Dr Ruediger Fahlenbrach, Ecole Polytechnique Fédérale de Lausanne (EPFL)
We conduct a detailed analysis of investors in successful initial coin offerings (ICOs). The average ICO has 4,700 contributors. The median participant contributes small amounts and many investors sell their tokens before the underlying product is developed. Large pre-sale investors obtain tokens at a discount and flip part of their allocation shortly after the ICO. ICO contributors lack the protections traditionally afforded to investors in early-stage financing. Nevertheless, returns nine months after the ICO are positive on average, driven mostly by an increase in the value of the Ethereum cryptocurrency.
Ruediger Fahlenbrach is Swiss Finance Institute Professor at Ecole Polytechnique Fédérale de Lausanne (EPFL), Switzerland. Formerly on the faculty of the Fisher College of Business of the Ohio State University, he holds a PhD in Finance from the University of Pennsylvania (Wharton). He has research interests in empirical corporate finance, in particular, corporate governance. Ruediger has published in the leading academic journals in finance, including the Journal of Finance, the Journal of Financial Economics, and the Review of Financial Studies. He is Associate Editor of the Review of Finance and former Associate Editor of the Review of Financial Studies (2013-2016) and Financial Management (2012-2016). Ruediger currently serves a three-year term as Director of the European Finance Association. He is a research member of the European Corporate Governance Institute. His research has been reported in many large-circulation newspapers such as The New York Times, The Wall Street Journal, The Economist, and Fortune Magazine.