What Determines Success in Initial Coin Offerings?

31 Pages Posted: 8 Oct 2018

See all articles by Abe de Jong

Abe de Jong

Rotterdam School of Management, Erasmus University; Monash University

Peter Roosenboom

Rotterdam School of Management, Erasmus University; Erasmus Research Institute of Management (ERIM)

Tom van der Kolk

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Date Written: September 15, 2018

Abstract

In this paper, we analyse the determinants of success for 630 ICOs performed between August 2015 and December 2017. We find evidence that ICOs are more successful in raising funding when they disclose more information to investors (i.e. have higher transparency rating), have a higher quality rating by cryptocurrency experts, organise a presale, have a pre-ICO GitHub repository, refrain from offering bonus schemes, have shorter planned token sale durations and have a larger project team. Depending on the measure used, these ICOs also have improved ex-post performance. We conclude that for entrepreneurs it is important to make the ICO as transparent as possible and that expert ratings are a valuable means to overcome the information asymmetry problems associated with token sales.

Keywords: Initial Coin Offerings, Token Sales, Entrepreneurial Finance

JEL Classification: G24, G32

Suggested Citation

de Jong, Abe and Roosenboom, Peter and van der Kolk, Tom, What Determines Success in Initial Coin Offerings? (September 15, 2018). Available at SSRN: https://ssrn.com/abstract=3250035 or http://dx.doi.org/10.2139/ssrn.3250035

Abe De Jong

Rotterdam School of Management, Erasmus University ( email )

P.O. Box 1738
Room T08-25
Rotterdam, 3000 DR
Netherlands
+31 10 408 1022 (Phone)

HOME PAGE: http://https://www.rsm.nl/people/abe-de-jong/

Monash University ( email )

900 Dandenong Rd
Room H3-56
Caulfield East, Victoria 3145
Australia

HOME PAGE: http://https://research.monash.edu/en/persons/abe-de-jong

Peter Roosenboom (Contact Author)

Rotterdam School of Management, Erasmus University ( email )

P.O. Box 1738
Room T09-56
3000 DR Rotterdam
Netherlands
+31 10 40 82255 (Phone)

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Tom Van der Kolk

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

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