ICO
From ForcaWiki, the simple encyclopedia
| In one sentence | A way for a company to raise money by selling its own brand new digital coins to investors, instead of selling shares of stock. |
|---|---|
| Category | Finance |
| Related | Stock, Financier |
Imagine a company decided to raise money not by selling little slices of ownership, but by creating its own brand new type of digital token and selling those instead, promising they might become valuable later.
An ICO, short for initial coin offering, is exactly that: a way for a company to raise money by creating and selling a brand new cryptocurrency or digital token, rather than selling shares of stock or borrowing through debt.
Fun facts
- ICOs became a popular, and sometimes risky, way to raise money during the rise of cryptocurrencies, including occasionally for film projects looking for a new way to attract financiers.
- Unlike buying stock, buying into an ICO does not usually give someone ownership in the company itself, just the digital tokens they bought.
- Because ICOs are so new and were, for a while, only loosely regulated, they have carried a lot more risk than more traditional ways of raising money.