The advent of ICOs has been making headlines and gaining massive interest these days. ICOs ( Initial Coin Offering ) is similar in concept to initial public offering (IPO) which raises funds when a new company ventures onto the stock market as both allow start-up companies and entrepreneurs to raise funds. They are another new way for companies to raise capital and develop projects around decentralized applications. Through ICO trading platforms, investors receive unique cryptocurrency “tokens” in exchange for their monetary investment in the business. A company looking to raise money to create a new coin, app, or service launches an ICO as a way to raise funds. Interested investors can buy into the offering and receive a new cryptocurrency token issued by the company. This token may have some utility in using the product or service the company is offering, or it may just represent a stake in the company or project. There’s no doubt that ICOs have proven to be an excellent way of generating capital.
Before we take a closer look let’s step back and briefly examine what we mean by terms like cryptocurrency.
How Does An ICO Work
Identification of investment targets
Creation of tokens