Offering (ICO) Advisory
What is Initial Coin Offering (ICO)
An initial coin offering (ICO) is the cryptocurrency industry’s similar to an initial public offering (IPO). ICO is considered a new form of crowdfunding method for issuers to raise funds from a group of people with a small amount of money. A company looking to raise money to create a new coin and launches an ICO as a way to raise funds.
During the ICO campaign, supporters of the project buy some of the project’s tokens with fiat or digital currency. These coins are referred to the buyers as tokens and are similar to shares of a company sold to investors during an IPO.
How does an ICO work?
An initial coin offering is a sophisticated process that requires a deep knowledge of technology, finance, and the law. The main idea of ICOs is leveraging the decentralized systems of blockchain technology in capital-raising activities that will align the interests of various stakeholders. The steps in an ICO are listed below:
Identification of investment targets
Creation of tokens
Total ICO amount raised: More than $14.8 Billion
Benefits of ICO
Easy and Quick Set up
Compared to traditional fundraising methods, ICO appears as a relatively quick, uncomplicated way to secure access to funding with low barriers to entry. ICO is suitable for small and medium enterprises to raise funds because it does not request requirements such as to meet minimum earnings or established 3-5 years financial accounts, etc. Additionally, the marketing and processing costs with ICO are considered lower.
Remain Ownership of Stake
By investing in ICO, investors do not result having an ownership stake in your company. You retain full ownership and control over your business. You are raising funds via ICO providing a blockchain equivalent to a share which is a cryptocurrency token. This token can be used as a utility token to purchase a product or service that your company is offering, or it may just represent a stake in the company.
Ability to trade 24/7 and early investors are free to sell their token after the ICO completes and the token listed on the exchange.
Access To The Global Market
The ability to trade around the clock, with a range of currencies, offers investors both convenience and liquidity. These same characteristics open up the market to smaller investors who wouldn’t normally have access to the more avant-garde types of assets.