Security Token Offerings are the newest method of fundraising for blockchain-based startups or established companies looking to tokenize their assets. According to Marvin Steinberg, German entrepreneur and STO expert, the popularity of STOs has yet to reach the heights of other traditional fundraising methods but he asserts that it will happen in the near future.
Blockchain research agencies like Diar, DAO Maker, and ChainAnalysis confirm that STOs are growing.
Marvin Steinberg explains that STOs are simply a better and more effective way of fundraising as they provide investors with equity shares in the company as well as dividends, and are fully regulated unlike other traditional forms of blockchain fundraising.
Marvin Steinberg Explains What is a STO
According to Marvin, a Security Token Offering is similar to a traditional IPO and comparable to normal securities as it is fully regulated. Marvin Steinberg explains that STOs are better alternatives to classic debt and capital-funding performed by Venture Capital or private equity firms.
Security tokens hold some intrinsic value because they represent the underlying interest in equity shares, dividends, and other benefits. Marvin continues that unlike regular tokens, whose price is only calculated based on speculation, STOs are backed by real-world assets. They also represent legal ownership which provides a greater value to investors and reduces the risk greatly. According to Marvin Steinberg, STOs can raise more funds in record time.
STOs are basically available to anyone as they provide fractional ownership and really low entry barriers. Investors don’t need to have millions of dollars to participate and they are not always restricted to a country or area.
Furthermore, as Marvin Steinberg explains, STOs can provide higher liquidity thanks to the fractional ownership as well as having a 24/7 global market. Marvin Steinberg also comments on the fact that STOs are fully transparent and allow investors and really anyone to check the number of tokens sold, burnt and more. The blockchain provides an immutable record of the token sale.
Launching a Successful STO can be hard, says Marvin Steinberg
According to Marvin Steinberg STO Entrepreneur, launching a successful STO can be really complex and time-consuming. He emphasizes the need to comply with all regulations first and to choose the right type of STO as well as jurisdiction.
Marvin Steinberg also emphasizes the lack of platforms or services offering STO solutions and warns startups to seek help only from professional and certified advisors. Another important factor for the success of an STO is the dashboard where the token sale is conducted. Marvin Steinberg asserts that having a robust infrastructure is crucial for a safe and successful token sale.
It’s also important to note that most of the tokens offered in STOs are issued on other established blockchain networks like Ethereum or Stellar. Marvin Steinberg also comments on how important a solid marketing strategy is, especially in the blockchain industry. He mentions the fact that cryptocurrency advertisement is harder than the traditional one as many big platforms have banned crypto ads. Moreover, classic blockchain ecosystem promotional methods like bounty campaigns and cryptocurrency airdrop lists do not work with STOs.
As security tokens are regulated, there are strict legal compliance matters that need to be addressed when distributing. This completely limits the possibility of doing a classic token airdrop and instead mandates companies to think outside the box and develop marketing mechanisms that are compliant with STO regulations. This often necessitates the need for experienced STO marketers.
Marvin Steinberg and CPI Technologies offer full package solutions for startups looking to launch a STO. One of the most important aspects of any cryptocurrency and blockchain project is the exchange platform is listed on. Without one, a cryptocurrency is essentially worthless. CPI has its own crypto exchange platform that can accept FIAT as well as other cryptonized assets like companies or real estate.
CPI Technologies has helped more than 40 projects succeed and guarantees clients a positive ROI within 3 months. Marvin Steinberg has created a compact guide on how to launch an STO where he asserts that taking care of the regulations and the jurisdiction is a crucial first step. In fact, the company has an upcoming flagship venture, which is a $700M tokenization of a part of Times Square itself. Marvin explains that the tokenization of real estate makes it accessible to anyone, making way for opportunities that never existed before.
Marvin Steinberg also comments on the technical aspects of STOs and the idea to separate them into 3 different rounds, taking advantage of European laws. Marvin states that startups looking to launch a successful STO need to make sure the infrastructure is robust to ensure a smooth and safe token sale.
Blockchain-based projects are becoming extremely popular and the demand for funds is increasing significantly, this leads to a demand for STO expert advisors. Marvin Steinberg states that most startups and even established companies will eventually adopt STOs as the main fundraising method.
Why Marvin Believes STOs are the Future
Marvin asserts that STOs are the future and will disrupt the IPO industry soon.
IPOs are still dominated by traditional investment banks and an IPO demands massive bureaucratic hurdles. Marvin Steinberg explains that this is not the case with a STO. Marvin describes that security tokens allow both startups and enterprises to tokenize assets, including equity, and issue them on a blockchain while retaining the legal safety that would otherwise attract institutional investors to only IPOs.
Marvin Steinberg, a successful serial entrepreneur, asserts that businesses that seek capital raise can dodge the jargon involved with an IPO and simply pursue the future of fundraising: STOs.
Marvin believes that much of the media does not yet reflect on STO news, but that is only due to the novelty of this technology. Thus, to bridge the information gap between the speed with which STOs are progressing and media’s reflection of that progress, Marvin has created a 2-minute STO quiz that helps businesses get a quick introduction to the world of security tokens.