It has already been discused a lot of times in this board, but yes, a lot of people are investing in icos and a lot no. most people in here doesnt like ico's because it is a very risky investment, and so many users have lost a lot of money because of them.
Only the most newbie users are investing in there, because they want quick profit once that the token gets listed on an exchange, but it is a very risky process and a lot of icos need some time before getting listed on a good exchange like cryptopia or bittrex.
but no, i dont use to invest in icos.
You are absolutely right about the risk about most ICOs, which is why we actaully use most of the money to buy the asset that's backing our coin.
Like that, even in the worst case scenario, the coin holders can redeem their coins for the asset itself (which can be traded/ sold/ used).