Hi Streets,
I believe you all must be familiar with initial public offering of a company, when they offer there shares for sell to public in any of the listed exchanges across the world.
Well, since the era has changed and we are moving now in a world of digital money and crypto currencies, so the definition of IPO is moving towards a new generation.Basically ICO aka initial coin offering is the part of the public offering by crowdfunding, when a crypto currency startup raises money through investor by paying them the proposed crypto currency in advance,which is called token money.
Before creating a crypto currency, startup create a blueprint and makes all the plan how many coins should be there in circulation, how many would be pre mined, if the currency is minable. If the ICO campaign meets the requirement of the money needed to initials the project then it considered successful else investor money is returned to them for not meeting there pre planned capital to backup the project.
Those pre mined coins used get there first funding from investors by offering them in lieu of money. ICO not only gives the entrepreneur to bootstrap there planning but also help them to scale it on large scale.
Recent examples of ICO's.....
Ethereum in 2014 raised funding by ICO which now is a major crypto currency with a market capital of 26 billion dollar.
An another currency mastercoin raised money in 2013 by crowdfunding the initial project..
In conclusion ICO is just the fulfilling initial financial requirements of a crypto startup..
Hope it helped...
Thank you!!!!!!