When it comes to cryptocurrencies, the initial coin offering (ICO) is structured similarly to an IPO. While an IPO sells a portion of stock of a company, an ICO is the first time a token is available for purchase. It's important to note that in most cases, unlike an IPO, investing in an ICO will not result in you owning a stake in the company to which you're giving your money to. You're exchanging your money for the new currency, coin, or tokens, betting that the currently worthless currency you're paying for will appreciate in value and earn you benefits in the future.

How ICO works?
An ICO typically begins with a company releasing a whitepaper outlining the project's goals, the number of tokens that will be mined, and how the distribution will be. Investors may be given lower prices as a benefit if they purchase tokens early in a campaign. It may also be possible to receive discounts if investors pay with cryptocurrencies instead of fiat currency.

Tokens sold during ICO process may offer other benefit aside from discounted price, for example the owner can exchange them for access to a specific product or service. In rare cases, they may represent a stake in the company that launched the listing.