Companies create a new virtual coin or token, which is then sold online to investors in the ICO, in exchange for cryptocurrency or fiat currency.
source https://www.google.com/url?rct=j&sa=t&url=http://www.inforum.com/news/government-and-politics/4505068-cryptocurrency-companies-issued-cease-and-desist-orders&ct=ga&cd=CAIyGmM2Nzk3ODA2ZWViNjVjODI6Y29tOmVuOlVT&usg=AFQjCNFR68_lGI9urXvEL9I46mMwV8RTyQ
