Cryptocurrency ICOs have become a global phenomenon throughout 2017. A lot of companies use this new approach to raise money and get their projects off the ground. However, there are clear indications that this method of fundraising isn’t suited for every project either. One should create an ICO for the right reasons and not just because of the money.

To ICO or not to ICO?

When it comes to cryptocurrency ICOs, the sky is pretty much the limit these days. That is what most companies think, anyway. There are a lot of things to consider before creating an ICO in the first place. Several industry experts shared their comments with us in an effort to create a more robust industry. After all, there are a fair few bad players in this industry, and it is becoming difficult to differentiate between legitimate and overhyped projects.

Firstly, Spice VC’s Ami Ben David advises companies to not raise too much money. Any project attracting high amounts of money with an initial coin offering may be labeled a scam, regardless of its actual intentions. At the same time, it is important to retain one’s integrity at all times and not oversell one’s product, especially if it doesn’t exist yet. Rather, building trust between a team and potential investors is paramount. A lot of ICOs forget this point for some reason.

Perhaps one of the more solid pieces of advice comes from CarFix’s Pavel Nazarov. According to him, ICO projects should ensure they don’t fall victim to blockchain hype in order to justify building a database. If the term blockchain is used, the project should involve an actual blockchain and not a mutable ledger. Support from industry leaders will certainly allow more projects to gain legitimate traction over time. A big “do not” is underestimating the US SEC when it comes to securities and tokens that may be regulated as such.

Publiq’s Alexandre Tabbakh feels transparency should be the number one priority for every ICO. Most projects emphasizing transparency along with communication, technology, and legal compliance will not run into trouble. However, if there are very few updates disseminated to the community on a particular project, people will be wary. Sadly, we have seen a lot of ICO projects struggle with communication once money has been raised. There is a lot of room for improvement in this regard; that much is evident.

When it comes to ICO projects, experts cite many of the same pitfalls these days. More specifically, the lack of communication, excessive greed, cutting corners, and overselling are issues which are in need of addressing. Some projects also struggle to protect community members and investors from scammers, which is another big concern. Moreover, it is always in the best interest of any ICO to solicit legal advice in regards to whether or not its tokens classify as securities.

All of the above expert advice is pretty solid, to say the very least. Although opinion may be somewhat divided as to whether or not ICOs should exist in the first place, if people took these simple guidelines into account, most issues would not come up in the first place. There is an interesting future ahead for cryptocurrency ICOs, although no one knows for sure how things will play out.