In my opinion, IEO is not for crypto startups that are seeking funds to kick start their project but for projects that have raised capital already or have rich advisor and team to fund the project. Fund-raising through IEO can be very challenging for startups that need money to kickstart their project, because they will need large amount of money to conduct their tokensale on good exchanges, as this exchanges only list projects that meet their legal requirements and can also afford to pay their listing fees. So the best means to raise money or capital for new projects is to present their proposal to Venture capital firms or Angel investors.
I don't think it's the case. No startups starts with zero capital. They need to have some idea and capital to kickstart a startup. If some project is capable of starting an ICO on their own, they too would be qualified for IEO if they are really dedicated towards the project. IEO doesn't take large sum of money to get listed but requires to complete some vital information about the project and the team.