Hard Investor questions
Note: This workbook is not meant to be a investors guide and I specifically don't encourage you to invest in crypto-currencies without fully understanding the local legal and regulatory implications.
As an investor in crypto-currencies or ICOs you need to be objective about your investment decision and should demand answers to critical questions about how your contribution.
- Rights: Buying shares of a company gives you the residual claim on company's assets and usually gives you a voting right. Demand what rights and privileges come with your investment on a company's ICO?
- Due Diligence: Enquire about the product or services that the company is promising to deliver. Does the company have the correct competency? Is the company legally allowed to deliver what it promises to deliver? Is there a market for their product or service? What recourse are you entitled to in-case of a downturn in business prospects? Can you resell your tokens (coins)?
- Audit: Who checks/ audits the operations of the company? How do you know that the managers are working in the best interest of the investors? Demand a financial statement.
- Technical: Can you protect your investment in case you loose your wallet (private key) or of it gets stolen? Has the code been published (if the company claims to be open and public) and are there security vulnerabilities (revealed through security audits)?