03/02/2021
Key differences Between Initial Coin Offerings & Initial Public Offerings
1. IPO’s tend to be used by mature companies. These businesses often have a recognizable brand, a profitable business, strong financials & a positive business record. ICO’s have found more value with early stage companies who are creating a new product.
2. A traditional IPO can be a lengthy process, due to required legal and compliance processes. An ICO would usually start by producing a white paper outlining their idea and business strategy, the token rules, the total supply of the currency, how they will be distributed, and other special conditions.
3. Regulated securities are usually listed on an exchange, the platform serves as a register for all transactions that take place in the future.
4. Securities acquired through an IPO often represent an ownership stake on the assets and future earnings on the company. Crypto-assets on the other hand, do not grant ownership of the project. Consequently, the investor will claim ownership and usage of the token issued in the ICO but will not have any equity or voting power in the underlying company .