The quest for ICO: Identifying and prioritising the factors influencing initial coin offering selection

Abstract

Initial coin offerings (ICOs) have emerged as a niche source of entrepreneurial financing and a novel investment option that has appealed to investors. The present study aims to identify and prioritise factors that attract investors in the ICO selection process, thus providing valuable insights in improving their decision‐making process. To examine this objective, data were collected from respondents of four continents who had invested in ICO. The fuzzy analytical hierarchy process was applied to prioritise the factors inducing the decision‐making process of the respondents. Ideological factors, white paper, return expectations and behavioural factors emerged as the top four factors, respectively, that influenced the selection process. In contrast, technological factors appeared to be the least significant factor driving the selection process. This is the first kind of research that deals with the identification and prioritisation of factors and sub‐factors regarding the ICO selection decision‐making. The study will be of huge relevance to investors as it will offer them better clarity regarding the spectrum of factors and sub‐factors that impact their ICO selection process and simultaneously extend guidelines that will help them invest more rationally and strategically. The study will also ensure that issuers devise and design their ICO effectively to draw investors eventually leading to its success. Consequently, the study will serve the policymakers to establish a framework to enhance investors’ protection from any unscrupulous practices.