Start-ups are raising money by issuing new cryptocurrenciesALAMY

Every enterprise needs funding to get off the ground. For start-ups dealing in the field of cryptocurrencies — viewed as risky by many traditional investors, given the intense volatility in the value of bitcoin — that seed funding can be hard to come by.

However, some are using their expertise to bypass the usual venture capital or private equity options. Hold on to your hat, because this gets complicated: they are raising money by issuing new cryptocurrencies in a process known as an initial coin offering (ICO). It is like an initial public offering — the sale of shares by a company to stock market investors — except investors in ICOs buy cryptocurrency coins issued by the company, rather than shares.

The practice is growing…