A pre-ICO is a way for the company to raise money for their block chain project. This is a newer phenomenon that just showed up recently with the wave of the new campaigns. Think of this as somewhat like the California Gold Rush. The company allows selected few people to buy the tokens before the official crowd sale begins. No funds are raised for them but this gives the whales an opportunity to stockpile the tokens that they are trying to sell.
So why a pre-sale?
This is usually done by companies to get angel investors. These angel investors do not constitute or may not even reach 10% of the suggested hard cap, but they provide a lot of operational costs for the company while they are still finishing up their white papers or their roadmaps. The money raised with the pre-sale is also usually used in building infrastructure.
So who can avail these and when do they happen?
Pre ICOs usually happen a month or two before the stated Initial Coin Offering but can sometimes happen just weeks before it. Not everyone can be an angel investor. It takes a special kind of person to be able to get in these circles.
First, you need to be approved by KYC or Know Your Customer. They do not just sell these opportunities just to anyone.
Second, the pre-sale usually has a minimum amount and a maximum amount. The usual minimum amount for these would be in the $10,000 range and the maximum amount usually gets capped at $1,000,000 per person.
What are the benefits I get when I join these?
There are a lot of benefits for early adopters like them. People who participate in the pre-ICO usually get a cheaper price per coin and also a higher bonus amount. Aside from that, they get additional perks or merchandise like how Central gave their angel investors the Titanium card for free or Alpha access to the software or application the company is developing. The bonus percentage usually being offered in here is somewhere in the 50% or higher margin.
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