What is an ICO (Initial Coin Offering)?

Could you elaborate on the concept of an Initial Coin Offering (ICO)? As a financial practitioner specializing in the cryptocurrency space, I'm curious to understand its intricacies. In simple terms, how does an ICO work? What is the purpose of issuing coins or tokens in this manner? Are there any risks associated with investing in an ICO? Furthermore, how does an ICO differ from traditional fundraising methods like IPOs? I'm particularly interested in understanding the process from the perspective of both the issuer and the investor.