Thanks for the answer. However, most white papers that I've come across don't explicitly mention whether or when the proceeds are converted to FIAT, but they do mention how these funds will be utilised for development, marketing etc. Seeing Ether at ~1250$ these days, many teams have started to cut down their Ether targets proposed initially (when Ether was <500$). With this in mind, I do feel that many of them would have to convert a portion of the Ether raised immediately into FIAT to mitigate the risk.
Yes, they do, in order to hedge against crypto volatility. Most of the projects I've been following converted a major portion of their ICO proceeds to fiat shortly after the raise.