Magnitogorsk, Russia is not exactly known as a venture capital hotspot, but that didn’t stop a zirconium manufacturer based there from successfully raising $7 million from 4,000 investors. All it took to raise the money necessary to start their (extremely specific) business was a thoughtful deployment of the initial coin offering. Perpetually shortened as “ICO,” an initial coin offering is a crowdfunding mechanism built on top of the blockchain, the same open-source software technology that powers Bitcoin, Ethereum, and other cryptocurrencies. Instead of conventional cryptocurrency, ICO investors buy “tokens” that represent partial ownership of a company’s cashflow. A token’s value…
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