Initial Coin Offering


An Initial Coin Offering (ICO) serves companies, as an innovative financing mechanism using blockchain technology.

 

The term is based on the concept of an initial public offering (IPO), in which company’s shares are acquired by investors and subsequently traded on a stock exchange. In the case of an ICO, the company offers digital units (Tokens) during sale phases for a limited period of time to investors in exchange for another virtual currency or legal tender.

This token may be connected with the right to receive a service, a product, a license, a dividend, a voting right or a property right.

 

ICO: Feasible in different business phases - VC; Company issues tokens (or shares) - IPO; Everyone can invest - Crowd-funding

 


 

How are token sales usually structured?

 

ICO Tokens


 

What are the benefits of token sales?

 

IPO and ICO

Blockchain technology which powers these transactions makes investing faster, cheaper and more secure. It liquefies assets and makes investing possible for people who have been restricted by means or geography.

Other benefits of token sales are:

  • Raise funds quickly, entry to market
  • Increase brand awareness
  • New growth and valuation potential
  • Creating of completely new business models
  • Trust enablement
  • Neutral: No need to change legal form into AG

 

 

What effects the markets?

EY ICO Sentiment Radar

 

Potential Impact

  • Sudden regulations can impact the ICO
  • Technological advancements such as scaling open new possibilities
  • ICO‘s are usually more profitable during a bull market
  • Prepare early to complete the ICO quickly in a narrow timeframe
  • Remaining flexible in timing and pricing

ICO Sentiment Radar


 

We lead you in the right direction

 

Due to the nature of fundraising by leveraging blockchain technology it is a modern method for startups and companies of every maturity. Even financing of smaller projects in a company token sales can be leveraged. Depending on the current situation of the company, there are different ways to start an ICO. We help with assessing the current infrastructure using ICO diagnostics to get a picture of different work streams and gaps, which need to be filled in order to reach ICO-ready target status.

current situation of the company


 

Challenges from your current perspective

Life (and burdens) of an ICO.

 

  • Meeting all regulatory requirements necessary to raise funds in relevant jurisdictions
  • Creating an investor friendly ICO infrastructure pleasing the majority of potential customers
  • Providing a safe ICO environment following the best cyber security practices
  • Making yourself noticeable in a competitive ICO environment by engaging the community, quality content marketing and creating „hype“
  • Developing a proof of concept that is applicable to distributed ledger technology
  • Establish credibility by sticking to the roadmap and keeping promises to investors and customers

Life of an ICO


 

How can EY help?

 

  • ICO Journey: We oversee the entire ICO process and are aware of the responsibility of project management
  • Strategy: Discuss strategic funding considerations and a possible ICO best case
  • Workshops: Analyze gaps of current infrastructure using ICO diagnostics to get the ICO-ready target status
  • Operational analysis: We analyze the progress of the parties who are involved throughout the entire project and try to constantly optimize it
  • Standard EY services in Advisory, Legal, Tax, Transactions, Accounting & Assurance

 


 

Contact us

 

Alessandro Englmann
FAAS Manager

Phone: +49 30 25471 26502
Mobile: +49 160 939 26502
Alessandro.Englmann@de.ey.com

Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft

Friedrichstraße 140
10117 Berlin
Germany

Adrian Wons
ICO & Blockchain Expert

Phone: +49 30 25471 29107
Mobile: +49 160 939 29107
Adrian.Wons@de.ey.com

Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft

Friedrichstraße 140
10117 Berlin
Germany

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