IPO vs. [Serie Teil 1]
article ICO – the purpose and the utility have:
IPOs and ICOs have much in common, but also fundamental differences. In our post series, we explain the main differences from the initial public offering (IPO) on the Exchange and an initial coin offering ( ICO) on the Kryptowährungsmarkt. Current content: the purpose of the funding and the utility.
Why do companies an IPO?
The IPO allows young companies to record risk capital, so that investments and to be able to make expansions. Larger, existing companies can go the way of IPO make tradable shares in this. The owner, type, off their investments. It’s in this case rather an “exit”, that is the (partial) sale of the company.
The Exchange ARD describes this as follows:
“an IPO a company risk capital from outside gained by use of the equity as a financing instrument.”
Why do companies an ICO?
Currently, ICOs used predominantly by young businesses and start-ups. They are typically used to finance future projects – often it’s decentralized platforms. Rather more rarely is, however, existing companies that perform an ICO to tradable shares and sell the own ownership stakes.
What is the utility of one share and a token?
There is another difference in the utility, so the usability of token vs. shares. While shares in each case is a pure financial construct to the illustration of corporate shares, token, can have a utility. This means that these tokens have a clear purpose in the project, are required in a way such as to the use of the platform. Not always a token has a utility and can represent only a fraction of winning permission as well as a stock, in principle a token can be used but compared to the stock as used goods.
How does the function of ICOs change in the future?
As already indicated, can an ICO represent a pure financial vehicle for permission shares of the profits as well as a token launch that meets a certain utility. Therefore, it is not precisely to draw the above distinction between ICOs and IPOs, but in the course of time to consider.
Although the most ICOs currently prefer a utility token is good to imagine that just a tendency to tokens, which depict a share, will show in the coming years. Because even if a token acts only as a percentage, it offers certain advantages over shares, which are traded on a stock exchange (more about that in a later part of this series). Thus, the scope of distributed platforms and Blockchain projects would extend to any company. Until then however requires a clearer Regulation .