ICO vs IPO vs IEO vs STO - Understanding At-the-market (ATM) Offerings

In marketing, an offering is a total offer to the customers and it is more than the product itself. 
An offering includes elements that represent additional value to the customers such as availability, quality of service, proper delivery and technical support. 
There are 4 types of consumer products, including convenience, specialty, shopping, and unsought. 
One of the most important ways to raise capital is an at-the-market offering. 
In this article, we will let you know different types of offerings related to the stock market, cryptocurrencies and securities such as Initial Coin Offering, Initial Public Offering, Initial Exchange Offering, and Security Token Offering. Let's start!

Initial Coin Offering (ICO) vs Initial Public Offering (IPO) vs Initial Exchange Offering (IEO) vs Security Token Offering (STO) -Understanding At-the-Market Offerings 

ICO vs IPO vs IEO vs STO  - Understanding At-the-Market Offerings 

Understanding At-the-Market Offerings 

The offerings are the issuance or sale of a security by the company when the company's shares are made available for purchase but they can also be used in the context of bond issuance. 
Typically, a company will offer shares or bonds to the public in an attempt to increase capital to invest in development or growth.

There are many ways in which companies can try to increase capital in the face of capital and liquidity resource constraints. One such approach is an at-the-market offering.

At-the-market (ATM) offering is a type of shelf-based registered offering which provides some publicly traded companies with an effective way to increase the measured capital amount over time.

 In an ATM offering, Companies listed on the Stock Exchange gradually sell newly issued stocks and shares in the secondary trading market through a particular broker at prevailing market rates. 
The brokers sell a trader's shares on the open market and receive cashback from the transaction. 
Then they deliver the proceeds to the issuing company where the cash can be used for multiple purposes. 

A higher share price means that you can raise more money. For ATM offerings, different brokers use different names, such as “controlled equity offerings,“ "equity distribution programs,” dribble out equity programs,” but the main features of most of these programs are usually the same.

Remember that there are instances of companies who offer shares, stocks or bonds due to liquidity problems so investors should be careful of any such offerings.

What is Initial Coin Offering (ICO)?

Initial Coin Offering, known as ICO, is the stage of raising funds to finance the start of a blockchain-based project in its infancy. 

In detail, ICO is an online campaign by companies to fund their project ideas in alternative cryptocurrencies for major currencies. 
The investments are collected in the main or most popular cryptocurrencies which are often Bitcoin or ETH or even in dollars, euros and local currencies.

Read more: How do Initial Coin Offering (ICO) Tokens Work?

What is Initial Public Offering (IPO)?

Initial Public Offering (IPO) or stock market launch is a well-established process in order to expand and become publicly traded. 
In IPO, shares of a company are sold to institutional investors or retail investors, with the goal of collecting funds for development. 

IPO refers to the process of offering a private company shares to the public in issuing new shares. 
The issuance of public shares allows the company to increase capital from public investors.

What is Initial Exchange Offering (IEO)?

Initial Exchange Offering (IEO) is the process of selling the token or currency of a project for funding on a cryptocurrency exchange that supports the funding model via the IEO.

Initial Exchange Offering is completed through the token sales that are directly across different cryptocurrency exchange platforms depending on how they are planned.

Stock exchanges are creating a platform like Binance where a group of developers can develop and sell the project codes to partners, crypto enthusiasts, and investors in cryptographic projects.

The exchange platform will conduct a comprehensive project review using certain conditions to ensure that the project is real.

What is Security Token Offerings (STO)?

Initial Currency Offering (ICO) + Legal Compliance = Security Token Offering

STO is a process similar to an ICO where an investor exchanges currency for tokens or coins representing their investment.

In simple words,, Security is an economic tool that actually represents an asset. Stocks, bonds and managed property funds are examples of securities. 
Traditionally, when Security is purchased, the process is done in an old fashion, on paper. 

The Security Token Offering (STO) works on the same functionality; the difference is that it assures ownership through blockchain transactions.

