what does Initial Coin Offering mean in business? How does it differ from IPO?
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what does Initial Coin Offering mean in business? How does it differ from IPO?
Initial coin offering is one of the several by-products in the world of the cryptocurrency. Start-ups and existing businesses are turning to alternative sources of capital as opposed to classical channels like banks or venture capitalists. They can offer the inner value of their business by selling tokens, i.e., units of the chosen cryptocurrency, like a regular firm would do by means of an IPO. The investors, of course, hope for an increase in the value of the token in the short term, provided a solid and valid business idea typically described by the ICO issuers in a white paper.
Initial Coin Offerinf is just like initial public offering but just that ICO operates in the cryptocurrency world. The rise and far of crypto has been of huge benefit to ICO. It is mainly used by tech-entrepreneurs to source for funds for their startups. Tech Startups use ICO to raise capital without intermediaries as it leverages on the decentralized blockchain system. It involves identification of investment targets, creation of tokens, and promotion campaigns.