All I hear about these days are ICOs. Especially with FileCoin raising 200 million in one hour a few weeks back (the Internet hasn't seen that much crowdfunding since the Potato Salad Kickstarter).

But what's the hype about?

An ICO is defined as "Initial Coin Offering." Here's how to describe it: Crowdfunding on top of a blockchain using units of digital currency, like Bitcoin.

Rather than issuing equity or shares, investors buy tokens. It sounds like a video game, and part of it is--you can use your tokens later in the company's app or service. The SEC is there to regulate the process, so it's more legit than a pinball machine that eats your coin.

ICOs basically allow founders to cut through the typical venture capital fundraising song and dance (on which I have an opinion or two). There's no lengthy pitch process, there's no pitting investors against each other.

The cost of entry is typically lower and companies are inviting hundreds, if not thousands, of people to help fund it. That means investors can buy into equity deals they might not otherwise have access to.

For founders, an ICO is particularly compelling because it also enables a business to raise money without being debt strapped or diluting the ownership of executives, employees, and past investors. Instead, they have thousands of people counting on them to make this business a success.

That's not to suggest that ICO fundraising is simple. You probably need to have a PhD just to figure it out--like Rob MacInnis at AetherWorks, who is getting ready to open up the first SEC-compliant ICO in New York for ActiveAether. "The demand is there from U.S. investors looking to participate in the companies that are leveraging the global scale of blockchain technology," MacInnis recently told me.

I, too, was trying to make sense of it all when I sat down with some venture capitalists at a Wild West of ICO dinner (yes, that was a real thing) and asked for their two (bit)cents. Bottom line: The entire venture community is still trying to figure it out.

"One percent of ICOs can be groundbreaking, the ones building fundamental layers of a distributed universe, like storage," says Ed Sim, founder and managing partner of BOLDstart VC. Still, in Sim's opinion, the regulation is coming.

What I like about an ICO is that it puts a lot of the power back in the hands of the founder. If you can navigate through the complexities of the crypto world, ICOs are another viable fundraising source. It may even put pressure on the venture capital community to rethink some of the practices that are common -- but shouldn't be.

But don't do it just to raise money fast--you will have to consider how this will impact your business model to monetize your product (i.e the tokens). The environment is quickly changing, so surround yourself with experts.