AQR Capital Management
Greenwich, CT 06830
Institutional Affiliation: AQR Capital Management
NBER Working Papers and Publications
|June 2018||Initial Coin Offerings: Financing Growth with Cryptocurrency Token Sales|
with Sabrina T. Howell, David Yermack: w24774
Initial coin offerings (ICOs) have emerged as a new mechanism for entrepreneurial finance, with parallels to initial public offerings, venture capital, and pre-sale crowdfunding. In a sample of more than 1,500 ICOs that collectively raise $12.9 billion, we examine which issuer and ICO characteristics predict successful real outcomes (increasing issuer employment and avoiding enterprise failure). Success is associated with disclosure, credible commitment to the project, and quality signals. An instrumental variables analysis finds that ICO token exchange listing causes higher future employment, indicating that access to token liquidity has important real consequences for the enterprise.