Anyone familiar with the nuances of an ICO?

[fumanchu808]

Im currently researching as both a journalist planning to write an article on ICOs and an entrepreneur interested in utilizing it to fund my company.

Has anyone heard of or encountered any ramifications of a crypto-equity, smart contract solution towards funding a business?

For example lets say we are currently in talks with early investors for 500k USD's worth of value. Are we allowed to simply create a smart contract (like on the NXT platform) for 500k units selling for 1 dollar a piece. In exchange my organization pledges 50% of net revenue will be evenly distributed among all smart contract holders. We're not selling equity in the company mind you, simply forming an agreement that part of our business practices will be to always distribute revenue into these smart tokens.


Smooth sailing or should I be working on my prison slang?

[wasserman99]

An ICO is short for Initial Coin Offering. What happens is that the creator of an altcoin will "premine" (have the block reward for the 1st block be, say 100k coins while the subsequent blocks will have a reward of 25 coins) and sell those coins to the public. I don't think smart contracts are usually used for this but rather some trusted member or a trusted exchange would act as escrow.

I think the point/goal of an ICO is to get more people to own and use the altcoin, potentially increasing the chances of the coins overall success.

[Verse]

In exchange my organization pledges 50% of net revenue will be evenly distributed among all smart contract holders.

Do you mean net profit?

BitShares might be worth looking into. If you figure out what to use, let us know. I'm sure there are more people interested in a crypto-IPO.

[hf100]

............ or should I be working on my prison slang?

I think the US SEC might consider ICOs as selling unlicensed securities, so you might risk prosecution if you are a US citizen or sell to US citizens.

[WillowRosenberg]

............ or should I be working on my prison slang?

I think the US SEC might consider ICOs as selling unlicensed securities, so you might risk prosecution if you are a US citizen or sell to US citizens.

I'm pretty sure that in almost every country with a stock exchange that there are laws about selling unlicensed securities, e.g.

Japan - http://www.whitecase.com/alerts-06292011/#.VBYD9fmSxtg