How to Launch an ICO

Many of companies over the world are faced with a problem of funding. In this case, size doesn't really matter because it happens to both beginners in the world of business and big players. Such companies as MailChimp, Shopify, Braintree had no money at the very beginning and got funded.
Nowadays, technologies make investments easier and it's not even necessary to look for investors in some cases. In this article, we will consider Initial Coin Offering (ICO) investment scheme.
What is ICO?
ICO is a new way to fund projects. The scheme is pretty similar to the traditional one with shares and has exactly the same purpose -- raise some money to grow the business. But instead of shares, investors or people who just want to support the project buy ICO coins (also known as altcoins) or tokens via Initial Public Offering (IPO).
Both coins and tokens are cryptocurrencies but they vary. Before we continue moving forward let's find out what's the difference between crypto coin and token:
Coins
As it was mentioned, tokens and coins differ. Coin is a separate currency that has its own blockchain. So, to create your own coin, you have to develop own blockchain from scratch. The examples of such coins are Ethereum, Ripple, Omni, and others.
Tokens
What is token? This is a category of cryptocurrency that functions on the top of a blockchain and hasn't its own. So, it takes much less time for a development team to build a token based on existing blockchain solution than to create one on their own.
ICO crypto types

Further in the article, I will use the term 'tokens' to avoid saying 'coins and tokens' all the time. We hope that we've managed to cover all questions related to 'what is initial coin offering' and 'cryptocurrency coin vs token'.
Let's continue to another frequently asked 'versus' question.
ICO vs IPO: Difference
One of the distinctions with traditional funding (IPO) is that tokens can be bought not only with the help of ordinary currencies like Euro or USD but with the help of cryptocurrencies like Bitcoin and Ethereum.

Besides, an ICO campaign has some set goals that indicate what amount of money a company should collect and for what timeframe. As we can see, the principles of ICO resemble crowdfunding campaigns on Kickstarter or Indiegogo.

In case the token investment goals are reached within the set period of time -- the company invests money into the business and starts distributing tokens to people who took part in funding. After that, these investors can start trading these tokens on cryptocurrency exchanges.
It's worth noting that just as in the case with shares, the price of tokens directly depends on the company's growth. In other words, that implies certain risks for investors. Let's take Ethereum (ETH) cryptocurrency as an example. The company raised $18 million in 2014 and since then its coin grew in value from $4 to more than $450 at the moment of writing. I think that was a worthy investment for the company's supporters.
As a rule, the team that conducted a successful ICO campaign takes a portion of fundings (let's say 5-10%) and set them aside to cover the expenses related to UI/UX design and development. That's needed to keep working on a project all the time.