How To Evaluate If You Really Need an STO

How To Evaluate If You Really Need an STO

Every week we see more Security Token Offerings announced. Notably, the number of non-blockchain businesses who opt-in for STO is increasing. Be it independent musical promotor like StreetLife International, banking services provider like Wevest, or an investment bank like BTG Pactual, they all are resorting to an STO as a reliable fundraising technique with lower execution costs and optimum pace.

However, contrary to popular opinion, STO is not a one-size-fits-all solution. To evaluate if your project needs an STO, go through the following Priority Token check-list.

►Your jurisdiction allows conducting an STO – or you are able to shift to another jurisdiction.

►You have a running business and/or a number of assets you can tokenize and offer to your investors.

►You are aware of the paperwork and the process of deploying an STO, and you have the necessary talents in your team to do the job. Another option is relying on a partner that would do all the cumbersome work for you to let you focus on your product.

►You know your target audience and offer it something valuable to incentivize them to contribute their finances.

►You are ready to walk an extra mile for your fundraising, which implies meet-ups with investors, roadshows, etc.

►You have the resources to set up decent media coverage for your STO – or the readiness to apply for external promotion services from an STO marketing and advisory agency.

These are the very basics that you have to consider when planning an STO or choosing from a variety of fundraising options. These points may seem obvious, but we at Priority Token have seen many promising projects fail due to one or more reasons mentioned above. Sometimes it’s about legal issues arising from the lack of preliminary analysis, sometimes it’s the inability to reach the soft cap because of the poor exposure and media coverage. But in most cases, it is all about personal contact with major investors. We believe that in the STO era, unlike the ICO times, it’s crucial to meet institutional investors in person and pitch to them instead of relying on small-scale and private investors with their tiny contributions. A meet-up can come in handy for that, although, the roadshows do a greater job, especially the Asian ones.

To sum up, not all the projects fit into the STO framework. However, many of them do, and 2019 is the perfect year to ride this wave.

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