Security tokens provide a number of financial rights to investors such as equity, dividends, income shares, vote selection, and access to many other investment mechanisms.

STO is more open to the security tokens compared to non-security tokens. Greater security protects investors from more volatile symbols. 
However, the basic problem in initial coin offering lies in the divergence of interests between the token holders and the token users.

Crypto ICO vs. Stock IPO

Since many cryptocurrency traders have already traded in the stock market, the activity of Initial coin offering (ICO) for cryptocurrencies will be simply compared to the activity of Initial public offering (IPO) in the stock market to illustrate the image, approximate the idea and display ICO and IPO information.

The phase of Initial Public Offering (IPO) in the stock market is the stage of the company's announcement of its incorporation, its growth plans and the offering of its shares to provide financing start of the company's activities.

If you have some money and you want to invest, you can go with Initial Public Offering (IPO) based company and you can start young startups with ICO.

Initial Coin Offering (ICO) vs Initial Public Offering (IPO): Key Differences

Many people think that IOC and IPC are completely similar, but there are many differences between them.

⇛Initial coin offering (ICO) offers the buyer a digital currency (Token) while Initial public offering (IPO) offers the buyer shares.

⇛ICO gives the buyer a percentage of the capital without any right to manage whatever that percentage while IPO gives the buyer the right to representation within the board of directors according to the proportion of shares and after exceeding a certain limit.

⇛Anyone can participate in the ICO  funding system and buy with very simple capital and without limits or conditions, while IPO is largely limited to businessmen and institutions to raise capital with the lowest number of buyers to facilitate participation in management.

⇛It is possible to participate in ICO funding system from anywhere, regardless of where the buyer is and where the project is established while IPO requires the presence and registration within the scope of the offering of shares and identifies some nationalities or persons registered in specific stock exchanges.

⇛ICO procedures are very simple and often electronic, allowing capital to be accumulated in less time while IPO procedures are very frequently and often paper-based and require considerable effort and a long time.

⇛ICO allows the sale of its currencies as soon as they start trading on the cryptocurrency trading platform, while IPO often puts restrictions on the sale of shareholders' shares at the beginning of the public offering, it prevents the sale of IPO shares before 6 months to 5 years in some cases.

⇛From this simple comparison shows the flexibility, simplicity, and speed in raising the capital required for a digital project through  ICO, which is appropriate to the nature of these projects that deal directly with modern technology and provide applications required in various aspects of life.

The Basic Difference between IEO and ICO

The key difference between Initial Exchange Offering and Initial Coin Offering is that the project code listed and supported on IEO is traded immediately without waiting as it happens with ICO. If you ask ICO traders and investors, they will tell you that this is the worst of the ICO.

Another difference is that ICO can attract investments from all over the world without any restrictions, while IEO can be organized by stock trading platforms that can actively participate in the fund-raising process, making the IEO and the cryptocurrency field more promising.

IEO provides an intermediary for the decentralized fundraising model, which gives crypto traders a strong sense of confidence while participating in IEO. While the model of raising money for ICO projects abound in monument and tricks.

ICO projects determine the value of tokens sold, they dispose of unsold tokens once the funding period is complete. In the case of IEO, exchange platforms generate tokens and send them to the user's portfolio of the exchange platform.

The Key Difference between IEO and STO

IEO is in contrast to STOs where the project team conducts the fundraising. The exchanges provide IEO through many launchpads and allow users to buy tokens directly with the money stored in their exchange wallet.

Initial Exchange Offering (IEO) represents a fundraising event overseen by a cryptocurrency exchange. 
Security Token Offering (STO) represents a smart investment contract supported by an underlying investment asset, e.g. funds, stocks, real estate investment trusts and even bonds.

STO owns the investment product information entered on the blockchain. It can be seen as a hybrid approach to ICO cryptocurrencies and traditional IPOs because there is an overlap between these fundraising methods.

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