Security Tokens or STO – Next step in Evolution of Capital Markets [Part 1/5]

[Fintelum]

This is part 1 of a 5 part series.

So you have a small business, or you are just starting out, setting up your company. Chances are, you probably run short on funding your great, big idea. Or, you have done some preparatory work to take you to a minimum viable product (MVP), but have little steam left to take your product to the market. Or better yet, your product is a proven working concept, but you still need that extra funding to take your small business to the next level.

Every business needs funding fuel to grow. Up until breaking even. And even then, to reach the next expansion levels, businesses need funding to grow and develop. Indeed, a survey on reasons why startups tend to fail in 9/10 cases admit that one of the top reasons for start-up ventures to fail is the lack of funding.

So what are your options? Not counting grants and subsidies, there are typically two main ways, of funding your business. The capital markets are largely available either in the form of debt or equity funding. The following will be an overview of the currently available funding avenues that companies have at their disposal. From the traditional private equity or debt to less conventional crowdfunding. Indeed, the most recent tokenisation method is the next step in evolution of the capital markets.

To view the original article: https://www.fintelum.com/blog/security-tokens-or-sto-next-step-in-evolution-of-capital-markets-thought-leaders/

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[ChrisPop]

I agree that STOs are the logical step forward for funding business ideas and projects. A company that caught my eye is MOBU which has built a STO platform with many features. They are now finalising their sale through a private fundraiser, but I think it is going to be a great success as they already have a few STOs in the pipeline.

[iamMhew]

Security tokens will fall under debt funding for now, unless there is already a regulations from SEC that it will fall on the equity side.
If there is none yet, deb financing is appropriate since there is no strict regulations on this, only two parties involve in documentations is enough to have a valid finance undertaking. But on the corporate law, I think it still needs to be notarized if possible, since it involves a huge amount or the public still needs to know the debt financing transaction.

[SMART VALOR]

STOs are the future. ICO were great and still are but the timing of intense regulations early on caused this to be a FAD. I think regulations from all countries are ALOT more stable than they were 2-4 years ago and companies like SMART VALOR and others will bring fresh new insight on STO.

[Shova]

STO are basically the same as ICO if there are no regulatory measures to control them. The crypto market is dynamic and the token issuer moves to any name that could attract investors.
No start up can start providing profit the next month they collect the money unless they just put it in a bank and make interest from it.

[Tipstar]

STO are basically the same as ICO if there are no regulatory measures to control them. The crypto market is dynamic and the token issuer moves to any name that could attract investors.
No start up can start providing profit the next month they collect the money unless they just put it in a bank and make interest from it.

And the good thing is there are now many regulated STOs. If you just researched a but a few of well established companies have issued STOs to increase their capital. Though the promised profit are not that spectacular and there are lesser chances of bull or bear affecting the price of STO token, it's after all a safer investment.

[Nalbo]

Real STO are regulated by the law and you can raise any dispute if you feel the terms are not satisfied in a court where the jurisdiction of the STO lies. STO is intended to be exactly similar to securities issued in stock markets but open to investors world wide and a 24/7 open market.