The initial coin offering

In the previous section, we talked about a traditional fundraising roadmap for blockchain startups. However, startup founders do have concerns regarding private investors such as VC capitalists. It is possible that VC capitalists establish their own management team and push out the founders when the company is on a solid footing.

Internet and blockchain provide technical platforms for entrepreneurs who can reach out directly to public investors for raising funds. Consequently, ICOs became the most popular fundraising methods for founders to finance their blockchain projects. ICOs give blockchain startup founders a way to bypass IPOs and raise a large sum of money from public investors at the startup formation stage. In 2017 and 2018, tens of billions of USD were raised via ICOs. Since ICOs are closely related to tokens and crowdfunding, we will first explain the basic concepts of tokens and crowdfunding.