The Full Timeline of Launching a Security Token Offering
Here, we outline the process of how to launch a Security Token Offering successfully and how long it can potentially take. The whole timeline lasts for well over a year with 5 main stages for pre-STO.
1. Team Formation (6-months)
Preparing an able team to take on the challenges ahead is the most essential part in the STO process. Usually in the first 6 months, it is imperative to form a team of experts from various fields to ensure smooth execution in all other aspects.
It is highly advisable to form a diversified team of professionals from multiple industries apart from the cryptocurrency industry such as law, sales, marketing, accounting and project development as they are all essential to providing the skills needed in completing the STO process. They will also serve as consultants throughout the STO launch process.
For example, a legal advisor plays an integral role in determining how to launch an STO as they help ensure the security token is compliant with all the regulatory frameworks or exemption requirements. It can be challenging to find an experienced and reliable legal advisor as STO is relatively new to the market. This is why finding a highly competent legal expert can be daunting, challenging yet a very important task.
You must also have the technological know-how to actually create the security token. There are several ways to go about this but we will discuss them on a separate article in the future.
2. Pre-listing Preparation (1-month)
In this stage, initial preparation work on the structure of offerings and services for our exchange should be done with advice from the experts. Marketing materials should be prepared during this time.
3. Marketing campaign (3-months)
The marketing campaign is crucial in introducing and pitching our exchange as a haven for security tokens to the potential clients. Information such as team members, whitepaper and token structure would be valued by both potential clients and crypto investors. It is important to make sure this information is delivered effectively and efficiently.
Marketing campaign format may include roadshow, mail marketing and social media channels. Building trust and promoting your brand are the major objectives of these activities.
4. Security Token Creation and KYC/AML (2–3 months)
Once you’ve acquired a client, you can start with verifying their legalities and creating their token. While most of the legal documentation and marketing materials are prepared, the development team can then focus on security token creation. This takes approximately a month for both the development and legal team. If all is well after that, the token issuance can be completed.
- Setting Up Offering Details
Below are some details that should be considered:
Start & end dates: Potential investors need to be informed of the exact time period of the investment.
Accepted payment: You must clearly state if the token is to be raised in USD, EUR, BTC or ETH.
Hard cap: You must clearly state the maximum amount of money you wish to be raised.
Rate: You must clearly state the percentage of Fiat or Crypto your token will be valued at.
STO whitepapers are very critical marketing documents needed in order to educate and entice potential investors for the success of your launch. The client’s company must provide an effective STO whitepaper that’s concise and precise while capturing most of the important information. The whitepaper is where everything comes together and is synthesized in one key document. The whitepaper should cover all the aspects behind the business like:
- Introduction to their business
- What problem are they going to solve with their business
- How they plan on solving said problem
- What’s their vision, mission and goal
- Who the team behind the company are
This one document should give a prospective contributor a full picture of their application and give them enough information to make an informed decision. Technical whitepapers are hard and can easily take 200+ hours of work from the whole team in a very short period of time. This is also the one document where the client’s team has to take ownership in creating, and the bulk of it cannot be outsourced — editors can help clean it up, but their team needs to write the bulk of the document. Writing a whitepaper is the one thing that founders shouldn’t outsource, as the writers usually don’t have any clue what is happening in the inner circle of founders. Once the Whitepaper is officially released, it is illegal in some places to change the terms of whitepaper during the campaign.
Outline of an STO whitepaper:
- Legal Disclaimer
- Product Details
- Industry Overview
- Technical Architecture
- Business Model
- Go to Market Strategy
- List of assets and other types of security associated with the token
- Tokenomics and Token Usage Details
- Team members and advisory
After their whitepaper is completed, the marketing of the actual STO can proceed. STO Marketing Campaigns can last from 1 month to 6 months depending on the client’s budget.
By whitelisting the investors, investors are allowed to participate in the STO based on the regulation the STO is under. The whitelist can be continually updated throughout the duration of the STO launch process.
5. Token Offering Stages (3-months suggested but may vary)
- Stage 1: Private sale
This is sometimes used to give an opportunity to larger investors to get involved, who has previously shown interest in the project.
- Stage 2: Pre-sale
Pre-sale can be used as both social proof and getting tokens to the people who you most want to align in your ecosystem.
- Stage 3: Public sale
The main public sale, where people who haven’t reacted yet have the opportunity to join in and support the project.
Launch stages, prices, allocation, and bonuses with dates (example):
- Presale: 10,000,000 tokens / $0.1 per token + 40% Bonus / September 1–30
- Pre-STO: 20,000,000 tokens / $0.2 per token + 20% Bonus / October 1–31
- STO: 100,000,000 tokens / $0.5 per token (no bonus) / November 1–30
And that is the end of launch process, paving the way to the new beginning of your Security Token! However, if all of these seem a bit too much to handle on your end and you’d prefer to simplify the whole process, please feel free to inquire with us at FIAT Exchange. Not only can we ensure success for each and every step in process but we will also be providing community support on our website and various social media platforms afterwards. The support services we offer will maintain good relationships with investors and respond to their inquiries in a quick and timely manner.
At FIAT Exchange, we can guide you on your financial adventure through empowering our authorized financial specialists to legitimately help you on your investment while safeguarding existing investor value.
In the world of Crypto, trusting the right people to do the job can be troublesome and difficult. This is why at FIAT exchange, we ensure that everything is safe and transparent so you can trust the process and after which, we will do the rest for you.
FIAT Exchange — as a pioneer in the consensus industry, we offer the tools to democratize access to finance. Through our platform, investors are able to identify opportunities in Small and Medium Enterprises.
At FIAT Exchange, we have consultants to help corporations launch their Security Token Offeringeffectively, efficiently and successfully. As a constituting body, we act as partners and assist each and every project from compliance, fundraising, and to final listing in our Digital Marketplace.
While there already other operating equity crowdfunding platforms in the European Union, we are the first to expand to become a broker-dealer and introduce to our investors an alternative Smart Securities layer, offering a secondary market where investors can trade their startup securities.
If you are an Investor looking to unlock access in the FIAT exchange ecosystem and discover new investment opportunities or if you are an Entrepreneur looking to raise capital, we can definitely help! Please feel free to contact us: firstname.lastname@example.org
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