What is STO, and how is STO marketing done?

Due to the potential of blockchain to transform the world, the crypto assets can bring enhancement in the financial services. No doubt that people nowadays are aware of utility tokens, but STO is a new concept in the market.

The abbreviation, “STO” stands for Security Token Offering which allows regulated means to launch a crypto token.

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The security tokens are backed by real-world assets and comply with the SEC regulations. Securities tokenization can enhance the liquidity of underlying assets to engage more investors.

It is essential to market your security token if you expect more future returns and profits on the shares by reaching investors countrywide or worldwide.

But there are some prerequisites which need to be followed before you begin with the marketing of STO.

Let us discuss the term “General Solicitation” with you before proceeding with STO Marketing Strategies.

General Solicitation

According to the Securities and Exchange Commission, General Solicitation allows issuers to solicit and advertise an offering broadly on the basis of the following conditions:

All purchasers in the offering are accredited investors.

Token sellers should take all the acceptable steps to confirm the status of accredited investors.

Every condition provided in Regulation D should be satisfied.

Regulation D

Under Rule 506(b) of Regulation D, a company can be assured that follows Section 4(a)(2) exemption by satisfying the following requirements:

The company should not use general advertising or solicitation to promote the securities.

The company can sell the securities to an unlimited number of accredited and verified investors and upto 35 other buyers.

Companies should decide thoroughly what information should be provided to accredited investors to ensure that it is free from misleading and false statements.

A company can only solicit and advertise the security token offering and still remains compliant with the exemption’s requirements, if:

Investors should be all accredited investors.

The company takes all possible steps to confirm that the investors are verified which can include reviewing documents, like tax returns, credit reports, W-2s and bank and brokerage statements.

So, it is essential to understand STO marketing basics and strategies which can help you to reach accredited investors in the market.

We have classified the STO Marketing into four stages and defined steps to be performed in every phase.