In Chapter 2, STO – Security Token Offering, we covered traditional fundraising methods such as angel funds, venture capital (VC) investors, private equity funds, and initial public offering (IPO). We briefly discussed the general financing cycle from the seed round at the formation stage of a start up to the IPO. We compared this financing process to an initial coin offering (ICO), which takes a different path. For an ICO, at the formation stage, a startup bypasses the private fundraising steps—and directly turns to the public for investments.
Security token offerings (STOs), the most promising alternative to ICOs, will likely support future growth of the blockchain industry after the ICO bubble bursts. Therefore, in this chapter, we will discuss STOs from the legal perspective in detail.
More specifically, we will...
