ICO (Initial Cryptocoin Offering) — blockchain-based process to allow enthusiasts and supporters invest in startups and companies by purchasing part of its cryptocurrency tokens associated with their shares. ICO, like IPO (Initial Public Offering) is used to sell a stake and raise money, and they offer investors potential profit in exchange for a risk and possible failure to deliver on the promise.
In contrast to the Kickstarter-like crowdfunding which is basically a sort of donation, participants in ICOs have a financial stake and hope to obtain a return on investment for their contribution.
ICO removes many of the hurdles present in the VC process and allows startups to short-circuit their way to the market by directly presenting the idea to potential customers. This way, the process will also provide a way to gauge general interest on the project in the same way that presale works for Kickstarter projects.
