You can treat ICO as IPO in crypto space. ICO is the medium for projects to raise the capital they require for building there projects. They ask public to invest in them before the project is out in market and in return they provide coins on a cheaper rate then the expected rate on listing.

Scammy or Not? Depends upon projects, you need to be very careful while investing in ICO, a lot many scam ICOs are out there which just run away after taking your money.