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An Explanation of Initial Coin Offerings
Article

An Explanation of Initial Coin Offerings

Nathaniel Popper
The New York Times, 2017
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Editorial Rating

8

Qualities

  • Eye Opening
  • Overview
  • Engaging

Recommendation

A growing number of tech start-ups are attracting capital through initial coin offerings (ICOs), a crowdfunding arrangement in which companies issue their own digital money to fund projects under development. In this incisive and highly accessible article, financial journalist Nathaniel Popper explains the ICO process and identifies the risks people take in making these idiosyncratic investments. While never giving investment advice, getAbstract nonetheless recommends this worthwhile read to entrepreneurs, investors and anyone interested in how ICOs work.

Take-Aways

  • Initial coin offerings (ICOs) allow fledgling tech companies to raise capital without selling stock or relying on venture capitalists.
  • The start-ups create and sell unique currencies, which purchasers can only use to access future products or services.   
  • Small start-ups may prefer ICOs because they can raise much more money than they likely could through venture capital, and they do not have to transfer any ownership shares to investors. 

About the Author

Nathaniel Popper writes about finance and technology for The New York Times.

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