Which is the best option for a project to raise funds?

An offering is basically a marketing term that denotes the issuance of a company’s securities at times when its profitable shares are made available for purchase to the public.

The various kinds of offerings available at the market today for a company to raise funds needed for its business growth or development include IPOs, ICOs, STOs, and IEOs.

With the immense market craze of cryptocurrencies in the year 2017, ICOs went global and gained enough buzz in the crypto business space. But due to the lack of regulatory regimes, they have been facing a lot of scam or fraudulence concerns in the market over recent years. This has made the investors become skeptical of the industry.

The regulators around the World have tried to protect investors and to address the challenges of ICOs by stepping their efforts in establishing some crucial regulations in the world of investments. As a result, STOs were getting into the market with absolute regulations and with a pass in the Howey test. They have made the scams hard to exist.

ICOs not only paved the root for the emergence of STOs but also the IEOs. A unique feature that the IEO models bring in to the investment market is liquidity. 

IPO:

Initial Public Offering is a traditional fundraising model that signifies the fact that a privately-held company is going public by selling its shares to the institutional or retail investors for the first time in the stock markets like Nasdaq or NYSE (New York Stock Exchange). It gives rise to the chances for secondary share offerings in the future.

ICO:

Initial Coin Offering is a kind of cryptocurrency funding mechanism that allows startup companies to raise their business capital rates by selling tokens or coins to the investors or speculators in exchange for some other standard fiat or cryptocurrency types such as bitcoin, litecoin and ethereum and so on. It has been revolutionizing the upcoming economic/financial models for a variety of businesses across the Globe.

IEO:

Initial Exchange Offering is also a kind of fundraising mechanism, where a third party or partnering cryptocurrency exchange works by selling tokens on behalf of a blockchain startup.

STO:

Security Token Offering is a token sale process with enhanced security. In an STO, security tokens are issued to the investors in return for their valuable investments. STOs came as gifts for those investors, who are more serious in their investments as they are highly regulated and secure.

Chief differences - IPO, ICO, STO, and IEO:

·         In general, well-settled or developed companies make IPOs or STOs, whereas the new startups make ICOs or IEOs.

·         In terms of offerings: IPOs account for share trading, whereas ICOS, IEOs, and STOs account for token or coin trading.

·         IEOs, STOs, and IPOs possess significant mitigation towards the legal risks but ICOs do not.

·         STOs and IPOs are highly secure with enough regulatory standards, whereas, IEOs, and ICOs are not that much regulated (less-regulated).

·         IPOs offer stocks to the shareholders/partners, whereas the STOs, ICOs, and IEOs offer security and utility tokens to the investors.

·         In cases of IPOs, ICOs, and STOs, the concerned company possesses a direct control over the token sale event. But, in the case of an IEO, an intermediary exchange controls the token sale process to represent a startup company.

·         STOs are highly transparent and secure with faster listing abilities in comparison with the alternative fundraising mechanisms like ICOs, IPOs, and IEOs.

Conclusion:

Every fundraising option has its own unique merits and demerits. So, do perform deep research and always be cautious before selecting an option for making investments.

Though ICOs have some security concerns on one side, they have a lot of advantages on the other side. 

Thus, a promising, simple and recommended option that suits the best for all kinds of businesses with considerable benefits is the ICO. 

In order to launch your ICO, you can better go for a market-leading ICO service provider like Shamla Tech. If you do so, then they would certainly help you out with exceptional ICO development services that you have ever seen before in the market.