Coin Fundraising Methods
Token offerings have emerged to become the most common type of fundraising method in the blockchain space. This fundraising tool enables startups to raise funds without parting with any of their equity, retaining full control of their company. There are three popular ways cryptocurrency and blockchain projects raise funds.
Initial Coin Offering (ICO)
Initial Coin Offerings are used to raise funds for developing and launching blockchain products and services. In exchange for funds, these projects offer crypto coins and tokens. These coins and tokens are native to the blockchain where the crypto project will be built. In the 2017 Bull ICOs raised a total of $5.6 billion.
Initial Exchange Offering (IEO)
An IEO is still technically a form of ICO, but the main difference lies in where the coin or token is offered. An IEO offers tokens through a partnering exchange, rather than directly to investors. Initial Exchange Offerings have become a theme of 2019 — just as ICOs became a theme of 2017.
Security Token Offering (STO)
Security Token Offerings or STOs are fundraising tools more inclined to regulatory compliance. Compared to ICO and IEO, STO is more complex and difficult to deal with.