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Contribution Details

Type Master's Thesis
Scope Discipline-based scholarship
Title Initial Coin Offering - An Analysis of Critical Success Factors and Strategies
Organization Unit
Authors
  • Lucas Roesli
Supervisors
  • Tim Glaus
  • Thorsten Hens
Language
  • English
Institution University of Zurich
Faculty Faculty of Business, Economics and Informatics
Number of Pages 94
Date 2018
Zusammenfassung With the introduction of Bitcoin in 2008, the crypto-currency’s underlaying technology, blockchain, has introduced a new technological era, namely the era of distributed ledger technology (DLT). Since then, innumerable new ventures, companies and foundations have been formed to develop the tech-nology further and discover new fields of application. As a result, many of these organisations applied a newly introduced form of business financing called an initial coin offering (ICO). This innovative financial vehicle allows businesses to fund early-stage projects by selling digital tokens to investors and contributors. The received funds are used to develop DLT-based networks in which the tokens will represent a certain value. In other words, ICOs allow organisations to self-fund a project by selling future access to a service or a product. Additionally, investors are incentivised by a supposed increase in the value of the token representing the company’s value. Initial coin offerings have experienced a real boom in recent months due to their simple and quick access to funding capital. On the other hand, investors are attracted by a new form of investment opportunity, which allows them to participate in early-stage ventures. Exorbitant short-term yields, enormous funding levels and a true boom make ICOs attractive to both ventures and investors equally (PwC (2018b)). However, the combination of a technology in its infancy, tremendous financial gain and fast access to enormous funds has created a distinct variation in project quality. Organisations differ in technical quality, maturity, governance as well as legal set-up. Investors drown in the flood of ICO projects and are exposed to extensive information asymmetry. They need clear guidance to assess the quality of ICO projects and form clear investment decisions. This master thesis aims to create a tool to assist investors by assessing DLT-based projects (Sehra, Smith and Gomes (2017)).
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