An initial coin offering (ICO) is a fundraising method used by startups to raise capital for new cryptocurrency projects. In an ICO, a company sells a new digital token or coin to investors in exchange for established cryptocurrencies like Bitcoin or Ethereum. This process allows investors to support the project and potentially profit if the token's value increases after its launch. ICOs are similar to initial public offerings (IPOs) in the stock market, but they are less regulated. Investors should be cautious, as many ICOs can be risky, and some may turn out to be scams. Proper research is essential before participating in an ICO.