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New Forms of Funding Investment Projects and Companies: Crowdfunding and ICO (Nowe formy finansowania projektow inwestycyjnych i przedsiebiorstw: crowdfunding i ICO)

Author

Listed:
  • Jakub Gorka

    (University of Warsaw, Faculty of Management, Chair of Financial Systems, Banking and Money Markets Department,)

  • Aleksandra Pietruk

    (University of Warsaw, Faculty of Management, Chair of Financial Systems, Banking and Money Markets Department)

Abstract

The article aims to study crowdfunding and Initial Coin Offering (ICO) – the new sources of raising capital for investment projects and business operations. Crowdfunding and ICO are compared to the Initial Public Offering (IPO), i.e. a traditional form of funding for corporations. The paper discusses new trends in finance. It explores the principles, features, legal regulations, advantages and disadvantages of innovative methods of funding. The analysis reveals that in the digital era of network economy there is a need to quickly raise considerable amounts of capital from many investors in funding rounds not burdened with complicated regulations. ICO and crowdfunding give such an opportunity, but at the expense of higher legal, financial and operational risks. Therefore, for mature companies, a less risky option is to get funded in a more traditional way, for example through an initial public offering which, although costlier and lengthy, has higher credibility and is under prudential supervision.

Suggested Citation

  • Jakub Gorka & Aleksandra Pietruk, 2018. "New Forms of Funding Investment Projects and Companies: Crowdfunding and ICO (Nowe formy finansowania projektow inwestycyjnych i przedsiebiorstw: crowdfunding i ICO)," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 16(76), pages 116-137.
    • Handle: RePEc:sgm:pzwzuw:v:16:i:76:y:2018:p:116-137
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    More about this item

    Keywords

    crowdfunding; ICO (Initial Coin Offering); new forms of funding; IPO;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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