Mar 14, 2018

An initial coin offering or ICO is a way for start-ups to crowd-fund investment.

Instead of raising cash from venture capitalists, a company can hold an ICO, which allows people to invest a cryptocurrency, such as ethereum or bitcoin, in exchange for a new token that's issued by the start-up.

The new digital coin is not equity. Instead, it can be used in exchange for future services offered by the company. It's also possible that the new coin may climb to a much higher value than the initial investment.