Raising capital with a Security Token Offering

A Security Token Offering (STO) is a method of raising capital in exchange for value, such as equity, debt, or asset-backed securities. Investors are issued tokens as a representation of their investment. U.S. securities regulation applies to all securities, whether they are digital or traditional, which include digital asset securities (a.k.a. Security Tokens).

Securitize offers a fully regulated, end-to-end digital solution that leverages blockchain technology and security tokens to enable capital raises and provide the potential for shareholder liquidity.

What is different about raising capital leveraging the Blockchain?

At the most basic level, you can think of the blockchain as a ledger, where, similar to a database, transactional data is written. Each transaction is written and verified in a block on the blockchain. Smart contracts with pre-set rules are written into the block to automatically trigger activities, such as a distribution, on a specific date or at a specific milestone. The creation of the issuance, the recording of the transaction, the transfers of securities and the recording of shareholder information all occurs digitally.

It's a common notion that digital activities with little-to-no human interaction tend to happen more quickly. That’s typically the case of financial activities leveraging the blockchain as well. With less human dependency for operational tasks, marketplaces leveraging the blockchain can trade 24/7 and take advantage of instant settlement, where unlike the T+2 (trade +2 days) settlement period associated with public market stock transactions, private marketplaces leveraging the blockchain typically can complete trades in minutes.

Information recorded on the blockchain is transparent and auditable. Through the Securitize issuer dashboard, issuers can see shareholders in near real-time. Additionally, issuers have the ability to send shareholder communications, issue perks and rewards, and issue distributions.

Not familiar with the ins and outs of blockchain technology as it relates to the financial industry? Check out our article on the Not So Beginner’s Guide to the Blockchain.

Asset classes using security token offerings

In growing adoption, more companies are turning to raising capital and managing their cap table through services leveraging the blockchain. Securitize offers a series of solutions to help established startups and private companies raise capital and provide the potential for liquidity.

Crypto-related funds, hedge funds, venture capital funds, and even asset managers are beginning to turn to digital asset securities. Securtize’s roots are in tokenizing the first venture capital funds to issue an STO.

As early adopters, real estate developers and investors have leveraged STOs to raise capital for specific projects. Securitize is one of the leading partners in tokenizing real estate issuances.

Types of digital asset securities

The security token may represent ownership stake in the issuing business, often with voting rights. Similar to a share of stock in a company but it’s transacted and recorded leveraging the blockchain.

The security token represents a loan at an interest rate. This is where an investor is funding a firm or asset in part or whole in exchange for interest such as NBA player contracts, real estate mortgages, or corporate bonds. Smart contracts make it possible for automatic distributions to occur on pre-defined schedules, with less human interaction.

The security token may represent ownership stake in an asset such as real estate or commodities.

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Solutions

Securitize’s primary listing works as a standalone service, and also can be combined with our full end-to-end fundraising solutions, such as:

Mini-IPO

The complete Reg. A+ solution for raising up to $75M in capital from U.S. retail investors, and for providing a path for liquidity.

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Reg. D

End-to-end solution for raising unlimited capital from U.S. accredited investors, and for providing a path for liquidity.

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Reg. D + S

End-to-end solution for raising unlimited capital from U.S. accredited investors and International investors, and for providing a path for liquidity.

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Supporting primary and secondary markets

Leveraging our end-to-end solutions, we help enable the capital fundraising option that fits your business, as well as the secondary market, while ensuring compliance standards are achieved.

Reg. D (506b, 506c)

Unlimited

U.S. companies

No SEC filing

Accredited and Institutional U.S. Investors

Reg. CF

Raise up to $5M

U.S. companies

SEC filing

All US Investors

Reg. A / Tier 2

Raise up to $75M

U.S. companies

SEC filing

All US Investors

Reg. A / Tier 1

Raise up to $20M

U.S. companies

SEC filing

All US Investors

Reg. S

Unlimited

U.S. and non-U.S. companies

No SEC filing

International Investors (non-U.S.)*

Let’s see if Securitize is a fit with your objectives. Answers to the following quick questions will help us better understand the potential.

Only international investors pursuant to the regulations associated with the investor's country of residence.

Check the background of Securitize Markets on Finra BrokerCheck.

Securities are offered through Securitize Markets, LLC, (“Securitize Markets”) a registered broker-dealer and member FINRA/SIPC. Neither Securitize Markets, nor any of its affiliates provide any investment advice or make any investment recommendations to any persons, ever, and no communication through herein or in any other medium should be construed as such. Securities offered on the Securitize Markets ATS have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Assets listed herein, such as digital assets or tokens using blockchain, are speculative, involve a high degree of risk, are generally illiquid, may have no value, have limited regulatory certainty, are subject to potential market manipulation risks and may expose investors to loss of principal. Investments in private placements, start-up investments in particular, are also speculative and involve a high degree of risk. Investors must be able to afford the loss of their entire investment. Eligibility to buy and sell securities on the Securitize Markets ATS is determined by Securitize Markets in its sole discretion. Offers to sell, or the solicitations of offers to buy any security can only be made through official offering documents that contain important information about risks, fees and expenses associated with the applicable securities available for trading on the Securitize Markets ATS. Investors should conduct their own due diligence, not rely on the financial assumptions or estimates displayed herein, and are encouraged to consult with a financial advisor, attorney, accountant, tax advisors, and any other professional that can help you to understand and assess the risks associated with any investment opportunity. Past performance is not indicative of future results. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided herein or through any references/links herein. Any financial projections or returns shown herein are provided by the issuer of the relevant security and Securitize Markets has not verified the accuracy. Further, there can be no assurance that any valuations provided by issuers are accurate or in agreement with market or industry valuations. Securitize Markets and its affiliates make no representations or warranties as to the accuracy of such information. Securitize Markets may collect certain information about you that helps us comply with various securities regulations and rules and the USA PATRIOT Act, a Federal law that requires all securities firms to obtain, verify, and record information that identifies each applicant. The information also helps us more fully understand your investment profile and identify what types of investments or strategies may be suitable for you. The term “Investors” used on this website, typically refers to accredited investors where applicable. Please note: if we cannot verify the information you provide, we may be required to restrict or deny your account. Trading during Extended Hours Trading Sessions carries unique risks, such as greater price volatility, lower liquidity, wider bid/ask spreads, and less market visibility, and may not be appropriate for all investors. There is no guarantee that a diversified portfolio will enhance overall returns, outperform a non-diversified portfolio, or prevent against loss. By accessing this site and any pages thereof, you agree to be bound by our Terms of Service and Privacy Policy.