You have invested in a project that ran an STO. The sale is over. The money had been counted. Now what? What should you do or expect?
If STO Was Successful
Congrats! Both to you and the project you have chosen to invest in. Successful STO means the company can move on with the project, and you will get your profits from its further success. You should be receiving an email shortly that will inform you of the token issuance process and other details. Keep in mind that tokens can be required to stay in the lockup for up to several months in compliance with regulations (e.g., tZERO tokens were held in their wallet for 90 days before being distributed to token holders).
Token holders will be receiving their benefits as often as the company chose. It can be done every other month, every other year, once or maybe twice a year. The percental amount also depends on what has been agreed upon (gross profit/fixed profit/commissions/dividends). Most security tokens can be sold and bought after their offering. That is usually possible to get done on the native platform or bigger securities exchange platform.
If STO Was Unsuccessful
If the sale reached their soft cap, then they should be good to go. However, what if Security Token Offering failed to achieve its goals? The company will have to decide what to do next. Some projects cancel the sale even before it ends as they see the STO failing. Others let it end by itself, probably hoping for the best.
Some of the company’s options could be:
- Returning the investments and closing down
- Filing for bankruptcy
- Searching for another company to partner-up with
- Reorganizing and trying again
- Trying to move the project with what they collected
We can look at the Dutch project Blockport. They have failed to reach the STO soft cap of €1 million and filed for bankruptcy. However, they have also started looking for a company or project to collaborate with in order to reopen the company.
Keep in mind that regulations which the project complies with can protect you from any loses and if the company is not talking about the returns of the investment, the legal approach is possible.
How To Choose A Successful STO?
You might know the possible endings of the project, but do you know how to choose a project that you should support? Some companies might have really great ideas, but that does not mean that they will succeed. After all, Big Time thought that Moon Shoes was a wonderful idea until all those kids started twisting their ankles. So how do you choose and not lose?
You must do your homework. You must stalk the project as if you were a high school girl googling the name of your crush. You must know and evaluate everything.
- Analyze the concept of the project. Can it succeed and bring you profit? Is there a market for it?
- Understand the token value and what is it based on. How much will you get? Is it a new or already existing product? What regulations does the project comply with?
- “Meet” the team. Do you know who is behind the project? How experienced is the team?
- Join the community. Do other people believe in this project? How big and active is their community?
We have already published a few articles that might also help you:
- How To Evaluate STO
- What Is Stopping People From Investing In STOs?
- What Are The Factors To Consider Before Investing In STO?
All we can wish you right now is good luck and stay smart. Also, you could take a look at our own ROKKEX STO. We invite you to meet our team through our Medium articles, join the community on social media and Telegram, and learn more about us.
At ROKKEX, we take security extremely seriously, and our crypto exchange is built on ‘Security First’ principle. We want to share our expertise with the broader public for the world to become happy, safe, and wise.
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