Are Security Token Offerings (STOs) The Future?

With his new project CPI Technologies, Marvin Steinberg has set himself the goal of using blockchain technology to bring the traditional investor and fundraising landscape into the digital age.

Steinberg quickly realized that blockchain technology can’t only be used for money transfers alone, but that this also has an impact on companies that are currently trying to raise funds through IPOs. The IPO process is exhausting and time consuming and often there is not as much money raised as planned. As a result, Steinberg founded CPI Technologies with the goal of helping companies of all sizes to generate capital through tokenization. This is relatively easy to do with STOs these days if you know how to do it correctly. STOs will revolutionise fundraising of all kinds in the near future – Marvin is sure of that.

The term STO stands for Security Token Offering. Tokens are based on blockchain technology and are digital images of tradable financial assets, similar to a company share or a company bond. If a company wants to raise money in the traditional way, they can do this on the stock market through an initial public offering (IPO for short). However, this process is highly complicated and has requirements that small companies can hardly fulfill.
To solve this problem, companies can now digitally raise the necessary funds. During the initial phase, this was possible through ICOs (Initial Coin Offerings). Because these were unregulated, there was a high risk for investors who were therefore unwilling to invest in ICOs.

In contrast, STOs are regulated by the state and have less stringent requirements for the company. From a company perspective, it is easier to attract large investors from around the world, which in turn leads to more money. Also from an investor perspective, STOs offer sufficient security and other advantages, such as dividends and equity shares.

Steinberg is strongly convinced that STOs will have a lasting impact on the investor landscape, as they simplify both, the raising of funds and the investments. CPI Technologies helps companies easily raise funds from a global group of investors.

The regulations may deter some investors – especially those that are more interested in short-term profit. However, the majority of investors are happy about the extra security that STOs provide. ICOs were too unsafe at the time and scared off many companies and investors. A lock-up period has the advantage that it can successfully prevent a token from rapidly declining in value after it’s first sold.
In principle, the company can tokenize everything to raise money: bonds, company grounds and even unconventional investments, such as works of art or products from a special campaign. But it must be mentioned that even if STOs are easier to do than IPOs, there are many unpredictable obstacles on the way to success.

This starts with the choice of the right STO type and the right jurisdiction and continues with legal questions and the actual implementation. CPI Technologies helps there clients through every step on the way to a successful STO. CPI Technologies is the first German company that developed its own methodology for this – a 7-step action plan that explains each step in detail. With their help, many companies have already successfully launched their STO campaign and put their vision into practice.

The company’s flagship project is planned in 2020. They will tokenize parts of the Time Square. They are talking about tokenization in the amount of $ 700 million. This is a great opportunity to show the world the benefits of security tokens and to give people around the world a chance to purchase parts of the Time Square.

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