Technology

Explainer: Going bananas for ICOs

Okay, I’ll bite; what the heck is an ICO?

06 November 2017

Say an IPO — initial public offering — and crowdfunding hooked up and had a baby. Their offspring is an ICO, or an initial coin offering. So, it’s a way to fund your startup using crowdfunding principles, where, instead of offering shares, you offer your investors cryptocoins in exchange for regular money or cryptocurrency. You promise them the coins will be worth more than what they invested, at some point in the future, thanks to the success of your startup.

But why?

It’s unregulated, so it’s quicker and cheaper to raise capital compared to typical fundraising processes like venture capital investment or an IPO. Also, it’s disruptive, counterculture and a little bit sexy.

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