When it comes to investment, one thing is certain: you can never be sure. This is because there is no indication to the investor that he is investing in the correct asset. Or if everyone is on the same spot as him, then he probably missed the mark. Nevertheless, by following a particular course of action, one can maximize his chances of a successful investment. The following are the tips that financial practitioners urge you to consider when investing on your next successful venture.
Only invest in what you understand
Put your money only into what you actually understand. Whilst the words of financial guru Warren Buffett, among others, may seem trivial. Nonetheless, his respect is no less necessary. Particularly in an environment as technologically advanced as that of the blockchain.
Ensure that there is a realistic use case for the blockchain driving the project.
You must beware of fade-out: the mere fact that a company is claiming the block does not mean that it is worthy of your funding. So before you get your fingers in the portfolio, you should make sure that the project it will be developing represents a “viable” use case for the new technology. “We’ve seen a lot of companies that talk about ICO or blockchain in their slogans without considering real applications for the technology,” regrets George Damouny, partner of the Plug and Play Tech Center gas pedal. Despite the fact that the blockchain is a cutting-edge technology, there is usually a big gap between successful and unsuccessful companies when you invest in this type of technology.
Learn more about the project team
Need I mention, shortly after France’s footballing jubilation, that team composition is crucial to a company’s success? Getting to know the men and women who are behind a project you are contemplating is of crucial importance, all the more so when the project is only just beginning to get off the ground. “Do they have the experience, the skills and the personality to transform the venture?” asks George Damouny. Breakthroughs are difficult for start-ups. Especially when they bring new technologies to market.
Focus on markets where there are traditionally a lot of players
Making transactions secure is the raison d’être of the smart-contracts that operate on the blockchain. These smart contracts run automatically from a predefined threshold (a date, an amount or any other authenticated event) and with no intervention from a third party. The transactions are recorded, in blocks, in a register that is essentially public. Thus, they are transparent and traceable within the limits of the identity of the parties concerned, and are never revealed. “One can quite imagine a blockchain application for the medical record, to which the patient would grant permanent access to his or her treating physician and then, on a case-by-case basis, to the specialists that he or she would be led to consult in the event of problems,” says Didier Le Menestrel, CEO of La Financière de l’Echiquier. Moreover, a plethora of game fields are available for those who appreciate the need to satisfy the new needs of both the professionals and the end-users. “We’re very much focused on technology that can help the insurance and banking sectors through the use of immutable records and smart-contracts, as well as consumer applications,” says George Damouny.
Allying the beneficial with the enjoyable
Without having the guarantee to make his assets grow, an investor can always feel the satisfaction of having supported a project that was close to his heart. “This type of decentralized organization is the ideal place to deal with real issues of society, the transition of the world, rather than microeconomic, niche issues,” says Philippe Rodriguez of Avolta Partners. This year, the French investment bank specializing in technology companies launched an investment club, Volta ICO Syndicate, allowing professionals to acquire tokens during the pre-ICO phases. “We can now allow ourselves to be ambitious, to want to fight against poverty in different parts of the world. The technological infrastructure now makes it possible to respond to problems that, until now, technology has not been able to solve”. A good Samaritan.