Cryptocurrencies and entrepreneurial finance

This chapter explores how cryptocurrencies and the underlying blockchain technology affect entrepreneurship, by providing an overview on the initial coin offerings (ICO) phenomenon and outlining its advantages and risks. ICOs are a new form of fund-raising from the public that leverages the power of cryptocurrencies and the underling blockchain technology. One of the key features of an ICO is that it works on a distributed ledger technology or blockchain. This enables new ventures to expand their funding opportunities compared to traditional crowdfunding. By relying on blockchain technology, ICOs can reduce the friction in fund-raising, ease access to capital and thereby promote entrepreneurship and innovation. Future studies may investigate the effectiveness of ICOs in terms of their returns and successes after the offerings, as well as their consequent ability to foster entrepreneurship. Research on the role played by the human and social capital of the founders is also needed in explaining ICOs outcomes