Initial Coin Offering (ICO) is a way to raise money for creating a new coin. The concept is similar to that of an Initial Public offering except that ICO uses cryptocurrencies. The people who are interested in investing can invest in the new coin and in return receive benefits such as returns or cryptocurrencies.

There are two kinds of ICOs, private ICO and public ICO. In private ICO only a limited number of investors can participate whereas public ICO is for the general public where anyone can invest in the company.

There are however a few risks of ICO. The biggest one is the ICO scam or an exit scam. An ICO scam is when people pretend to have created a new cryptocurrency and make it look very promising. As soon as they collect the investors’ funds, they runaway and vanish with all of it leaving no trace behind.