Business Commons^™

Ico As Mainstream Method Of Capital Raising, Eduard Yelagin

Undergraduate Research

We develop a theory of financing entrepreneurial ventures by Initial Coin Offerings (ICOs). We show how distributed ledger technology (Blockchain) allows ventures to significantly decrease the price of issuance of new types of securities relative to a traditional venture capital (VC) approach. In addition, we discuss several types of new securities, called tokens. We explore the source of their value and benefits (and negative qualities) for entrepreneurial ventures and investors. We find that, in general, different types of tokens can provide unique benefits and additional information about a tokens’ issuer market sentiment. The following information would become available with the …