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This review synthesizes 48 academic studies on Initial Coin Offerings (ICOs) from 2018 to 2023, employing bibliometric and content analyses to illuminate their complexities and innovation in entrepreneurial finance. It identifies four key themes: (1) regulatory intricacies, market transformation, and strategic implications for emerging ventures; (2) the opportunities and challenges presented, and key factors influencing the success of ICOs; (3) ICOs and entrepreneurial finance; and finally, (4) review of reviews. By examining the intersection of legal frameworks, disruptive potential, and stakeholder challenges, this interdisciplinary perspective captures the essence of ICOs and charts a course for future inquiry. It serves as a pivotal reference for researchers, practitioners, and regulators to understand the multifaceted ICO landscape and its implications for the future of finance. [ABSTRACT FROM AUTHOR]

Initial coin offerings (ICO) have emerged as a niche financing arrangement, primarily used by budding tech-savvy entrepreneurs to fund their projects through token sales. This paper explores the various research dimensions on this complex means of raising funds, primarily its relevance, grey aspects, and offers future research directions. The theoretical underpinnings of various scholarly articles in reputed journals are reviewed to gauge the continuously expanding ICO domain. To recognize key aspects of ICO, this study relies on a three-tier analysis comprising of systematic literature review, bibliometric analysis and content analysis. The study identifies five distinct clusters: dynamics influencing ICO, drivers facilitating ICO investments, empirical validation of ICO success factors, adopting best practices for efficacious ICO and emerging perspectives on ICO. Based on these clusters, future research directions are offered. This study is a ready reckoner for scholars, aspiring to identify the evolution of ICO, current dynamics, and future research directions. This study not only offers existing and prospective entrepreneurs into efficiently designing and deploying ICO, but also highlights determinants that should be considered by investors while investing in ICO. Further, the study also illustrates several key challenges that requires adequate global regulation to ensure its sustainability and advancement. [ABSTRACT FROM AUTHOR]

This study reviews initial coin offerings (ICOs) based on 80 empirical studies from 2018 to 2022. We apply a blend of bibliometric and content analysis to consolidate ICOs' prior findings, track the evolutionary impact, and explore the semantic discourse and underlying theories in entrepreneurial finance. The content analysis concludes with five main streams that extensively explain the advent of ICOs, main features, embedded technologies, pricing, valuation, regulatory frameworks, frauds, and scams. It contributes to a better understanding of the ICOs hype under the following contexts: benefits versus challenges, decentralised system versus market stability, speculative behaviour and herding versus market efficiency, and geographical spread versus systematic risk. The study is beneficial for portfolio managers, hedgers, wealth managers, investors, policymakers, regulators, and entrepreneurs. Plain English Summary: ICO Boom and Bust: What is Next? The study fosters the knowledge of ICOs as a new financing avenue. It consolidates prior empirical studies and extracts valuable findings from different perspectives: benefits versus challenges, decentralised system versus market stability, speculative behaviour and herding versus market efficiency, and geographical spread versus systematic risk. This study reviews initial coin offerings (ICOs) based on 80 empirical studies from 2018 to 2022. It impacts portfolio managers, hedgers, wealth managers, investors, policymakers, regulators, and entrepreneurs. [ABSTRACT FROM AUTHOR]

This study furthers recent research on Initial Coin Offerings (ICO) in understanding the set of characteristics that drive ICO performance and reduce information asymmetry. Using data on 166 ICOs and more than 300,000 contribution addresses that sent funds to ICOs in Bitcoins or in Ether between 2013 and 2017, we examined the effect of ICO characteristics on ICO performance. We found that three boundary conditions predict ICO fundraising amount, number of investors, hard cap achievement and token ranking. These are registering ICO and publishing project's code on GitHub, obtaining VC or Business angel financing before the campaign or during presale, and finally, publishing the whitepaper before the campaign's start. Other factors such as serial investors, presale of tokens, bonus sales and funders' ownership share explain ICO performance. We offer implications for ICO investors and policymakers. [ABSTRACT FROM AUTHOR]

Artists make vital contributions to our society and lay the foundations for billion-dollar industries. However, these artists consistently struggle to acquire sufficient funding for their projects and their livelihood. New technology-supported possibilities for funding artists and their projects have emerged in recent years. Initial Coin Offering (ICO) is a novel form of reward-based tokenized crowdfunding. Although ICOs are promising as a way to fund artistic projects, they lack widespread adoption in the creative and cultural industry (CCI). Based on 35 qualitative in-depth interviews, we identify four barriers that hinder the funding of artistic projects through ICOs: legal shortcomings, investment restrictions, lack of consumer interest, and intermediaries' resistance. Our research contributes to cultural finance and funding literature by disclosing barriers that impede a promising form of financing artistic projects. Further, we outline possible solutions to overcome them. We also contribute to the research about ICOs by showing that rather than reducing investment risks, these offerings merely shift them. [ABSTRACT FROM AUTHOR]

