Crowdfunding – the procedure for collecting a certain sum for the implementation of a specific project. Sponsors in return for the invested funds get promises or financial obligations. Most often, money is collected merely as a donation for the development of a project, assistance to a promising start-up. Sometimes an investor does this only for his pleasure, without getting any specific obligations regarding the timing of the implementation of the plan. Also, the sponsor presents special gifts – a souvenir, a mention in the list of investors, the first copy of the goods.
Tokens and shares – what is the difference?
Investors are working with securities, well-known abbreviation IPO. It is translated as an initial public offering of shares on trading floors in major financial markets. By acquiring them, investors automatically become business partners of the companies and receive a specific part of the profit from the annual sales volume.
ICO is a term similar in meaning, literally meaning the initial placement of coins (tokens). On traditional stock exchanges, there is a clear distinction between money and stocks, and in the market, it is stylishly blurred. Companies place tokens, which are launched into circulation as a cryptocurrency, tied to a specific project. An essential difference between tokens is that they do not give the investor the right to claim for the acquisition of their stake in the company.
What is safer and more profitable?
IPO – time-tested and has become a traditional form of crowdfunding with an explicitly outlined prospect for the sponsor. He does not pay for empty promises and souvenirs, but for the opportunity to get a specific profit. But, the entrance to the stock market is not open to everyone. An investor for access to the exchange is required to hire a broker, and the authors of the start-up must undergo a long and complicated listing procedure.
ICO is a more open procedure in which there are practically no significant players. In general, the primary placement of coins is carried out by high-tech companies that have promising ideas, but do not have the financial resources to implement them. Any investor who believes in the project’s prospects can act as an investor. By exposing the increased tokens for sale, the sponsor pays off its investments and can make a significant profit.
Available exchanges for account opening:
- CME – Chicago Mercantile Exchange;
- EUREX – European stock exchange of derivatives;
- ICE – Intercontinental Exchange;
- NYMEX – New York Mercantile Exchange;
- LIFFE – London Stock Exchange of financial futures;
- RTS – Russian trading systems;
- COMEX – New York Metal Exchange;
- MICEX and MICEX – Moscow Interbank Currency Exchange;
- NYSE – New York Stock Exchange;
- EURONEXT – Consortium of European exchanges;
- NASDAQ – Electronic stock trading system;
- TGE – Tokyo Grain Exchange;
- FWR – Frankfurt Stock Exchange;
- AMEX – American Stock Exchange;
- LSE – London Stock Exchange;
- MIB – the Milan Stock Exchange;
- TSE – Tokyo Stock Exchange;
- MSE – Madrid Stock Exchange;
- HKSE – Hong Kong Stock Exchange;
- SWX – Swiss Stock Exchange.
How to make money on ICO?
To recoup investments and decently make money on tokens, you need to select a project for financing carefully. This will allow access to the most significant exchanges and participate in the bidding.
Usually, authors of prospective startups offer to familiarize themselves with the developed business plan. It allows the sponsor to understand what he can expect and in what time the invested money will pay off.
The analyst represented on Icostats will help to avoid fraud. You need to choose companies that show a stable financial success, and carefully study the history of their development. It is essential to pay attention to how the project started, its progress, whether it had a period of decline and, most importantly, how the company came out of the crisis.
Most projects undergo the following phases of the ICO:
- pre-ico (presale) – profitable offers for large sponsors, involving significant discounts;
- ico (crowdsale) – the stage of attracting the majority of investors, rebates are gradually decreasing;
- post-ico – the sale of balances without discounts, but at a significantly lower cost.
Evaluating the reliability of the ICO and having made a final decision, it is necessary to pay for participation in the development of the start-up. To do this, you must send the appropriate amount in the cryptocurrency to the company’s electronic wallet. If payment takes place in bitcoins or aether, the investor’s e-mail and wallet will be additionally indicated, where tokens will be sent.
What will help to succeed in the stock market?
As practice shows, successes on stock exchanges of securities, regardless of whether they buy shares or tokens, are achieved by confident people. Those who can soberly analyze the risks, the marketing strategy of the project and many other factors. Fortunately, most startups entering the exchange are successful. By intelligently distributing investment in ICO and IPO at once several promising projects, you can minimize risks and earn good money to a minimum.