3 things to think about when launching an STO
Your checklist for a successful investment offer
More and more businesses are realising the advantages of emerging investment methods like tokenization. However, there’s a big difference between understanding its potential and launching your own Security Token Offer (STO).
In order to inspire confidence and help companies explore tokenization opportunities, WeOwn has launched a new, free ebook analysing the key things your business needs to consider when creating an STO. Here are some of the questions we answer:
1. Why are STOs more effective than traditional investment models?
Fundamentally, digital asset offers are a quicker, more straightforward way to raise capital than better known methods such as private fundraising and IPOs. However, there are other benefits to embracing tokenization as a means of generating funds.
For example, good STO platforms tend to be built on the blockchain, which offers a high level of security to both companies and your investors, as transactions are immutable. Digitising assets also lowers the barrier for entry, as shares can be fractionalised to make them more accessible to a wider investor base.
2. How do you attract a new investor base?
As we’ve just mentioned, STOs naturally attract bigger audiences as the ability to offer fractional shares makes investors more open-minded about new opportunities, as the risk is lower. However, this isn’t the only reason that many people prefer digital assets.
Traditional investment methods like IPOs are often unattractive to younger investors, as the process is slow, complex and paper-based. In contrast, tokenization offers rapid connections to growing companies, and investors can form direct relationships without involving a large number of third parties.
This new way to invest in companies is particularly attractive to younger generations, who find the ability to log onto an online portal and immediately invest in attractive opportunities fits with their highly digital, fast-paced lives.
3. How can you maximise investor value?
The major shortcomings of popular fundraising methods do not just involve initial issuance; there is a lack of support with managing the ongoing investor relationship that some tokenizing platforms are addressing.
On a fundamental level, companies need to ensure your investor information is up to date in order to meet legal compliance requirements. However, there is a huge value-adding opportunity that is not currently being explored by most businesses.
Digitising the investor relationship allows organisations to start online dialogues with your shareholder base, conducting communications quicker and more sustainably. Some tokenization solutions like WeOwn’s Digital Marketplace allow you to run voting and corporate actions through the platform, enabling a much more dynamic and frequent means of engaging your most valued investors.
Get tokenization right for your business
These questions are just a few of the essential topics we cover in our latest ebook. The biggest barrier to tokenization going mainstream is not a lack of value, but a fear of going about it the wrong way – and we aim to break down that barrier.
Find the right technology platform to simplyify investment models; book your Digital Marketplace guide today.