Here is an opinion of Bruce Hunt, a Bitcoin early adopter and a user of hackernoon.com.
This is how the process looks.
1. Evaluate the team — you need a competent team to manage multi-million dollar funds, and to execute smart business decisions.
Founders have to own relevant experience (can be checked by google search) and show high level of integrity (look through their social networks)
Team should also involve several (or better many) developers (both blockchain and non-blockchain).
2. Evaluate the project
Try to get an insight on how successful the project solves real-world problem. Do you want to make this happen? Are you ready to give a donation (consider it not like investment) to make this happen? If yes, go to the next step.
3. Evaluate the funding and distribution of tokens
It is important to check whether the project’s financial goal is adequate. For instance, Ethereum collected 18 million dollars on its ICO. Check the adequacy of the project that is in focus of your attention by comparing to similar ICOs or ventures.
4. Evaluate the sentiments around the project
What does the crowd say about your project? Check it on social networks. Projects have to have fans to be successful.
5. Evaluate the community support
Is the crypto supported by reliable exchanges? What is the size of the community and how strongly people support the coin? These are questions which could direct you to a right decision.