Initial Coin Offerings: Financing Growth with Cryptocurrency Token Sales
By Sabrina T. Howell, Marina Niessner, David Yermack. The Review of financial studies, 2018
562 citations recorded by the source corpus.
Initial coin offerings (ICOs) have emerged as a new mechanism for entrepreneurial finance, with parallels to initial public offerings, venture capital, and presale crowdfunding. In a sample of more than 1,500 ICOs that collectively raise ${\$}$12.9 billion, we examine which issuer and ICO characteristics predict successful real outcomes (increasing issuer employment and avoiding enterprise failure). Success is associated with disclosure, credible commitment to the project, and quality signals. An instrumental variables analysis finds that ICO token exchange listing causes higher future employment, indicating that access to token liquidity has important real consequences for the enterprise. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.
Subfields: Accounting, Information Systems, Management Information Systems
View Paper: https://www.semanticscholar.org/paper/bf3af693770302692f1c457b6979e02d0c1f94e2
How researchers see this paper
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In Accounting
- Paul P. Momtaz
- Tom Vanacker
- Lars Hornuf
- Silvio Vismara
- Joern H. Block
- David Gabauer
- Ioannis Chatziantoniou
- Nikolaos Antonakakis
In Information Systems
- Paul P. Momtaz
- David Gabauer
- Ioannis Chatziantoniou
- Silvio Vismara
- Nikolaos Antonakakis
- Joern H. Block
- Lars Hornuf
In Management Information Systems
- Tom Vanacker
- Paul P. Momtaz
- Lars Hornuf
- Joern H. Block
- Silvio Vismara
- David Gabauer
- Ioannis Chatziantoniou
- Nikolaos Antonakakis
Citations in the corpus
- Entrepreneurial Finance and Moral Hazard: Evidence from Token Offerings (2020, methodology): “Token offerings or Initial Coin Offerings (ICOs) are smart contracts programmed on distributed ledger technology (DLT), which are designed to raise external finance without the need for an intermediary by issuing tokens or coins that can be publicly traded.1 The main innovations of token offerings a”
- Cryptocurrency market contagion: Market uncertainty, market complexity, and dynamic portfolios (2019, background): “To be more explicit, according to authors such as Howell et al. (2018) the most common way for prospective venture capitalists in the cryptocurrency market to pay for the tokens they wish to purchase during an ICO is to make use of ether (i.e., Ethereums coin).”
- The entrepreneurial finance markets of the future: a comparison of crowdfunding and initial coin offerings (2020, background): “With the exceptions of Fisch and Momtaz (2019) as well as Howell et al. (2018), we know little how ICOs influence real business outcomes.”