2021-08-05 19:50:04
ICO vs. IPO
Let us first explain the meaning of "IPO".
An initial public offering, or "IPO", is essentially the first sale of shares by a private company to the public. IPOs are typically held by smaller, newer companies that are looking for capital to grow their business.
What is the main difference between ICO and IPO?
Strategy
The main strategy of ICOs is to raise funds for the project and enter the market, which is usually done by start-ups; In contrast, IPOs often take place at a time when a company is financially stable and intends to offer its shares to develop and raise more capital in the public market.
Documentation
When a company intends to launch its IPO, it must prepare a legal document called a prospectus. This document is a legal notice that contains key information about the company and the IPO and must comply with certain transparency standards. ICOs, on the other hand, are not limited by any legal documentation. ICOs have documentation in the form of a white paper that explains everything about the project and its purpose. But it is important to note that ICOs are not required to create a white paper, while IPOs must provide documentation to succeed in their business process.
Credit
When a company intends to divide its shares in an IPO, it must have a number of prerequisites, including a financial and income history approved by a professional accounting firm. But in the ICO process, companies are not required to follow a specific regulatory framework. Many ICOs have only one white paper, which is not required.
Running time
The initial public offering (IPO) is a lengthy process and may take up to 6 months due to the legal process. But the ICO process is much shorter, which depends entirely on the nature of the project. When a company issues a white paper and a smart contract, it can start selling large shares. It should be noted that the duration of the widespread sale of these stocks depends on the project and its difficulty and usually lasts up to 1 month.
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