Are ICOs the Future Of Fund Raising?

With credit institutions still reluctant to provide financing to start-ups, many companies are looking for new ways to raise funds. Others are exploring ways to integrate new technology such as Distributed Ledger Technology (DLT), Blockchain and SmartContracts into their existing business models. Either way, initial coin offerings (ICO) or initial token offerings (ITO) are currently trending.

Coins and tokens may serve various functions: They can be structured similar to equity (shares) or debt instruments (loans), they can serve as types of vouchers (utility tokens) or they can be "naked" tokens ("cryptocurrencies") striving  to become the "new" Bitcoin or Ether.

Depending on how coins or tokens are legally set-up, certain legal aspects need to be considered: