An IEO is the process of digital asset (e.g. coins or tokens) procurement through an established exchange for the purpose of raising capital for start-up companies.
[1] Exchanges act as a middleman between investors and the startup, profiting from fees generated by services rendered during the due diligence process and funding phase.
IEO's are a vastly more secure method of investment procurement for startups, but it comes at the cost of fees paid to the exchange for their time analyzing the business and a predetermined percentage of the capital raised.
This saves the exchange from damaging their reputation and insures the business is following the global legal requirements such as Anti-Money Laundering Act for cryptocurrency sales.
During the boom of 2017-2018, ICOs on Ethereum were held daily, resulting in many projects raising millions of dollars, although there were also many dubious and fraudulent offerings on the market.
Anyone with a little knowledge of smart contracts and web development skills can create a spectacular website with a promising plan of action and start raising money.