<p>It's with the perspective of High Risk - High Reward. The risk is high, it's a startup essentially. Startups often fail and lose all value. But sometimes startups become Google, Apple, Microsoft, etc. Just taking that risk could make you broke, or a billionaire.&nbsp;</p>
<p>In 2014, you could have bought 2000 ETH ICO's for $500 roughly. Now that's worth $568,000 for a risky $500 investment. So you have to ask yourself in the perspective of an investor a couple of things. Are you comfortable with losing $500 today with the potential of winning more? If you do lose the money entirely, will it put you in a position that is dangerous such as being evicted, not having money for food, etc?</p>
<p>ICO's allow anyone in any part of the world to invest even minuscule amounts into something that could have huge effects. Someone in a third world country could have $50 to their name and after a year be worth $55,600 which is an insane value had they invested that $50 into ETH in 2014.&nbsp;</p>
<p>From Coinustra.com, some of the challenges of ICO's are:&nbsp;</p>
<ol>
  <li>Some ICOs only exist on a whitepaper, not in real life.</li>
  <li>Some ICOs are done for the sole purpose of luring money from investors that later gets dumped into major coins like BTC/ETH to make profits for themselves.</li>
  <li>All ICOs are unregulated and unbacked by governmental laws.</li>
  <li>Most cryptocurrencies or tokens issued in an ICO have no proper wallets/storage mechanism.</li>
  <li>Some ICOs have very shady or non-transparent ways of working.Some ICOs issue 100% pre-mined tokens or cryptocurrencies. A significant portion of these tokens the owners hold to manipulate the market. One is such example is&nbsp;<a href="https://bytecoin.org/"><u>Bytecoin</u></a> which had 82% pre-mined coins.</li>
  <li>Some of these ICOs have good proof of concept but lack a solid delivery team.</li>
</ol>
<p>How to tell if an ICO is a scam or not? (also from Coinustra.com):</p>
<p>So how do you judge whether an ICO is a scam or not? Here are a few suggestions from our side:</p>
<ul>
  <li>Check whether the project is solving some real life problem.</li>
  <li>Check if they have a strong leader or CEO or founder.</li>
  <li>Check the portfolio and history of the development team.</li>
  <li>Check the background of the team; see if any one of them is connected to any past scam.</li>
  <li>Check the&nbsp;whitepaper and look at its technical feasibility.</li>
  <li>Check if they have an open and transparent community.</li>
  <li>Evaluate if they can explain the problem they are solving in a clear manner in the whitepaper.</li>
  <li>Join forums to check what the technical experts think about the project or DApp.</li>
  <li>Check their development roadmap.</li>
  <li>Check if they have a working prototype demo of the&nbsp;project or DApp.</li>
</ul>
<p><br></p>
<p>Analyze, be aware, and research! Good luck.&nbsp;</p>