IPOs vs ICOs - whats the difference
Recently, ICO versus IPO is increasingly common. This is largely due to the fact that in general terms the two procedures are quite similar in terms of the layman. However, they differ in many parameters and this comparison is largely inaccurate. First you need to decide what is ICO and IPO.
What is ICO?
ICO is a tool by which young developing companies can sell digital tokens to finance their business processes and achieve other goals.
To run an ICO, a startup prepares a special document - white paper. It regulates the main details of the project, indicates the intermediate goals that need to be achieved, determines the number of tokens issued for fundraising, and describes what percentage of assets the creators plan to keep.
What is an IPO?
An IPO is a tool that allows companies to sell their securities to the public for the first time. Despite the fact that they mostly sell shares through IPOs, companies can also distribute other securities: bonds, futures, warrants, etc.
To run an IPO, a company usually hires several investment banks (underwriters). Further, these underwriters work with the company to understand which securities to sell and how much investment it will attract.
The purpose of an investment bank is to prepare a preliminary prospectus. This document provides investors with information about the company, including the following: a description of the business plan, ownership structure and management; financial documents and strategic initiatives.
After further processing and revision, this preliminary document becomes the final prospectus, which will later be submitted to the Securities and Exchange Commission (SEC), where the IPO application will be formed.
Read more:
https://openpackagingnetwork.tumblr.com/post/180688484250/ipos-vs-icos-whats-the-difference