Rule # 3 Understand the project you want to invest in.
Do you know in which market it works? What competition does he have? What makes it different?
By investing your funds in any project you are actually a shareholder in a given company. Do you think that any fund would buy companies without checking what they buy? You must act in exactly the same way.
Maybe there is something that will not be consistent with your approach. Maybe the investment horizon will be too long? or maybe the risk is too high?
It’s better to know all about it at the beginning.
Also remember that a given project does not work in a vacuum and encounters different problems just like any other company, and despite the best efforts of the creators, something may go wrong. Also, try to assess the environment in which the project competes. Why should it go? Where is his advantage? The creators of the project will always look optimistically into the future, does your objective eye share their enthusiasm?
It’s better to reject two good deals than to lose on one very bad. Therefore, before you make a transfer, understand the industries, understand the project.
Warren Buffett did not invest in technology companies for a long time, because he did not understand them, did he lose it? No, he earned and slept peacefully because he invested in what he knew.