Targets for tokens with Pre-ICO are usually set lower than in the main ICO.
Why carry out Pre-ICO
Pre-ICO is necessary for start-ups that have no anchor investor or funding to launch ICO (paid advertisement, meetings organization, technical support etc.). In addition, Pre-ICO allows working with all the mechanisms of ICO with fewer risks and predicting a potential interest in the start-up already after the beginning of the full-scale crowd-funding campaign.
Why buy Pre-ICO tokens
During the Pre-ICO tokens are sold much cheaper than after the start of a full ICO. At this stage, you can invest less money to get a much higher income. Of course, this imposes certain risks as well.
Pre-ICO risks for start-ups and investors
When a start-up offers to buy its tokens at a discounted price during the Pre-ICO, it has a risk that all those who invested in the project at this stage would immediately “dump” their tokens when their price goes up after the start of a full ICO. At that, the investors get a quick profit, but with amass sale, they knock down the tokens’ current price.
Buyers of tokens risk even more. At the Pre-ICO stage there are no guarantees of start-up success except the project’s description and its creators’ reputation. You may face both obvious scammers and honest businessmen who have simply misestimated their strengths.
How to choose Pre-ICO
Unfortunately, there are no guaranteed tools for the start-up evaluation at the Pre-ICO stage. Each investor buys tokens at his own risk. However, there are some constant factors you should pay attention to:
1. Start-up geography. Usually, start-ups with really serious plans choose jurisdictions for the launch that are focused on the regulation of cryptocurrencies, rather than their prohibition as well as have a clear tax law.
2. Team. Despite the growing popularity, there are relatively few really active players on the cryptocurrency market. Each of them has some projects implemented by him in the past and a certain reputation. You shouldn’t invest big funds in a project of people whom you don’t know anything about and cannot find any information.
3. Conditions. You should carefully investigate on which terms the tokens are being sold, how can they be used in prospect aside from reselling, which emission is expected and other details of Pre-ICO.
4. Project’s prospects. The most difficult-to-evaluate factor. About 95% of start-ups on the ICO market lead to nothing. Everything here depends on a conscious estimation of the offered idea’s potential. This estimation may be influenced by the White Paper of the project’s authors with a detailed description as well as their openness and feedback readiness.
Where to find the information about the current Pre-ICO
The information about the Pre-ICOs which are currently running or preparing to run in the nearest future, is published on various thematic resources along with the announcements of the full-fledged ICOs. For example: