To read the full version of this content please select one of the options below:

ICOs, the next generation of IPOs

Mohammad Hashemi Joo (Department of Finance, Florida International University, Miami, Florida, USA)
Yuka Nishikawa (Department of Finance, Florida International University, Miami, Florida, USA)
Krishnan Dandapani (Department of Finance, Florida International University, Miami, Florida, USA)

Managerial Finance

ISSN: 0307-4358

Article publication date: 19 July 2019

Issue publication date: 29 August 2020



The purpose of this paper is to recognize the benefits of the initial coin offering (ICO) as a way of raising funds and to present a detailed comparison between the ICO and the initial public offering to realize the future possibilities that this new funding method holds.


It is an exhaustive review of the ICO, the mechanism of crowdfunding, the blockchain technology behind it, benefits and current shortcomings of the ICO, and the potential future development of the ICO as a convenient and efficient way of raising capital.


ICOs have brought billions of dollars of funding to startups and projects worldwide in less than two years. Concurrently, many successful ICOs yielded extremely high returns to investors and believers of this new way of funding businesses.

Research limitations/implications

While the ICO is a revolutionary vehicle for business funding, it has raised concerns among users as well as potential investors about its risk and lack of regulation. The future of this innovative funding method highly depends on further development and placement of appropriate regulatory supervision, better understanding of risk and benefits and attaining the confidence of users.


This is a review of the advantages and drawbacks of the ICO. If the current fraud, market and cybersecurity risks can be mitigated and standardized regulations are developed, the ICO has a future to become an established way of capital funding or even replace the existing options, regardless of the size and age of companies.



Hashemi Joo, M., Nishikawa, Y. and Dandapani, K. (2020), "ICOs, the next generation of IPOs", Managerial Finance, Vol. 46 No. 6, pp. 761-783.



Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited