Blockchain and Cryptocurrency Advanced - Private Sale in the Crypto Space

Private sale

Private sale is basically the first sale phase initial coin offering (ICO) that is done privately. The private sale in cryptocurrency is most times carried out during the development stage. The purpose of the private sale is for the team behind the project raise funds for the continued development of the project by carrying out a private sale without announcing to the general public. This allows the selected investors such as individual investors, institutional investors, corporate entities who belief in the idea of the project and after reviewing the documentation of the project, the purpose of the project, the solutions it offers, to invest in the project in exchange of the project’s cryptocurrency at a much discounted rate.

The main purpose of private sales is for the project to raise funds for the continued development of the project. Depending on the project and the amount of tokens set aside for the private sale, projects who hold private sales can raise a lot of funds needed to complete the project and make it ready for the general public. The Investors who are also known as early investors invest in private sales expecting to make a return on investment when the project gains popularity and adoption.

Benefits

• The private sale investors have the privilege to acquire the coins at a much cheaper price which means that they stand the most chance to make the most ROI when the project gains popularity.

• A great opportunity for the investors to make huge profits from their investment because they invested at the bare minimum price.

• Investors in the private sales can acquire more as much coins as possible based on the percentages allocated for the private sales

• Investors have the opportunity to have a close communication with the team behind the project they want to invest in.

• Investors in private sales stand a chance of receiving bonuses and other privileges for investing in the private sales.

Risk involved

• Investors who invest in private sales stand the most risk of losing their investment capital if the project doesn’t fulfil its potential.

• Investors in private sale cannot sell their assets acquired in the private sale if there are no available market for the assets.

• There are no refunds in private sales which means that investors cannot get their capital back if the project fails even before achieving any growth

• Depending on the private sale, investors might have their coins or bonuses received locked up for a certain period of time before it can be unlocked.

• The assets acquired in the private sale can become worthless due to some negative factors