A successful capital raise empowers business leaders and founders to move forward and pave the way for their companies’ long-term success as it enables them to hire, innovate, and scale in ways they couldn’t before. Raising capital is an exciting and necessary step for any company or startup, and having an understanding of how to effectively undertake it is critical. Traditional methods of raising capital have become less appealing, allowing new capital-raising innovations to be implemented and adopted; one such innovation to raise funds for a startup is the security token.
Raising Funds in the Traditional Sphere:
How startups get funding through traditional means is becoming inefficient and expensive.
This is because:
- Rising interest rates are making borrowing money from banks expensive;
- VCs are becoming more demanding- incentivized to undervalue startups and create more potential for profits; and
- Technological shortcomings in stock exchanges.
While the traditional IPO and VC funding rounds have been the staples of raising capital for decades, new innovations in the capital raising industry seek to disrupt them. Security tokens are a new way to raise capital for businesses enabling them to obtain funds to start and/or grow a business for startups.
Raising Money Through INX (Security Token Offering):
Thanks to a team of traditional market experts and a disruptive fintech approach, INX is redefining the world of raising capital through regulated security tokens.
INX facilitates an all-encompassing approach to raising capital by bringing together:
- Pre-Issuance – Experience in understanding the tokenomics
- Transfer Agent – INX owns a transfer agent which allows for recordkeeping of the security tokens
- Issue the Token – We conduct thorough due diligence and make sure all compliance and compatibility requirements a satisfied
- Pre-Issuance – Perform AML/KYC and accreditation reviews
- Post Issuance – INX has an Alternative Trading System (“ATS” ) License which allows for the trading of these security tokens in the secondary market
- Bringing investors to the platform – INX Securities is available for trading 24 hours a day, 365 days a year
Through this, INX is providing startups and businesses with new opportunities to acquire capital from both fiat and crypto funding. Issuing a security token has many advantages over other forms of raising capital, and is making investing in startups a more democratized process. We at INX are taking action to disrupt the capital raising landscape, and are doing this through the utilization of security tokens.
Advantages to Funding Through Security Tokens:
✓ An efficient capital raising process
✓ Raise money directly from a variety of investors: institutional and retail (allows for customers of the business to participate in funding)
✓ Capital raise in which founders can raise capital while keeping 100% of their equity
✓ A secondary markets, via the ATS, provides a vehicle for liquidity to investors in the secondary market
✓ Run on blockchain technology: 24/7/365 trading
Advantages in Partnership and Community:
✓ Community and the new layer of partnership that STOs (Security Token Offering) allow
✓ Users become partners; this creates growth engines
✓ Entrepreneurs “meet the money” on the secondary market.
Security tokens provide not only advantages to raising money, but also to the partnerships and community aspects of a capital raise. In addition to partnerships with institutional and angel investors, security tokens enable retail investors to participate, which is extremely beneficial to businesses, because it means that their community and users take part in their funding. This not only enhances community engagement but also provides a passionate, built-in group of investors to provide capital and promote the business.
Start your security token journey and raise funding for your business by reaching out to [email protected]