Pre-ICO is a mechanism that allows projects to start gathering funds among leaders of crypto society and other wealthy investors. During Pre-ICO projects typically aim to cover their operational costs that will take place during the main ICO.
Pre-ICOs are also considered as indicators of hype of a specific project. If users and community believe the team, the project is likely to raise their pre-ICO cap very fast. However, if project does not perform well, investors might also lose their investments shortly as operational costs are usually irreversible.
Here is a list of main pros and cons of investing in pre-ICOs by coinstaker.com.
• Projects usually offer discounts on pre-ICOs (up to 50%), this makes you outrunning other investors in terms of token price
• Tokens are likely to have an opportunity to be sold with profit either right after entrance of exchanges of in long-term
• Higher risks (a project might turn into a scam, the team will start to underperform before the ICO) compared to main crowdsale due to informal nature of pre-ICO