Any new business venture needs resources in order to succeed. It is possible to bootstrap a startup by only having the founders put in their time, but at some point any company that wants to go big must raise financing.
The most realistic way of getting access to funding, when a company is considered risky because it doesn't yet have a track-record, is approaching venture capitalists. However, you can end up with a "raw deal" if equity is not distributed in your favor. And the amount of money these early stage businesses get in their first funding round, typically range anywhere from the $100k's to a couple of million at the the highest level.
If a startup succeeds in acquiring the money it needs to grow, the next stage will be taking it public, raising money from the stock market through an Initial Public Offering. Unfortunately, very few companies will ever get to the stage to be qualified for an IPO, because of the heavy regulatory burden and requirements to be publicly listed. Not all companies end up becoming the next Facebook or Snapchat.
But there is another option available, cocked up by blockchain developers, making the cryptoanarchists wet dream a reality... enter the Initial Coin Offering.
An ICO (also known as a Token Sale) allows a project to raise financing by selling tokens, which usually can be redeemed for services the project will provide in the future, or have other features.
Most of these ICOs are happening by issuing tokens through a smart contract on the Ethereum blockchain, which makes Ethereum more valuable as well, when it's used as infrastructure to power these new tokens.
A good example of how effective an ICO can be is block.one, raising $185 Million in only 5 Days.
block.one claims to provide an "end-to-end solutions to bring businesses onto the blockchain from strategic planning to product deployment."
After previously calling bitcoin a bubble, Mark Cuban is launching an ICO for his company Unikrn. In other words, this funding route hasn't only proved to be effective, but is already bleeding into the mainstream.
