An IEO (Initial Exchange Offering) is basically one of the modalities that companies use to issue tokens and raise capital, the novelty of this system (unlike others that were being handled such as ICOs) is that it uses exchanges that already they exist in the market and that their management is more transparent. Next, we will know some of its main features:

Offers are made in exchanges that already exist

The company that wants to raise capital does not sell its tokens in the market without any association, but does so through an “Exchange” where crypto assets are traded, which acts as a “filter” on the projects that are going to launch, which generates more confidence in potential investors (they are already certain that the projects have gone through certain validations and quality standards).

When the project is endorsed by the Exchange you can immediately bid

Once a project has passed all validations and the Exchange has placed it on its list of eligible projects, investors can start buying their tokens immediately, without having to go through additional processes. It is always expected that these investments will be successful and that the projects can generate dividends to their investors in the medium term.

Sales are open to anyone in the world

Some initial offers to raise funds for new projects restrict some nationalities or countries, however, IEOs do not have this type of restriction, allowing people from anywhere in the world to become shareholders of the project being launched.

They do not have some ICO restrictions

The IEOs were created in order to be the “exchanges” who were responsible for the validation and all the security protocols required by investors when putting their money into a project. In many cases the ICOs have great restrictions for the presentation of projects with respect to countries, tax regulations, types of projects and issuance of shares, on the other hand, the IEOs leave all this work in the hands of the “Exchange” which is responsible for of all these aspects in a more effective and transparent way.

It is the Exchange that brings the liquidity of the tokens

In the IEO, it is not necessary to wait for a token to “grow” and have sufficient liquidity in the market to start obtaining dividends or to be able to start making transactions with it because being backed by a recognized Exchange, it will be contributing liquidity to tokens that allow them to be operational almost immediately.

Your projects are generally viable

Not all projects that enter the ICOs are viable or feasible, in some cases they are not even innovative. In the case of the IEO, having passed certain validations by the Exchanges, there is a greater guarantee that they are projects that are really going to be carried out, that solve a specific problem or that are innovative, which increases their chances of success.

They have a great technological team

When you have a financial technology project, it is not just about having a good manager or CEO who manages to capitalize on the ideas when carrying out the real (or tangible) part of the project (which is the realization of the platform), It is also important to have a team of committed and experienced professionals who can make their ideas come true and, above all, that these are compatible with blockchain technology, these professionals in the technological area are evaluated by the exchanges to approve the project before launch it on your platform to ensure that they are really qualified.

What do you think about this topic? Do you know any other feature of the IEO?

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