An Initial Exchange Offering (IEO) is similar to an ICO where coins or tokens are offered by companies for purchase as a way to fund the project development. Purchasers can exchange their currency (ETH, BTC, USD etc) for a specified amount of tokens.
However unlike ICOs where tokens are directly sold by the project, in an IEO relies on an exchange or a set of exchanges as the intermediary. Developers mint the project's tokens and send them to the exchanges. The exchanges will then sell the tokens to the purchasers against ETH, BTC etc. The conditions can be set similar to an ICO such as capping the number of tokens and having a safe price per token.
From the perspective of a contributor, instead of sending Ether to a Smart Contract governing the ICO, each IEO participant has to create an account with the exchange and send ETH to this account. When the IEO commences, the participant can purchase the token directly from the exchange