ICOs how do they work?

Hey guys

Ive noticed a recent influx in Initial coin offerings. I have even heard talk about small brick and mortar business, offering ICOs in order to get funding. Can anyone explain exactly how and ICO works? What controls the value of the coin after its been sold? For example a pizza place offers an ICO, the funding is received, now why is the coin initially offered worth anything at all? Will the pizza place put some of its profits into said coin? Or they just kinda hoping random people will continue to pump money into the coin. I dont understand how a crypto token that doesn't serve a technical/software problem is something anyone would want to invest in?
Am I Missing something? Also, transversely how can a "perfect" ICO be done so that its retains or gains value and also serves a purpose?