ICO (Initial Coin Offering) is similar in concept to an initial public offering (IPO), both a process in which companies raise capital, while an ICO is an investment that gives the investor a cryptocoin, more commonly known as a coin or a token in return for investment, which is quite different to the issuance of securities as is the case in an IPO investment.
While ICOs are to mainly raise capital for a start up, they are also used to kick-start the sale of a service to be taken to market or the use of a new cryptocurrency.