With transformative evolution involving crypto-assets, machine learning applications and data-driven finance models, complex regulatory and policy issues are emerging. Inadequate frameworks in FinTech markets create regulatory friction and regulatory fragmentation. These limitations continue to feature when piecemeal regulatory transition occurs. The danger of EU Member States being left behind in the FinTech innovation race if the regulatory landscape is cumbersome or incomplete for new business models is real. Regulatory lag and regulatory friction also act as a 'disenabler' for ease of cross-border FinTech trade in the EU. This article critically engages with the manner in which the regulatory sandbox has rapidly gained critical mass in Member States as a valuable adaptive measure supporting a route to market for FinTech entrepreneurs. Against the backdrop of the European Commission's Digital Finance Strategy, the article further advances scholarship on FinTech in the EU by probing the EU's resulting regulatory dilemma, undertaking a systematic evaluation of the continuum of complex policy options available to the European Union in response to the spreading regulatory sandbox phenomenon. [ABSTRACT FROM AUTHOR]

This study is the first to provide systematic evidence regarding investor behaviour in initial coin offerings (ICOs), their investment patterns and their role in the success of campaigns. Using hand-collected data on 472 public token sales over the period of 2013–2017, we advance the ICO literature by demonstrating that some contributors often invest in more than one campaign, and such serial investors contribute earlier. However, they are not more informed and fail to pick better-quality ICOs. Only large serial investors invest more in campaigns that raise more funds, attract more contributors, are more likely to reach their hard caps, and distribute tokens that are listed on crypto exchange. Our findings raise the question of whether regulatory or industry self-regulation agreements on information provision measures are needed to protect smaller retail ICO investors that exhibit naïve reinforcement learning behaviour. [ABSTRACT FROM AUTHOR]

Initial coin offerings (ICOs) are a novel form of funding that has driven billions of dollars into the blockchain ecosystem, potentially challenging traditional funding vehicles such as business angel or venture capital investments. However, little is known of entrepreneurs' rationales for leveraging this emerging form of financing. This article investigates the economic and behavioral factors that motivate entrepreneurs to fund their startup operations with ICOs. By conducting in-depth interviews with C-level managers or founders of ICO-funded startups, our analysis reveals four dimensions that have an impact on the decision: (1) funding, (2) community building, (3) tokenomics, and (4) personal and ideological drivers. Our findings suggest that the entrepreneur's social identity in conjunction with the enabling mechanisms of the blockchain technology shape entrepreneurial pursuits and funding choice. We contribute to the literature on entrepreneurial finance by increasing understanding of ICOs and to the literature on entrepreneurial decision making by providing qualitative insights into the influence of founder identity on key decisions in startups such as financing. [ABSTRACT FROM AUTHOR]

A defining feature of initial coin offerings (ICOs) is that entrepreneurs bear the full marginal investment cost but profit only partially from the marginal investment payoff. This design may exacerbate agency conflicts inherent in corporate finance. As a consequence, signals of entrepreneurial quality such as CEO loyalty, which is an established concept in social psychology and can easily be linked to potential agency conflicts in corporate settings, might be a first-order determinant of economic outcomes in the ICO market. Consistent with this, I find that loyal CEOs have to offer lower financial incentives to attract investors and are still able to raise more proceeds, conduct ICOs more thoroughly, and are less likely to fail. The findings are consistent with the hypothesis that asymmetric information between entrepreneurs and investors entail agency costs that are decreasing in CEO loyalty. [ABSTRACT FROM AUTHOR]

Blockchain, a decentralized validation protocol in which no one individual entity completely controls the process or information, is labeled both a "techno tour de force" and a "fraud." Austrian School researchers view the blockchain application Bitcoin as an ideal example of currency decentralization while ethics scholars fret about this very lack of control. Given the significant importance of the future of blockchain technology to a range of disciplines and the fragmented knowledge base with little cross-disciplinary integration to fields such as computer science and law, we begin by offering a nontechnical explanation of the basics of blockchain and its applications such as smart contracts, cryptocurrencies, tokens, and initial coin offerings. We systematically review 152 articles in the burgeoning academic literature on blockchain and its applications and synthesize the findings from five parallel lines of enquiry for scholars: computer science, economics, entrepreneurship, and law and governance. Finally, we outline a comprehensive research agenda for scholars of regulation policy and governance, entrepreneurship and sustainability, organization design and theory, and consumer behavior, highlighting promising phenomenon, methodologies, data, and theories. We aim to simplify and explain blockchain for what it is—a valuable tool that is revolutionary, transformational, and critical for scholars to understand and investigate. [ABSTRACT FROM AUTHOR]

