Initial Coin Offering (ICO)

Writtey by Josh Shaked and Jack Ortner

Introduction

An Initial Coin Offering (ICO) is a form of fundraising on the blockchain that is facilitated through the creation and sale of digital tokens. Many start-ups don’t want to go through the expensive and time consuming process of an IPO or pitching to venture capitalists and angel investors to raise money. In order to circumvent the capital formation process, entrepreneurs can access a diverse pool of global investors and gain funding without giving up equity.

Unlike crowdfunding, where investors do not expect a return on their investments, ICO contributors look to profit from the appreciation of the value of digital tokens. Additionally, ICO token holders can be expected to perform work for the blockchain network and be paid for these services in the case of work tokens.

Suggested Reading

What is an Initial Coin Offering by Nathaniel Popper

Initial coin offerings, explained by Justin Jaffe

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