Initial Public Offering or IPO is a process in which a previously closed company becomes public and sells its shares to everyone.
In the cryptocurrency there is a similar process of initial placement of coins.
By analogy with the IPO, its name is ICO or Initial Coin Offering.
When ICO is held, not shares are placed, but tokens are placed.
Tokens can be bought and sold on cryptobearches by analogy with the shares of companies.
They may also have a lock-up period (a period of time during which the sale is impossible).
Purpose of ICO and IPO
That the IPO, that the ICO is designed to raise funds, but have key differences and different objectives.
An ICO is held to issue cryptocurrency and finance a product that will be bought for that currency.
The rights of token owners are secondary here.
IPOs are conducted to attract investment so that the company can scale up further.
Share owners have more rights than token owners.
These include the right to vote at shareholders’ meetings and the right to a refund if the company goes bankrupt.
ICO is regulated only by a few states. It is illegal in some countries.
ICO is only guaranteed by the project team’s reputation and blockchain technology.
An IPO is the exact opposite. Many countries have adopted regulatory laws.
Many companies, foundations and individuals can conduct an ICO. To participate, investors only need to have money and conduct a security analysis of the ICO project team.
An IPO is only available to companies that have been licensed to issue shares. In order to obtain it, the company undergoes a thorough review by the financial regulator of its country.
Investors should carefully examine the public data about the company issuing the shares and assess the long-term prospects.
IPO investments are made by professionals with extensive experience.
These are usually large venture capital, investment and pension funds.
ICO and IPO are very close in nature, only in one case are tokens subject to sale, and in another – the shares of the company.
ICO (Initial Coin Offering) – the initial placement of coins – tokens. Also ICO is often called the term crowdsale.
Please contact our specialists
- Project research;
- Token definition;
- Recommendations on the choice of jurisdictions;
- Registration of legal entities in the legal substantiation of the ICO process;
- Support in opening a bank account for operational work with ICO projects;
- Connection of merchant account to accumulate payments; see Details on ICO project support
In fact, ICO is the conversion of digital tokens into fiat money or cryptocurrencies. Investors are the buyers. ICO projects are related to the concepts of blockchain and cryptocurrency.
What is an ICO?
IPO (Initial Public Offering) – the primary public offer, the primary public offering – the first public sale of shares of a joint stock company, including in the form of the sale of depositary receipts for shares, to an unlimited number of persons. Sale of shares can be carried out as by placement of additional issue of shares, by public subscription, by public sale of shares of the existing issue.