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Hi John
I am trying to understand the logic behind ICO’s and crowdfunding.
They are examinable per Syllabus B3(a) as part of sources of finance available to an organisation.
Is there somewhere where I can better grasp this topic. I read through Kaplan textbook but it is not very helpful unfortunately.
I am struggling to understand this topic and how does it work in practice, especially if it appears in an exam question and how could it be examined?
Thank you.
Although both are in the syllabus, if they are asked in the exam you would not be required to have more than a basic understanding of what they are – there cannot be any calculation questions on them.
With ICO’s investors pay in cryptocurrency rather than in cash, and instead of receiving shares they receive tokens (like a new cryptocurrency).
Crowdfunding is where someone has a new invention and they way they raise money to be able to produce the product is that they advertise what they are planning and get people to pay to buy the product in advance – they pay ‘now’ and then receive the product months later when they have been produced. Had instead they waiting to buy once it had been produced they would have to pay more. (Look at the website ‘kickstarter’ to see how it works – it is the most popular website used by businesses for crowdfunding).
If you want more then look them up on Google, but don’t spend too much time on it 🙂
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