Than ICO different from IPO? Understand the aspects
Source:The New technology of cryptocurrencies has brought us a new investment option – the initial placement of tokens (ICO). So if you have some money to invest, you can choose a well-known company for financing through a classic IPO or to support some of the young startups on ICO. What to choose and what really is the difference?
the First and main difference: an IPO is usually done by companies with experience, whereas ICO – young and risky. If to illustrate with a metaphor, an IPO is a 40-year-old owner of the company-manufacturer of garden machinery and ICO 18-year-old computer nerd that collects your supercomputer in my dad's garage.
The first is the famous, profitable business, convincing a Bank account and a positive business reputation. The second none of the above no – he may be the new . And perhaps after a year, his bright idea will be forgotten.
Whether you Prefer to invest in young and unknown computer genius or a respectable businessman in his middle ages? The intention is the same: the hope that the business will grow and with it will grow your profit.
Let's look at the differences between them.
theproject Requirements
Source: Unsplash
IPO
There are a number of requirements that must be performed by the company before the offering of its shares for sale through an IPO. Including the requirement for a minimum income threshold and good performance. Traditional emission during IPO can be a long process because of the inherent legal delays and checks on compliance. Another requirement is that the prospect. The prospectus is a legal Declaration of intention to issue shares to the public and shall include key information about the company and the impending IPO. It is necessary that potential investors could make an informed decision. the Thus, for IPO need lawyers, banks, and patience.
ICO
Because the ICO is not required to adhere to any regulatory framework or legal Protocol, most of the projects there is no record, but their project only reinforced wallpapera.
The duration of the ICO process much less. Typically, a project ICO publishes Wallpaper, but here, in contrast to IPOs, there is no formatting standards. Also keep in mind that in some countries such a document has no legal force. the Get ICO for need programmers and the Internet. All.
theRequirements for investors
Source: Unsplash
IPO
If you invest in a company from your country, it's all quite simple. If you invest in a foreign company, usually there is an additional legal procedure, so it is likely dobavka need to use a broker.
ICO
This is the best part. The only thing needed to access to the Internet. You can buy any tokens of any company from any country. The exceptions are some American projects, defined as securities. These projects are inaccessible to US citizens, otherwise they would have had statements in the spirit of the IPO. And this would go against the very essence of ICO.
theUtility (investors)
Source: Unsplash
Suppose both types of investors are lucky and the investment was profitable. What do you get?
IPO
Shares acquired through an IPO represents a right to a share of the future earnings of the company. Shareholders receive annually depending on the progress of the company during the year. Another way to earn is to invest at an early stage and to sell stocks when their costs increase.
ICO
The main thing to remember is that coins do not give rights of ownership of the project. To invest in tokens there are many ways to obtain future benefits, depending on how the coins are structured. We can talk about a fixed price at which you can buy or sell; on the payment that you will receive if the company earns more than a certain amount; or of the right at any time to come to the office and lunch in its dining room. Whatever it is, it is prescribed in wallpapere project.
thedoes this Mean that the IPO ICO safer?
So it might seem, but actually it is not. All documents related to the audits and legal requirements, the company can still go bankrupt and your investment will burn. On the other hand, if you choose a promising project ICO, this can be a very profitable investment with a much smaller bureaucracy. In both cases, it is strongly recommended to carefully study all available sources to ensure that the project is worth your money.
theICO and IPO – pros and cons
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