ICO as a Modern Method for Financing High-Tech Projects

ABSTRACT

Attracting investments is one of the most significant problems faced by management at any stage of a business project’s life cycle. Besides traditional fundraising channels, relatively new methods of raising financing, such as crowdfunding and initial coin offerings (ICOs), have recently become more widespread. This route is most frequently used by teams implementing high-tech projects. Investor interest is heating up because of the rapid growth of cryptocurrencies and also because of the policies of a number of leading countries that support the circulation of cryptocurrencies and cryptocurrency transactions. This article surveys global experience with ICO and conducts a SWOT (strengths, weaknesses, opportunities, and threats) analysis of this mechanism for attracting investments. It also considers examples from the actual economic practice of recent years. These examples illustrate the capabilities and limitations of this method. Taking these into account, the article formulates several scenarios for the development of the technology used to create and use cryptocurrencies. It also assesses the prospects for carrying out an ICO based on issuing such currencies.

KEYWORDS:

• bitcoin
• blockchain
• cryptocurrency
• fundraising
• ICO
• investments
• SWOT analysis
• token

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

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