What is ICO and How it works
ICO is a great way of raising funds for various cryptocurrency projects. It is an effective way that startups use in order to avoid the regulated and harsh capital raising process that banking institutions and capitalists need. In this campaign, certain proportion of the cryptocurrency is sold to the venture backers really early for other cryptocurrencies or even legal tender.
How it works
When a startup would like to raise money by means of the ICO (initial coin offering) , there must be a strategy and plan on whitepaper to signify the details of the venture . It should describe what the project is focused on, what the project really needs, what it targets at fulfilling perfection. It must also mention the money which will be required to carry out the full project and how much pioneers can get to keep.
The plan should even state the form of currency accepted and the amount of time it needs to run the venture. During such a venture, the supporters of the initiative will purchase the crypto coins by using fiat currency. The coins are known as tokens and are much like firm shares which are sold to investors throughout IPOs. When the minimum funds needed are not obtained, then the funds are returned and the entire ICO is then regarded not successful. However, when requirements are fulfilled within a set time-frame, the money is often used to start the program or even finalized it when it was still moving along.
The investors who participate in the project early are mostly excited to purchase crypto coins wishing that the plan might be successful and after releasing they will have more value from it. You can find many successful projects in various economies that are certainly the vital point that stimulates investors.
Similarities
Same as the IPOs, a venture must be sold by a startup company in order to get funds which can support the operations of a company. The only difference is that IPOs work with investors while ICOs work directly with supporters that are really enthusiastic about new projects much like the crowd funding practice.
The funds brought up by means of crowd funding are actually donations. That is why ICOS are known as crowd sales. You will also find a lot of successful transactions this day. The ICOs are a revolutionary tool in this digital era. Nevertheless, it is crucial for investors to have safety measure as there are many campaigns which can turn fraudulent. To this impact, you will find many regions that disallow the use of ICOs at all. It is best to only purchase such currency from reliable sources in order to be safe.
According to how ICOs have grown over the last year, it reveals that there is certainly great opportunity. ICO marketing agency will help you in some of the most profitable campaigns in order to attain the best returns on your investment.