Types of STO
An STO where each token is backed by the stock in your company so that the holders of your token have equal rights to your actual stock holders in terms of voting and dividend issuance.
Companies which trade in real world commodities like Gold, Real Estate etc., can launch an STO through us where the tokens are backed by your reserve of the said assets.
If your company would rather not tokenize your stock or reserve assets, you can raise funds by issuing Security Tokens with promise of payback to attract debt investors.
How to Start Your STO?
Tokenization of Equity, Reserve Asset, or Debt
Based on what kind of STO you are raising, you will need to tokenize that aspect in a liquidity format that best suits your fundraise needs and also spells good for the growth plan of your token in the short and long term with the correct security token economics
Creation of Owner’s Manual for Your Investors
What used to be called a Whitepaper, in Security Token Offering process is called an Owner’s Manual. This is the document that explains to your prospective investors of the problem your company solves, your business model, financial projections, team and roadmap for the next 3 years.
Development of Tokens on a Ethereum Platform or Your Own Blockchain
This is a technological decision where you need to prioritize if you need to leverage an existing, established blockchain or if you need us to setup a blockchain that is purpose built to mint, issue and manage your tokens.
Dividend Structure Issuance through a Smart Contract
Each and every investor of your security tokens are essentially stakeholders who you have to answer to and pay dividends legally, within your STO management dashboard. How and when the issuance happens and the report of the process needs to be logged and submitted to a government body as well. This is a built-in feature of our STO platform.
Investor Appropriation based on the compliances of Target Countries.
The government bodies that regulate STOs require a lot of compliance procedures like KYC, AML and other means to ensure that your security tokens are not held by rogue entities. This government compliant standard whitelisting process is one of our well maintained modules.
Investor Dashboard with KYC/AML & Dividend Issuance
Your investors need a clean and intuitive interface once they signup to your STO. From that point on, to whitelisting themselves and investing is a seamless process in our Investor dashboard. This also gives company updates and voting capabilities to them.
STO owners dashboard with Compliance Engine
As an issuer of Security Tokens, you need to be able to give audited reports of your processes as well as your investors, all the way down to the movements of your tokens in volume and price. This is an enormous undertaking, made effortless by our STO Owner’s Dashboard.
Incorporation in a Country relevant to your Venture
There are countries that favour one type of company over another and countries where the geography or the political landscape lends more credible advantage for certain types of venture. So based on your vision, we shall advise to optimise this factor.
Marketing and Fundraising
The expected returns of a cryptocurrency is a non-regulated matter that can run as wild as the hype takes it. In a legal STO, the promises from the company cannot even include a price projection. This is where we have arrived upon the best ways to make your tokens more desirable through tried and tested proxy marketing.
Security Token Offering Services
With ICO’s being used for pump and dump schemes with no path to redemption, it is becoming increasingly difficult for investors to establish trust and invest in any cryptocurrency project. This is where Security Token Offering comes in. Security Tokens or digitized assets are financial securities that are compliant with SEC regulations. They provide the investors with an array of financial rights, such as equity, dividends, profit share rights, buy-back rights, and much more. All the rights are written in the smart contract, and the underlying tokens are traded on the blockchain.
At Blockchain App Factory, we are one of the pioneers in Security Token Platform Development. The tokens can be built on your own blockchain, enabling the transactions to be faster and more secure. The company has global access to accredited investors, who will fund by participating in Security Token Offering (STOs).
The Security Token Development team understands the need for the illiquid assets, such as real estate, to be converted into tokenized assets to raise funds for the projects.
Features of Security Token Offering
The digitization of asset allows you to take control of illiquid asset into an equity issuance through a programmable code.
Fractionalization of larger assets
The STO is the representation of a company’s stock, so the concerned company can break their more substantial assets and provide it as STO to the token holder.
Increase in Liquidity
Every Security Token owned by the company would have the said asset liquified, so that it can be bought or sold at its set price.
The U.S Security and Exchange Commission (SEC) is responsible for encompassing the listing requirements of exchanges. STOs are fully compliant with SEC laws.
The Wallet is designed as a multi-signature, multi-device wallet on a blockchain with an elliptic curve cryptography, which makes the storage of funds secure.
Global Capital Investment
The Security Tokens provide trust and reliability for institutional investors to join in the crypto-market, leading to a larger pool of capital investment.
Greater market efficiency
Provide security to investors with its recognizable structure and its affiliated technological advancement, leading to investors gaining trust and their investment in the project.
There are no intermediaries between the company and investors, hence reducing the cost of commissions for the middleman.
The Security Tokens are developed on your own blockchain, thereby giving full control to you. No more worries of gas prices and changes in protocol or regulations.
The dividends from the investments will be automatically transferred to the investor’s wallet. The wallet is secured on the blockchain with Elliptic Curve Cryptography.
Similar to the shareholders, the security token holders have the right to vote in the decisions of the company, hence ensuring transparency.
Profit share rights
You can share the profits of the company with the token holders in the form of tokens, by directly depositing into the investor’s wallet.
The company buys the shares from the investors at the market price, hence re-absorbing part of the ownership distributed to the investors.
The company’s cash flow per share is on the smart contract, making it immutable. The company can be transparent about its earnings, per token, with its investors.
Holdings in another fund
The security tokens can be deposited into a fund or with a custodian service who can handle or hedge the funds in an efficient way.