It doesn’t matter if you are a newbie or have already entered the world of finance some time ago, we’re almost sure that you’ve heard the term ICO several times.
What is the purpose of ICO?
The acronym ICO stands for Initial Coin Offer (Initial Coin Offer). ICO is the way companies can raise funds for a specific project. By launching ICO, the company offers a digital asset (cryptocurrency) in exchange for funds invested in the project.
ICO can be compared with the Kickstarter campaign, a popular platform for direct financing by individuals of specific projects.
One of the key advantages of ICO over any other way to quickly raise funds is the high speed of the process itself. By launching ICO, companies can easily complete the process of collecting risk capital.
Typically, an ICO begins with creating a brochure that describes the purpose of the ICO, including a description of the problem and its solution (and product), an explanation of how digital assets interact with the product, a description of who assembles the team and the input plan. in operation.
OK, so how does the ICO campaign work?
As soon as the brochure is ready, the ICO campaign starts, opening the doors to enthusiasts who are ready to invest in the company. In exchange for money, investors will receive a digital asset. They play the role of shares in the initial public offering (IPO).
If the campaign does not collect the necessary amount of funds, all money is returned to investors, and the ICO is considered unsuccessful. Otherwise, if you manage to collect the required amount – the plan was successfully completed.
Why should I be motivated to invest in an ICO?
The same logic applies here as with stocks. Buy at a low price, sell at a high. If you have time to invest early enough, it is likely that you will buy assets at a fairly low price. If the campaign is successful, the demand will increase over time, which will push prices up, increasing your potential earnings from acquired cryptomonet.