Thats more credible way of fund raising, investor dont need to fear about things like fake project, and scam. Exchange hold the responsibility to offer a good project to its traders also for caring their name. When it comes to investment, ieo have a big advantage to ICO, everyone can focus about if the project can do what ever it takes to stand in the market situation. The token will be for sure go to your designated wallet.
That will only work for the exchanges that have a reputation to lose, there are many exchanges that have a very bad reputation around the forum that are still operating and we know they selectively scam their customers, so if such an exchange promises that the project that is going to be traded in their platform is good you cannot really assume it is true because the seal of approval that comes from a scammer has no value at all.