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What is a Security Token Offering ( STO )?
First lets see what an ICO ( Initial Coin Offering ) is. It is a way for startups or any business to raise funds from the public investors. In an ICO, the investor buys a digital cryptocurrency token. The main point to note here is that these coins you buy are UTILITY tokens, that you can use in future to avail the service of the business. It is NOT a ownership share. The ICO model proved to be extremely powerful and popular in the last couple of months. Infact it even outperformed the traditional Venture Capital funding.
The biggest 2 dis-advantages of the ICO were:
To address the above issues, the new type of token called the SECURITY TOKENs is taking main stage. Experts except this to be the next Big Crypto Trend.
A Security Token is a Cryptocurrency that inherits the properties of normal securities traded in the stock market. A Security Token is backed by the regulatory framework. It represents the shares of company stock. An investor holding a Security Token of a startup or a company has the same voting rights and access to dividends of the company.
The activity of a company or Startup trying to raise funds from investors, by issuing security tokens is called a STO ( Security Token Offering ). These Security Tokens can either be given as equity -or- it can be backed by the quantity of real world assets your firm holds ( Ex: Gold, Land, Commodities etc.). STO can also be launched a bonds that hold a debt value ie. Raising money from investors a payback debts with interest, thus saving your company equity.
In a STO, You distribute a good ‘Business plan’ to the target investor audience. This business plan ( Investor manual or User Manual ) speaks in detail about the Business, Revenue model, entire roadmap, Board, Advisor council, financial projections etc. to woo your token buyers.
What is a Dividend and Why is Dividend important in an STO?
One of the most important things your potential investors will look for in your STO is the Dividend structure and promise. So, we have given special attention to the dividend module in this STO Dashboard. Lets understand how dividend is issued in a Security Token Offering. Based on the earnings of a company, a regular some of money ie. Dividend is paid to the shareholders. It is like a ROI for your investors. Dividends offer a steady stream of revenue for investors, no matter how the price of your security changes. The dividends are paid on particular dates ( usually quarterly ).
While you plan your STO, if you create a steady dividend payout structure…there will more interest form investors globally. A good dividend payment plan speaks a lot about your company’s health. It portrays a promising and profitable company to invest in. Moreover since the dividends are taxed at capital gains rate ( which are usually lower than normal income tax rates ), it adds up to the glamour factor of your security token.
What features are available in the Dividend module of this STO Dashboard?
Dividend payment scheduler: Your investors will get paid on a pre-fixed date for owning your Security Tokens. You can set payment schedule ( Ex: Quarterly ie. 4 times per year ). You can set the Dividend amount ( Ex: an annual dividend of 10 cents per Security Token. Which means you will need to pay one-fourth of 10 cents each quarter ie. 2.5 cents per share holder for each token he holds ). Based on your configuration, the list of payees will show up each quarter. You can send out the dividend to respective investors on a click.
Dividend Calculator: A simple calculator for your investors to calculate the ROI they will receive per security token as dividend. The DPS( Dividend per share ) is calculated by dividing the total dividends paid out by your business( over a period of time ), by the number of outstanding security tokens issued. Ex: If your company token value today is $30. The $1 represents a yield of $1 / $30 = 3.3%. Which means if anyone purchases your security token for $30 today, he will earn 3.3% every year via. Dividends.
Eligibility Bar: You can set the eligibility criteria on who can receive dividends for the Security tokens they hold. You will be able to set the period between which the dividends will be paid for the security tokens held by each investor. Use this feature the cum-divident trading period -and- the ex-divident date can be set. Those who have purchased the security tokens prior or during the cum-divident trading period, and held it on the ex-divident date will be eligible for dividend for the respective tokens.
Dividend Type: You can configure the type of dividend that will be paid to the investors. Currently this STO Dashboard will have option to choose between Cash and token dividend.
Balance Sheet Entry: The dividends paid will automatically be entered in the balance sheet of your business.
What other things are taken care in this Security Token Offering Script?
The entire STO script is built to launch and run an STO with minimum friction and maximum performance. Some of the highlights are:
Investor stipulation for provisioning of securities based on business compliance.
Offering and selling securities as well as financial instruments require stringent compliance guidelines to be followed. These regulatory measures put forward by government bodies need to be adhered and submitted on a regular basis. The extensive Compliance monitoring module we have built in this powerful STO Dashboard will make your job a breeze.
Know Your Customer ( KYC ) / Anti Money Laundering ( AML ) modules.
As per your government regulations put forward, you would be required to collect, maintain and submit all details of investors holding your Security tokens. This powerful STO Dashboard script comes with excellent modules to collect KYC / AML details of investors seamlessly.
Notifications and Voting mechanism:
As part of running an effective Security Token Offering, you would be required to give timely notifications to investors and followers about your company and the happenings. Also the investors holding your securities having voting rights on certain decisions you and your board makes in the company. This incredible STO script comes with all the features required to send out notifications via. The Dashboard, email, SMS etc. Also neat Voting capabilities to announce and make your investor community vote on decisions that need to be made.
Audit / Reports module:
Regulatory bodies will need regular auditing of financials and process in the company. These reports would need to be maintained / submitted / disclosed on a regular basis. From your investors buying your Security Tokens to all your expenditure, revenue tracking…this STO Dashboard has made it seamless. The script also comes with plugins to integrate and pull your reports from external accounting software as well.
Automatic Dividend / Profit Share deposit:
As mentioned earlier, we have taken special consideration with the Dividend module in this STO Dashboard script. The script is architected to automatically deposit the dividends to the eligible investors ( based on the Dividend type ). Also, you can choose to share profits of your company with your investors and it also can be deposited in an automated manner.
Super Secure Wallet:
One of the biggest challenges faced by Digital tokens in security. How much ever steps you take, still the wallets are vulnerable ( thus giving you sleepless nights ). To avoid this, we have taken a logical step. By default, this STO Script comes with a process to use the native wallets of ETHEREUM and METAMASK. If your security tokens are not based on ERC20 / ERC223, we can deploy another secure Wallet based on the respective blockchain used for creating the token.
Buy Back rights implementation:
On this fantastic Security Tokens Offering script, you can define your buy back criteria. So, every investor can be well informed before hand that, upon their decision to sell the tokens…you have the buy back rights reserved at market rates. You can also send out a special notification of Buy Back plans at premium rates.