Initial Coin Offerings: Financing Growth with Cryptocurrency Token Sales
71 Pages Posted: 16 Jul 2018 Last revised: 14 Sep 2019
Date Written: September 3, 2019
Initial coin oﬀerings (ICOs) have emerged as a new mechanism for entrepreneurial ﬁnance, with parallels to initial public oﬀerings, venture capital, and pre-sale crowdfunding. In a sample of more than 1,500 ICOs that collectively raise $12.9 billion, we examine which issuer and ICO characteristics predict successful real outcomes (increasing issuer employment and avoiding enterprise failure). Success is associated with disclosure, credible commitment to the project, and quality signals. An instrumental variables analysis ﬁnds that ICO token exchange listing causes higher future employment, indicating that access to token liquidity has important real consequences for the enterprise.
Keywords: Initial coin offerings, Fintech, blockchain
JEL Classification: G24, G32, L26
Suggested Citation: Suggested Citation