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Documents for ICO projects

18/08/2018 00:00
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Specific traits of data collection for investments

Any professional crypto projects investor is sure to pass the data collection stage about future investment.

The set of documentation the investor can download from startup page should always contain detailed information about startup concept (white paper) and its brief (‘one pager”).

The same concerns presentation, which acts as the support of investment “pitch” of the project. This presentation acts as intermediary element between one pager and white paper from volume and information point of view.

“Landing page” should have legal resolution on the correspondence of issued token to the legislation and standards of the country, where the startup is located and the country where it will be traded if it is not solely utility token. If the token positions itself as security the legal resolution should clearly define legal condition of business itself and future ICO process.

What to pay attention to

Investor needs to pay attention to the location of token registration and option of access to documents related to eminent registration. “In case if token is registered at some external jurisdiction in Singapore for example the investor should get its registration number and make sure the project founder is present in this registration” says Nikolay Yevdokimov, the co-founder of several successful startups, block chain projects expert and various ICO consultants. As Nick mentions “It is necessary to request startup incorporation documents, get and thoroughly access them. If everything is open and transparent it is a good sign that it is not a scam or other fake projects”.

The basic set of documents should contain the information about token supposed listing at cryptocurrency stock exchanges and future startups partners. Such partners especially it goes about experienced institutional investors and funds working with cryptocurrencies might become good backup for project development as they buy significant amount of tokens and help startup to sell tokens and enlarge users’ base. If startup documentation has information about frame agreements with funds or tokens sales-purchase agreements it might be considered as positive sign for investing in it.

The project technical part is important for investors who know block chain technology. In most cases the smart contract code is placed at “GitHub» together with description and other accompanying documents. If the document contains links to technical documentation in white paper, the investor should get access to it and study in a thorough way. Such access is another sign of such project transparency and decrease risk for investor.

Currently the most important factor of security for startup investors and its products users is the insertion of escrow accounts in ICO structure.  Each startup should have agreement with escrow service together with the option to use its services. The legal agency providing the following legal services like accounts insurance and deposit account provision, might act as such service in case of fiat money usage.

If startup uses cryptocurrency as payment mode the investor should see the agreements concluded with cryptocurrency escrow. It can be market-verified independent professionals or professional agencies providing escrow services for cryptocurrency industry.

Of course the fuller the information is the more founded the investment decision will be. In case if investor does not find some information he can easily request it from startup even if it goes about some parameters non-usually published: business-model or startup P&L.

The thorough assessment of detailed documentation requires the knowledge of professional consultants or assessment agencies working as a part of investment funds.  Such expenses for the attraction of third parties specialists are quite justified for investor paying more than one hundred thousand dollars in one project.

The investments without thorough assessment might not justify the investor expectations and cause serious problems says ICO expert Yevdokimov.

Check Nick Yevdokomov YouTube channel here.

   

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