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In the rapidly developing digital economy, every year there are more and more crypto-currencies and tools associated with them. How to use the opportunities of growing market? How to invest in ICO and how to get to crypto-exchange? Here we present the Complete Guide to ICO. Usually a well-known, stable company with a financial history enters the financial exchange via IPO. ICO is mainly used for crowd-hosting projects, that is, for companies that are just beginning their history. Novice companies can not predict the market's reaction to the fullest. Therefore, the first step for the release of ICO is the pre-announcement of the project.

Stage 1. Pre-announcement

Pre-announcement is the announcement of the future project in communities of crypto-currency investors, such as Bitcoin Talk, Reddit and others. The founders of the project write an executive summary - a small presentation for investors, in which they explain the essence and goals of the ICO project. After executive summary the company receives the first feedback, analyzing which it is possible to understand whether the project was able to interest investors or not. After the release of the pre-announcement, there are often a lot of questions about the business model of the project, about unaccounted risks. Taking into account all the incoming comments, the business model gets the necessary corrections. This process of feedback with subsequent adjustments is repeated several cycles, until agreement is reached between the funders and potential investors. At the end of the first stage, the final business model of the project is adopted and a detailed offer is written.


Stage 2. Offer

An offer is an offer to enter into a transaction in which the essential terms of the contract are addressed to a specific person, to a limited or unrestricted circle of persons. The offer is drawn up on behalf of a registered company that issues an ICO. The offer describes all the nuances of the project, specifies the desired amount of investment, the timing of the project. The offer specifies which financial instrument will be sold on the exchange. As a rule, these tools are tokens.

 Tokens in a blockchain are a crypto currency, which is the equivalent of a unit of a financial instrument that is presented on a crypto-exchange. 1 a token can equal, for example, 1 dollar of debt obligations, one share of the company, 10 shares of the company, the right to vote anywhere and so on. At the moment, the established standards, on account of what the token will be in a certain project is not, therefore, it is indicated in each offer individually. After choosing a financial instrument, the offer describes all the rights that this token possesses. For example, the ETH token issued during the ICO Ethereum was extremely speculative, and the DGD token, in addition to being backed by gold and foreign exchange reserves, also gives the owner the right to propose management of the company to other shareholders.


To date, regulators around the world are only beginning to understand what a blockchain is, so companies that have issued their analogues of traditional shares on blockchain are still single. Typically, tokens provide a certain period after which the company begins to repay its obligations to investors (for example, to harvest dividends). This term is also indicated in the offer.


After the signing of the offer, the deadline for the start of the sale of the tokens is announced, and the issuing company conducts an active PR campaign.


Stage 3. PR campaign

Since ICO is often conducted for young and little-known companies, a very important PR-strategy plays a very important role in the success of the project. For this, specialized agencies are involved, speeches are organized at various conferences and so on.


In the financial market, before the launch of an IPO, a similar campaign is also called, called the Road Show, an element of the practical preparation of the issuing company for the issuance of its securities. If in the financial economy the Road Show is a series of meetings with potential large investors and analysts in the key cities of the world, in the case of the ICO, the PR campaign lasts an average of one month and is not targeted at institutionalized investors (banks, funds, etc.), but on a broader segment of smaller investors.


The target audience in this case are the participants in crowdaming programs, the so-called "business angels". Such investors are more likely to support projects in which they can apply their own experience. Personal involvement and expertise is the fundamental difference between business angels and other private investors. Among active business angels, there are many entrepreneurs attracting external financing to their own projects. Investments received from this group are called "angelic".


At the end of the PR campaign, the very process of selling and buying tokens begins. At the start date of the ICO, the company provides investors with a way to buy the tokens declared by the offer. Such methods, as a rule, are two.

Stage 4. Start of sales within ICO

There are two ways to release tokens on a blockchain:

  • You can first collect the minimum amount of money determined by the offer, and then issue tokens and split them among investors proportionally. To do this, as a rule, a special website is created with the investor's office, for example, chronobank.io;
  • You can also sell a token on crypto-exchanges. To do this, it must be released in advance, which allows you to trade it on one or several exchanges at the same time. In this case, the ICO process becomes identical to the traditional IPO process.

After completion of sales of tokens by any of these methods, the issuing company proceeds to fulfill the stated obligations to investors. Since the crypto-currency market is still young and there is no mechanism for regulating it, as such, it is worth talking about the risks that the investor encounters when investing in the ICO.



Regulation of the crypto-currency market is a technical problem, very few people understand how to regulate the processes occurring inside it. Virtual economy, which carries out all its transactions through Internet payments, without direct contact of the seller with the buyer, always involves risks. No exception is the ICO.


According to our experts, most existing projects by 2017 may be fraudulent. This is because, thanks to the virtual economy, it's easier to invest, and people invest their money almost "without looking" at any company with a more or less decent presentation, without conducting a quality Due Diligence (DueD).


DueD exists in the financial economy and, as a rule, consists in conducting an in-depth analysis of the investment object and providing it in the form of a report. The analysis includes an assessment of investment risks, a comprehensive study of the company's activities, a comprehensive check of its financial condition and market position, competence and previous experience of the involved team. DueD can only afford experienced investors who resort to the services of relevant professionals.


In the case of the critical economy and ICO, Due Diligence is often superficial, which often leads to investing in projects beyond which there is no real business. We can see this by the example of kraudinvesting all kinds of lotteries and casinos. To protect depositors, by analogy with the traditional financial market, new players appear on kriptornke - rating agencies.


Such agencies conduct independent Due Diligence, analyze all information about the company entering the crypto-exchange and publish the results of their research in the form of an independent rating review indicating the strengths and weaknesses of the projects.


To minimize the risks of investors, companies that provide ICO start-up services cooperate with rating agencies. Thus, Ambisafe has entered into a partnership agreement with the rating agency ICORating, which provides additional reliability of joint projects.


ICORating conducts research of all aspects of the project that are behind a specific crypto currency financial instrument. The company analyzes the investment risks of the project, which goes to the ICO, in the following areas:


  • business model (its relevance, strengths and weaknesses);
  • market niche (prospects and dynamics of the selected market niche for building a business);
  • team (business experience in the traditional market segment, in the block industry industry, the experience of block-development);
  • competition (the level of competitive pressure from companies with similar business models from the traditional market segment and block-economy);
  • technical background (availability and quality of the prototype or source code);
  • analysis of feedback from the community;
  • and many other aspects.

Thus, investors in free access see how risky this or that investment is.

 Based on our own experience, we strongly recommend that potential investors study the subject of investing in more detail or apply for analysis to professional rating agencies. For companies entering the ICO, rating agencies will help to systematize all the necessary information, which will increase the reliability factor of their project in the eyes of investors.

 Another way to protect against potential scammers is cryptographic escrow, implemented with the help of Multi-sig wallets and independent escrow agents. This means that the company collects money not directly, but with the involvement of third parties.

 The funds are collected on a Multi-sig wallet, access to which is only available from deposit agents, which in turn provides additional protection. Thus, the company can not independently spend the collected money without the digital signature of the agent.

The duties of a deposit agent include checking the fulfillment of the terms of the offer by the company, meeting the deadlines and obligations to investors. Only if the stated conditions are met, the company gets access to certain amounts from the Multi-sig purse.

 In practice, it looks like this - the company collects $ 1 million. The business model implementation plan is divided into 10 periods. The first $ 100 thousand company receives from the Multi-sig wallet immediately after the end of the collection of money. The longer the deposit agent oversees the fulfillment of the stated conditions, for the honesty of the issuing company, for meeting the deadlines and, in the case of the successful completion of the first phase of the plan, issues the next part of the amount. If the company does not fulfill its obligations, the money remains frozen on the wallet before fulfilling obligations or returned to investors.

 In conclusion, I want to note that the rapidly developing block economy and the growing ICO market are repeating today the history of the formation and development of the traditional stock market, only at much faster rates.

 Part of the projects that the ICO is carrying out today have the potential to grow to huge sizes over time and to repay the investments invested in them many times. Many investors today recall the moment when companies like Apple, Amazon or Google enter the IPO and figure out what kind of conditions they could make. if they had invested in these companies at that moment. The ICO market today gives one more chance to participate in the success story of the new economy projects, both for investors and for companies whose founders want to create really significant projects.


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