We see a lot of ICO projects these days. Although the concept is relatively new, it has become a popular method for startups to raise funds. The term ICO is short for Initial Coin Offering and is similar to an IPO, where companies allow investors to take part in funding their projects.
ICOs is a way for startups, mainly from the blockchain and fintech sectors, to raise finances for further development by offering its own digital tokens in exchange for established digital currencies.
As shown in this infographic, there now three categories of tokens the company can sell via an ICO: equity tokens, security tokens, and utility tokens. Each type has its own differences, so it’s important to decide which kind of cryptocurrency you are going to issue.
The equity token, for which the infographic is called, is a subcategory of security tokens and imply ownership of an asset, such as debt or company stock. The information below also describes the main benefits of choosing equity tokens, how this type of tokens will change the ICO landscape in the future and their current regulation.
Besides, the infographic explains how the token sale works, lists the key advantages over traditional capital raising, covers largest ICO scams, and mentions equity tokens previously issued by startups.