Initial coin offerings (ICOs) are a rapidly growing phenomenon wherein entrepreneurial ventures raise funds for the development of blockchain-based businesses. Although they have recently sprouted up all over the world, raising millions of dollars for early-stage firms, few empirical studies are available to help understand the emergence of ICOs across countries. Based on the population of 915 ICOs issued in 187 countries between January 2017 and March 2018, our study reveals that ICOs take place more frequently in countries with developed financial systems, public equity markets, and advanced digital technologies. The availability of investment-based crowdfunding platforms is also positively associated with the emergence of ICOs, while debt and private equity markets do not provide similar effects. Countries with ICO-friendly regulations have more ICOs, whereas tax regimes are not clearly related to ICOs. [ABSTRACT FROM AUTHOR]

Initial coin offerings are a new way for blockchain startups to finance project development by issuing coins or tokens in exchange for fiat money or Bitcoin or other cryptocurrencies. In this article, we start from the current distinction between different types of tokens and argue that it can create confusion and should be at least partially abandoned. We believe that the conceptual difference between a currency token and a tradable utility token is just the dimension of the crypto environment in which the token is spent. More specifically, 'utility tokens' combine the customer payment mechanism with the utility component and, when tradable on a secondary market, the investment one. We argue that they blur the traditional distinctions between currencies, financial assets and consumption goods. Moreover, we stress the increasing importance of online crypto exchanges. Recently some exchanges have also taken up the role of trusted intermediaries and staked their reputation on token offerings, which are termed initial exchange offerings and have gained in popularity. We therefore argue that the crypto market increasingly looks like a segment of the capital market and behaves as such. Given that tokens have a clear investment component, we show that they are tradable securities under the Prospectus Regulation. We compare the European securities regulation with its US counterpart and focus on prospectus exemptions, highlighting the great differences between Europe and the US which make Europe less amicable to blockchain startups. [ABSTRACT FROM AUTHOR]

It is generally agreed that gaps in sustainable and social finance should be met by increased marketization. However, there are significant challenges in galvanising the investment community used to conventional securities and other investment market instruments. Our article proposes using technological innovations in fund-raising, observed in the initial coin offerings (ICOs) market, to transform the asset class of sustainable and social finance in order to achieve greater marketization, creating an integrated form of social-commercial value for a variety of different investors, from conventional to crowdsourced marketplaces. Key to our proposal is the innovation of tokenisation introduced in ICOs. We argue that tokenisation holds transformative potential for restructuring investment opportunities, as assets need not be tied to the expectations and obligations of conventional financial value creation. Tokens can offer different classes of financial and non-financial rights and rewards. We propose that sustainable and social finance can be raised by corporate structures dedicated to sustainable or social purposes, as dual-class offerings. One class of tokens allows holders to commit to the sustainable or social ends and exercise governance rights as part of their investment. Such token-holders are also expected to be long-term investors and subject to lock-in periods, in order to support the ultimate fulfilment of the sustainable or social project. The other class of tokens would carry no governance rights but be immediately tradeable. This class of tokens likely attracts more transient investors but would provide an important source of finance for sustainable and social projects. The success of ICOs reflects the importance of market conditions and liquidity for this class of investors and we make some proposals as to how such markets can be made more robust by appropriate regulation. [ABSTRACT FROM AUTHOR]

As prior researchers have suggested, a firm's success in an international market depends on how well its strategy fits the nonmarket environment, such as formal institutions. This paper examines the determinants of formal institutions around new areas of economic activities. Specifically, we propose a framework for understanding how the quality of formal institutions in promoting entrepreneurship drives the focus of such institutions concerning initial coin offering (ICO), which is emerging as a popular fundraising method. The paper uses inductive analysis to examine how nonmarket factors-such as a jurisdiction's tax haven nature, regulators' perceptions of ICOs as threats to national or political interests, and trade and industry associations-might moderate the relationship between the quality of institutions and the focus of such institutions regarding ICOs. One of this study's key findings is that an economy's quality of entrepreneurship-related institutions, perceived threats to national/political interests, and tax haven nature lead to different policy orientations. Consequently, regulators assign different importance when promoting crypto-entrepreneurship and dealing with associated risks. Regulators focusing mainly on promoting crypto-ventures have taken measures to enrich the blockchain ecosystem and provided tax and non-tax incentives to attract such ventures. Regulators focusing mainly on dealing with crypto-venture risks rely on a regulatory sandbox and close regulatory monitoring of such ventures., Competing Interests: Competing interestsNone., (© The Author(s) 2023.)