The ІCO as an Instrument for Financing Ukrainian Startups

Abstract

The article considers features of financing of national sector of startups and, in particular, ІCO. The factors of development of ІCO investment are identified. A comparative analysis of alternative sources of financing of startups, such as ІCO, ІPO and crowdfunding, is carried out. The advantages and limitations of ІCO financing for developers of startups and investors are determined. Tendencies of development of ІCO financing both world-wide and in Ukraine are identified. It is determined that in recent years the total volume of financing of national startups shows steady growth. If in 2010–2016 the main source of financing was venture capital, then in 2017 there was a differentiation of sources of financing for venture capital, private capital and ICO. In this case, in terms of volume, the ICO investments came to the second place after the venture capital. In addition, Ukraine, at the State level, makes the first steps to legalize the market of cryptocurrencies and blockchain technology. Developing of an appropriate legislative framework can be a significant impetus for the growth of ICO investments.

Keywords

• startup
• ІCO-financing
• venture capital
• IPO
• crowdfunding