Initial Coin Offerings: Economic Reality or Virtual Economics?
Mark J. P. Anson · The Journal of Private Equity · 2018
Since the birth of Bitcoin in 2009, digital currencies have grown exponentially, spurring debate over their legitimacy. Despite their controversy, they are now impacting the way start-up companies raise capital to finance their initial operations. Called Initial Coin Offerings (ICOs), these funding vehicles raised over $4 billion in 2017. In this article, the author explores the economics of ICOs, and consider their risks and regulatory implications, and their placement within the capital structure of start-up companies. TOPICS:Private equity, legal/regulatory/public policy, currency, risk management