So you want to get in on the next big thing in crypto, but you're not sure where to start? Participating in presales can be the way to go, and these early bird opportunities can offer great returns on investment. In this article, I'll go over how it works, how to get in on it, and what to consider before investing.
First, what are crypto presales?
Crypto presales are events where participants can buy tokens or coins before they are released to the general public. These presales give early investors access to the new tokens at a discounted price and allow companies to raise money for their projects while developing. You can look at it like the Web3 way of investing in an early-stage company before it's listed on a stock exchange.
Crypto presales have become increasingly popular over the past few years as more and more people have become interested in investing in cryptocurrencies and blockchain-based startups. The massive success of the famous "ICO boom" in 2017 has also helped fuel this trend by demonstrating just how profitable these types of investments can be. Let's take a deeper look.
The ICO boom
The ICO (Initial Coin Offering) boom of 2017 was a major turning point for the cryptocurrency market. During this time, hundreds of new blockchain projects raised huge amounts of funding in just hours or days, and many investors saw incredible returns on their investments. This period also helped to drive increased adoption of Ethereum and other cryptocurrencies as more people became aware of the potential benefits of blockchain technology, leading many to speculate that this could be the start of a new economic era.
However, not long after the ICO mania took hold, several high-profile projects were exposed as scams causing the market to realize that investing in projects with little to no value won't be sustainable. One example is the famous BitConnect, which raised over $2 billion before shutting down its platform and later being labeled by the US Securities and Exchange Commission (SEC) as an unregistered security offering. Despite the success many investors experienced during this time, the ICO boom eventually ended as regulatory scrutiny increased and market conditions shifted. Nevertheless, it remains an integral part of crypto history, and those who participated in it still look back on those heady times when anything seemed possible in the blockchain world.
Ways to get in on crypto presales
Participating in crypto presales has been somewhat complex for anyone new to the space. There hasn't been any simplified go-to guide, and navigating the space without a network to point you in the right direction can be challenging. Hopefully, this article can help with changing that.
Whether through a community or a launchpad, there are a lot of possibilities for the average Joe to participate in crypto presales. In this article, I'll keep most of the focus on investment communities - which I think is the way that will give you the most benefits in the long run.
Joining an investment community
Investment communities, also known as community VCs or syndicates, are essentially groups of people who share a common interest in investing and trading crypto. In addition to being an excellent platform for networking and shared knowledge, you'll get access to a deal flow of presales for early-stage crypto projects. The way it works is that the community members pool their resources to handle a transaction that would be impossible to execute individually. This tactic allows anyone to get in on the next big thing together with the prominent, wealthy, traditional VCs usually running this business. Investment communities rocks.
The communities usually operate with a private channel or server on Discord or Telegram, creating their personal ecosystem of private investors doing due diligence together. It's a great way to be a part of something bigger in this space, learn new things, and even make new friends. This is also where the deal flow is being shared.
So, where do you find these communities?
We know most communities bring in new members through "word of mouth" and members inviting friends. While there's not any platform to pick and choose from, there are a lot of them out there. Most of the communities are on Twitter, so searching for relevant keywords like "crypto community" can give you a head start. With that said, I'm going to highlight some of the most known communities for you in this article.
While there are a lot of communities out there, there are several factors you should take into consideration before applying to join.
- What's the entry fee?
- What's the commission you will pay per investment?
- What's the minimum and maximum contribution amount per investment?
- Have the community invested in many successful deals in the past?
For some communities, you'll have to hold a specific token or NFT to get access, while some take a fixed fee or are entirely free to join. However, free access isn't necessarily the best thing to aim for. Most communities have websites where they front their portfolio and track record of deals they've raised funds for. Doing your due diligence and learning about the community's previous investment should be on your to-do list, as this can be a good indicator of what to expect from the group.
I'll highlight some communities worth taking a look at. Note that not all communities are open to the public at all times.
Crypto launchpads are platforms that enable crowdfunding for early-stage projects. This allows the projects to raise their funds from heaps of private investors, while the investors benefit from the low token price before its launch on the market. The launchpads also safeguard investors by screening out potential scams or rug-pulls, making sure the projects have reached a level of maturity and that it offers a scalable infrastructure. They're actually doing a lot of the due diligence for you.
Here is a list of some of the most known launchpads out there.
Crypto presales have come to stay. We're still early in the cryptocurrency space, and the increase of projects being developed and investment communities making their mark as big players will streamline the process of onboarding new private investors to the market. The presales are no longer a game just played by the wealthy, traditional VCs, giving everyone the possibility to hit the next unicorn before it launches.
By the way, one final tip. Joining a community that uses Presail to automate its presale workflow will give you access to an investor portal to track your investments. With all the complicated vesting schedules and different distribution dates, you're about to experience, that's worth considering.