An Initial Coin Offering is somewhat similar to an IPO in the non-crypto world. However, startups issue their own token in exchange for ether. This is essentially crowdfunding on the Ethereum platform. It is an unregulated means by which a cryptocurrency venture, typically in its early stage, can raise money from supporters by issuing tokens. It is often referred to as a crowdsale as ICO participants may potentially earn a return on their investments (as opposed to crowdfunding, where supporters donate money to a project or cause).
Ethereum is currently the most popular platform for launching ICOs. ICOs are a relatively new phenomenon but have quickly become a dominant topic of discussion within the blockchain community. Many view ICO projects as unregulated securities that allow founders to raise an unjustified amount of capital, while others argue that it is an innovation in the traditional venture-funding model.