Entrepreneurship is a passion for people with Blockchain business ideas. That is great because they not only grow but also make others grow through providing employment opportunities. But not all entrepreneurs are equipped with the capital with which they can start their business. Venture capital is not a cakewalk. For those people, ICO has come as a savior. ICO (Initial Coin Offering) is a crowdfunding platform where you can source capital for your business by crowd selling digital assets. The buyers of the ICO are considered as the shareholders of the digital asset and each ICO transaction will be ledgered in the blockchain.
Difference between ICO and IPO:
Those who have indulged in stock markets know about IPO. IPO is the acronym of Initial Public Offering where the first time investors and the public are called for stock investing options. This is done not only to pool money but to put up some monetary discipline. In the case of offering and its functionality, ICO and IPO are similar. But IPO is for stock options and ICO is for tokenization of digital assets and crowdfunding. To be short, IPO is the crowdfunding and crowdsourcing theory and ICO is the digital form of IPO used in the cryptocurrency platform.
How does ICO crowdfunding works?
Step1: The start-up company that wants to gather capital for his business introduces a digital coin and puts it on sale as a matter of Initial Coin Offering.
Step 2: The company will fix a target goal of fundraising until which the token can be sold digitally
Step 3: The token can be bought on any form of cryptocurrency based on the format created by the start-ups. Mostly the tokens can be bought from any cryptocurrencies.
Step 4: The tokens after selling, if they reach the fundraising goal, the sale would be stopped and the tokens would be distributed to the buyers.
Step 5: If not, the cryptocurrency would be returned to the buyers to their wallet addresses.
Benefits of ICO crowdfunding:
First and foremost, ICO can crowdfund a targeted capital than any crowdfunding or crowdsourcing platform can do. As it lies in the trend of gathering crypto coins for crowdsourcing, this is the best method to gather capital for a start-up. Blockchain technology secures the data and transactions from being pulled out illegally.
ICO is better in terms of liquidity. Considering the liquidity criteria, ICO is more liquid compared to other crowdsourcing platforms. Also, there are no limitations if you want to invest in ICO. Wherever you live, whatever you do, you can invest in an ICO quickly and efficiently.
The ICO’s are shorter in duration. That means you need not wait longer to get your token or for the capital goal that you need to reach. Due to its shorter duration, it does not have a market depreciation and stands viable for the investors.
Low and affordable price is the prime aspect of ICO tokens. You can participate in an IPO but it involves a complex process and moderate to high investment. But in terms of ICO, that is not the case. The tokens would be sold for a low price and hence you can purchase tokens based on the crypto balance.
ICO is not a regulatory framework. As we know, the crypto-based investments and operations are not regulated and so the ICO. Anyone can buy ICO tokens for their cryptocurrencies and anyone can generate tokens and gather capital for their business.
ICO can involve various industries. The maximum ICO investment is the blockchain platform. A blockchain is a software but the platform can only be formed using a certain capital. Other such platforms include Healthcare, Electricity sector, etc.
Experienced investors have a greater trust for ICO’s because of their reliability and transparency. ICO is a trustworthy platform where you can trade on the token for your cryptos.
ICO can leverage your business and effectively improve the funding process. But before putting yourself into ICO with the help of Icoclone's ICO Script software, you should also know that they too carry a considerable amount of risk. If you are a startup, you need to generate a genuine paper for your ICO coin and if you are a token investor, then you should rely on trusted ICO tokens for your investments, which can leverage you good returns in the future.