Basic ICO procedure

Let’s say that Alice wants to allow the AliceICO contract to sell 50% of all the AliceCoin tokens to buyers like Bob and Charlie.

First, Alice launches the AliceCoin ERC20 contract, issuing all the AliceCoin to her own address.

Then, Alice launches the AliceICO contract that can sell tokens for ether. Next, Alice initiates the approve & transferFrom workflow. She sends a transaction to the AliceCoin contract, calling approve with the address of the AliceICO contract and 50% of the totalSupply as arguments. This will trigger the Approval event. Now, the AliceICO contract can sell AliceCoin.

When the AliceICO contract receives ether from Bob, it needs to send some AliceCoin to Bob in return. Within the AliceICO contract is an exchange rate between AliceCoin and ether. The exchange rate that Alice set when she created the AliceICO contract determines how many tokens Bob will receive for the amount of ether sent to the AliceICO contract.

Mastering Ethereum: Building Smart Contracts and DApps por Andreas M. Antonopoulos, Gavin Wood Ph. D.
https://amzn.eu/5JtOwKQ