a wallet.

In the vast majority of cases any ICO you are interested will publish specific instructions and documentation on how to participate in their ICO however there are some areas worth discussing.

Whitelists - Many ICOs will only allow you to participate if you have registered your interest in advance. This isn't always the case but if you are interested make sure you are quick to sign up, this doesn't mean you are committing to anything remember.

Funding Method - Find out which currency or token is being used. If Ethereum, buy some in advance or strategically buy it on a dip so that by the time of the ICO you may actually get some extra tokens for your money.

Wallets - Make sure you are funding the ICO from a wallet where you control the private keys. Don't use exchange wallets where you don't control the private key to fund an ICO. MyEtherWallet.com is a popular and easy to use option if you are investing in an ICO on the Ethereum network.

Post ICO

Once you have invested in an ICO and the crowdfunding has closed you will be kept up to date by the projects team or founders via email and social media. The time between the ICO closing and the token release may vary from a couple of weeks to several months so patience is key and you will want to be sure you know this in advance of investing.

Social Media - Make sure you are following the official accounts of the project on Twitter, Facebook and any other social accounts you use and where possible turn on notifications if you want to be kept up to date.

Communities - If you haven't already, join the communities that the project has set up such as Slack, Discord, and Telegram, then you can engage with other investors and the team during the waiting period and all share ideas and contribute.

Launch - When the project finally launches and you have been issued your tokens to whichever wallet the project is setup to fund you have a couple of options. You can hold for the long term in which case you can usually keep your coins where they are and keep your eye on the news and price movement or if the coin has been listed on any exchanges you can move them over there and either sell them all or a small portion.

Most tokens list on smaller exchanges at first with EtherDelta often being the first.

Other popular exchanges that list coins or tokens early on in their lifecycle include Cryptopia, Kucoin, Binance, Liqui.io, and BitGrail.

A lot of people recommend selling 50% of your tokens once they reach 100% growth, this way you have broken even on your investment but still have half of your coins to hold for the medium to long term, however this would be a bad move on many of the projects that have increased 10 or 20 times since their ICO.

ICO Warnings & Considerations

Beware of Astroturfing - The process of creating fake news to drive the price and create artificial public sentiment on websites like Reddit, Twitter, YouTube, Forums and other popular watercoolers in the cryptosphere. Ask yourself, where did you hear about this ICO? Was it from a friend, coworker or family member? Somebody you trust? or was it brought to your attention by a troll-like Twitter user?

Preferential Treatment - Pre ICO rounds and Pre Pre ICO rounds mean that insiders, those close to the project, influencers and institutional buyers may get an earlier buy-in opportunity at a preferential price or with bonus tokens for signing up early or committing to a large investment. This doesn't always mean it's a scam but it's something you need to be aware of and recognize that you may not actually be getting the best price just because you got in at the ICO stage.

Patience - After an ICO has completed and the funds have been raised there is often a period where the founders and developers actually go to work and use the funds raised to build their project. In some cases, smart developers have begun to get as much ready as possible but in many cases, there is a 2-12 month wait before the project will go live and you will receive your tokens.

Red Flags - If it sounds too good to be true, it probably is! Any ICOs that mention guaranteed gains are scammy and you should step away. When vetting the website of any ICO look for the following potential red flags.

Plagiarized content

Spelling & grammatical errors

Fake team members and advisors - look them up if it looks suspicious

An unprofessional looking website, branding, logo or project name.

This matters because 0.003BTC per token is a big difference when Bitcoin goes on a 4X price increase while you are waiting for the ICO tokens to be allocated to your wallet.

ICO Resources & Tools

Here is a list of the best websites and tools to use in your ICO research. You are going to need several things to keep your ear to the digital ground. A cryptocurrency calendar sites to help you research and review ICO's and learn who to follow.

Some of the below tools have a lot of overlap in what they offer, but one of the key rules of doing your due diligence with any investment is consulting as many sources as possible for further confirmation. Don't believe any one source on the internet, about anything, don't even trust me!

Coinist - One of the best ICO tools to report on historical data, ICO ROI, the Biggest ICOs of all time and the cumulative growth of the ICO space.

ICOStats - Has some similar info to Coinist but the user experience and charts are perhaps more attractive.

ICOAlert - One of the best websites for finding out more information on upcoming and live token sales.

ICODrops - ICO Calendar and updates service.

ICOBench - Another high-quality ICO ratings and news website.

TokenMarket - Similar to ICOAlert and also provide great assessments of various tokens and cryptocurrencies.

Bitcoin Talk - This forum is one of the first places a new whitepaper will be promoted and begin a new discussion thread where users can discuss. Great for judging public sentiment.

Reddit / r/ICOCrypto - A subreddit specifically for discussing and sharing information on the latest ICOs.

ICO Experts

The space is still very new but already people are carving out a reputation by specializing in ICO investing more than Bitcoin or existing cryptocurrencies. You can also follow a list of experts at ICOBench.

Who is Ian Balina?

Ian Balina is a very interesting person in the crypto space who has gained a bit of a reputation for himself recently for being the king of massive gains from ICO investing, reportedly taking a 5 figure investment and turning it into 4 million in a matter of months, with most of his gains coming from ICO investments returning him 10X through to 40X.

Ian is no newcomer to the world of tech and data though with a background working with IBM before deciding he needed to be truly free and become a made man. Ian has developed a fascinating 'Token Metrics' system to help him pick out the hottest new ICOs.

You can check him out at IanBalina.com and follow him on twitter @diaryofamademan to keep up to date with his picks, tips, and updates. He gets my seal of approval and is a likable guy.