How the Successful German Businessman, Marvin Steinberg, is Advancing STOs
After Marvin Steinberg, German serial entrepreneur and marketing expert, sold his energy firm to an America multinational in a multi-million dollar deal, he established CPI Technologies, a white label software provider for STOs.
Marvin Steinberg explains how companies are struggling to effectively use the blockchain for capital raise as they lack the necessary experience to advertise their products/services accurately. Marvin Steinberg also comments on how most startups don’t know how to raise funds, even though the blockchain industry offers some of the best methods available.
The blockchain industry indeed offers many innovative methods of fundraising. ICOs (Initial Coin Offerings) were invented in 2013. Unlike an IPO, an ICO is a crowdsale which gives people the opportunity to buy software access units in mass amounts. However, the tokens themselves have no intrinsic value and grant investors no equity or voting rights.
This hasn’t stopped ICOs from becoming extremely popular, especially in late-2017 and 2018. In fact, ICOs have raised billions in funding as they are not regulated. Marvin Steinberg explains how this was a contributing factor in the decline of ICOs. He explains that ICOs are not the optimal way to raise funds through the blockchain, at least not for legitimate businesses. ICOs are largely utilized by fraud projects.
Blockchain space’s leading research operators like Diar and DAO Maker have provided sufficient support to the claim that most ICOs are scams.
ICOs failed terribly shortly after the beginning of 2018 with almost over a 50% failure rate in 2017. Most ICOs turned out to be scams or failed projects and their tokens eventually reached no value.
The beginning of a New Era
After the collapse of ICOs, blockchain-based startups desperately needed a better way of raising funds. The creation of IEOs and STOs marked the next era of fundraising for startups in the blockchain industry.
IEOs (Initial Exchange Offerings) are simple and similar to an ICO; a project conducts a token sale but does it on an exchange. The exchange itself is conducting the token sale, taking care of investors, marketing and all the technical details.
At first, this method had some success as it provided an extra layer of security. Exchanges had to check the legitimacy of the project before accepting it as they don’t want to tarnish their reputation with fake or fraudulent projects. However, as Marvin Steinberg explains, exchanges are known for their constant attempts of dodging international law, using wash trading to give investors the illusion of liquidity. This means that most exchanges don’t necessarily care if a project is a scam or not as they have no reputation or user base to begin with.
Consequently, most exchanges ended up hosting fraud projects. Thus, Marvin Steinberg asserts that no legitimate company should opt for an IEO as it could quite likely build up to a disaster for both its reputation and its ability to raise capital.
Instead, Marvin Steinberg states that STOs are the future of fundraising through the blockchain. A STO is a Security Token Offering, and it is fully regulated. The tokens sold are security tokens, and these tokens are fundamentally different from ICO tokens as they offer investors a piece of the company, granting them equity shares as well as dividends.
Security Tokens are fully regulated, which means investors have a lot of protection against scams. In return this allows startups to raise more funds as ‘institutional investors’ and other big investors can easily join the fundraisings.
Marvin Steinberg is the co-founder of CPI Technologies, a company that is leading the market for white label STO solutions. In fact, the company has completed over 40 projects and its upcoming flagship venture is a $700M tokenization of a part of Times Square itself. Marvin explains that the tokenization of real estate makes it accessible to anyone, making way for opportunities that never existed before.
Despite being regulated, Marvin Steinberg continues, STOs do not involve the same amount of red tape as IPOs do.
IPOs are still dominated by traditional investment banks and an IPO demands massive bureaucratic hurdles. Marvin Steinberg explains that this is not the case with a STO. Marvin describes that security tokens allow both startups and enterprises to tokenize assets, including equity, and issue them on a blockchain, while retaining the legal safety that would otherwise attract institutional investors to only IPOs.
Marvin Steinberg, a successful serial entrepreneur, asserts that businesses that seek capital raise can dodge the jargon involved with an IPO and simply pursue the future of fundraising: STOs. He believes that much of the media does not yet reflect on STO news, but that is only due to the novelty of this technology.
Marvin Steinberg explains that what startups truly seek is a security token offering, something that has all the positives of an IPO, without the negatives.
How to Launch a Successful Security Token Offering
Marvin Steinberg asserts that is can be difficult to launch a successful STO as most businesses are fairly inexperienced when it comes to blockchain regulations. Marvin Steinberg states that startups looking to launch a STO should seek professional help and advice from qualified and experienced STO experts or services.
Marvin Steinberg founded CPI Technologies with that in mind: helping businesses reach success has been Marvin’s main quest as he has helped dozens of different top-quality projects.
Marvin Steinberg has actually created a condensed guide on how to launch a successful STO where he explains that choosing the right type of STO and jurisdiction can be crucial factors for the success of the token sale.
Marvin Steinberg also explains how making sure the sale is compliant with all the required regulations is a top priority. Such details are covered in Marvin’s short 2-minute STO quiz, which helps businesses get a quick introduction to the world of security tokens.
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of EWN or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.