Initial Coin Offerings: Financing Growth with Cryptocurrency Token Sales

Please join us for the IFSA Distinguished Speaker Series with Dr. David Yermack, Albert Fingerhut Professor of Finance and Business Transformation and Chairman of the Finance Department, Stern School of Business, New York University

Abstract:

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 success, measured using real outcomes (employment and issuer failure) and financial outcomes (token liquidity and volume). 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 liquidity has important real consequences for the enterprise.

Bio:

David Yermack is the Albert Fingerhut Professor of Finance and Business Transformation and Chairman of the Finance Department at New York University’s Stern School of Business, where he has been a member of the faculty since 1994.  He is also an Adjunct Professor of Law at the NYU School of Law, Director of the NYU Pollack Center for Law and Business, and a Research Associate of the NBER Law and Economics program.  In 2014 Prof. Yermack began teaching a full semester course at NYU on Digital Currency and Blockchains with his Law School colleague Prof. Geoffrey Miller.  The course was the first in the world on this topic taught at a major research university, and it now draws more than 200 students annually.  NYU Stern launched a FinTech MBA specialization in 2016, and this program will offer more than 12 FinTech courses in an interdisciplinary joint venture between its Finance and Information Systems departments this year.  Prof. Yermack has presented his FinTech research at numerous international universities and regulatory bodies including the United Nations, Bank for International Settlements, OECD, U.S. Treasury, U.S. Securities and Exchange Commission, Inter-American Development Bank, World Bank, and the U.S. Public Company Accounting Oversight Board.