Tokenized Fundraising

What is it?

Essentially, we help tokenize your companies ownership interests into an industry standard security token for a security token offering, or “STO”. The STO is a regulatory compliant ICO.  STO’s are seen as the legitimate, new way to crowdfund. The STO process takes a minimum of 3-5 weeks.

How does the law view this?

Put simply-if we tokenize your company’s ownership interests to fundraise, that token is a security.

One can and should still use blockchain to fundraise. It is advisable to consult with an attorney for a general evaluation, and to help with the required paperwork / fillings. Utilizing the blockchain does not circumvent tax or securities law requirements.

In other instances, the Supreme Courts Howey test is applied to see if you have an “investment contract”.

How does it work?

Stage 1, we create or transform you into a smart company, essentially a business entity with its companies ownership interests tokenized (stocks or membership units).

These stocks / units are digitally represented by a security token that reside on an encrypted distributed ledger, i.e. a blockchain.  We handle the technical end of setting up your security token on a blockchain. We mint as many tokens as a company requires to represent their shares / equity or debt.

As a smart company, your cap table is managed on the blockchain, and your shares/equity interests can be transferred as a trackable security token. Transactions can be unwound on the blockchain we use.

This is done for a flat fee.

Once you are a smart company, fundraise with an STO- Security Token Offering. 

Stage 2-the security token offering, or STO.

There are several avenues of depending on what development stage your company is in, and what type of investors you would like to have. (Full IPO / registration, or exemptions to Securities Act registration via Regulation D, S, CF, and/or A+.)

You may sell shares to private U.S. investors with Regulation D, and foreign investors with Regulation S.

Take advantage of public crowdfunding via Reg CF to raise up to 5 million, or use Regulation A+ for a public offering to raise up to $75M in a “mini-IPO”.

The first SEC registered digital token IPO on the blockchain was May 3, 2021, (INX Ltd.) and brought clarity to the blockchain industry as it intersects with securities law.

Your Allomer blockchain attorney will ensure the tokenomics are planned well, and correct SEC paperwork is filed. Each Regulation option has its own flat fee.