ICO

In a nutshell, projects launch an ICO by issuing crypto-tokens on the blockchain (usually the Bitcoin or the Ethereum blockchain), giving early investors the chance to acquire tokens in exchange for cryptocurrency.

ICOs are usually limited by time or a cap on the amount of funds raised. The value and number of tokens released can be static or calculated based on the amount of funds raised.

Crypto-tokens have become an easy way for blockchain startups to fund their projects early in the development cycle, and for regular users and enthusiasts to invest in projects of potential value and have a say on how their future is shaped.

The legal classification of ICOs and crypto-tokens remains murky and a point of contention. They borrow traits from both IPOs and traditional crowdfunding (e.g. Kickstarter, Indiegogo), while at the same time they bear enough difference to avoid fitting into any of those categories.

They do not account as donations because they give crypto–token purchasers a stake in the company and a right to vote on future decisions. Neither can they be called the cryptocurrency equivalent of stocks.

(https://techcrunch.com/2017/02/12/can-you-trust-crypto-token-crowdfunding/)