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7 key differences to know about ICO Vs IPO

7 key differences to know about ICO Vs IPO

ICO generally stands for Initial Coin Offering is a kind of crowdfunding to raise money for the project. IPO stands for Initial Public Offering is a traditional mechanism to raise money for businesses by selling stocks of the company or a business to the public. Both raise money for the businesses but there are subtle differences. We will see what are key differences between ICO vs IPO.
Read more about ICO whitepaper,
15 point checklist to read ICO whitepaper

  Sr. No.  IPO  ICO
   1 Backed by a legal document called prospectus. No legal documents. However, ICOs generally release white papers.
   2 Must meet standards of regulators to bring transparency There is no fixed standard for the whitepaper.
   3 IPO must declare future of IPO and information regarding the company Even future of ICO is declared in whitepaper, it is not binding.
   4 IPOs generally release stocks to investors thereby giving the stake in the company ICOs generally release tokens or crypto coins but do not give any stake in the company.
   5 IPOs deal with securities ICOs generally deal with utility tokens and most of the times they need to declare or prove themselves as a non-security asset.
   6 Every country has their own processes and compliances for IPOs and hence it is time-consuming activity. It could take  generally 4 to 6 months. There is no binding on ICOs for their duration. ICOs can keep on running till their hard-cap for funding is reached.
   7 Most part of IPOs is generally allocated to big investors and only small part is reserved for retail investors  Anyone having bitcoin, ethereum, ripple or other cryptocurrencies can participate in ICOs. Some ICOs however allocate certain percent of their tokens to initial investors, founders.

Do you know any other subtle and important difference between ICO and IPO? Do let us know.

PC: pablo,unsplash

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Mandar Pise Opinions expressed by techsutram contributors are their own.

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