STO based crowdfunding platform for technology startups

Unicsoft delivered comprehensive business analysis and consulting on building a blockchain-powered crowdfunding platform that embeds security tokens for digitizing assets and profit sharing to guarantee the most trustworthy and secure fundraising.

Business context

The customer reached out to us with the idea of creating a platform for crypto fundraising management (intentionally via Initial Coin Offering), where startups looking for fundraising can easily and seamlessly create, manage and trade their crypto assets. Our task was to guide the customer through the entire process of turning their idea into a well-thought, functional, regulations-friendly, secure, and successful software product: from value proposition to detailed tech requirements.

Business challenges of the project

Select a suitable token model

Our key challenge was to define the most relevant fundraising model (even though the initial intention was to use ICO model) while considering the following aspects:

  • compliance with the US’ legal framework
  • a need to issue dividends for holders
  • tokens should be publicly tradable.

Complete a thorough analysis of regulations

To make sure the Security Token will be publicly available and not denied by SEC (Securities and Exchange Commission), we had to research the following aspects:

  • Regulation D of SEC governing private placement of stock shares
  • Regulation A that applies to public offerings of securities
  • Types of legal entities applicable for crowdfunding organizations.

Define a business model

Since the idea of the platform was rather vague, we had to make the product’s concept viable by:

  • Finding a meaningful value proposition
  • Agreeing on key collaborators and partners
  • Clarifying revenue streams based on the profit sharing model.

Technological challenges to overcome

To ensure the project’s long lasting success, we had to design a platform tokenomics covering the following metrics: token purpose, functionality, price, utilities, and distribution.

One critical step before defining the tokenomics was a chain selection that had to comply with the following parameters: versatility, speed, platform sustainability, dev friendly, and low transaction cost.

Solution

STO-based approach to fundraising

The platform introduces STO based crowdfunding for tech startups and investors to benefit from low entry barriers, automated investment process, and significant STOs advantages:
STOs comply with SEC regulations in the US and protect the rights of the security token holders, which are missing in the ICO case.
Compared to ICOs or IPOs, STOs enable companies to establish efficient securities management owned by their shareholders: to know the amount and holders of securities, long term.

Security Token ecosystem

Custody & Trust
Issuance
Broker-Dealer
Crowdfunding
Legal
Trading
Compliance

Countries of incorporation of security token platforms

Switzarland
6%
Canada
8%
US
35%
diagram diagram line 1 diagram line 2 diagram line 3 diagram line 4 diagram line 5 diagram line 6
Singapore
4%
Other Jurisdictions
16%
Europe
30%

Market and competition research

We performed a comprehensive analysis of the market maturity and potential. Our thorough competitor research proved that even though STO is already significantly adopted in the US and Europe, there is still room for advanced functionality and features.

Competitor research helped us to find product gaps we could cover with our solution, as well as define our positioning in the market.
Profit Sharing Token
Invest in crypto
Unbiased rankings
Focused investments
Startup preparation
Copy investing
Browse by categories
Competitor 1
Competitor 2
Competitor 3
Competitor 4
Competitor 5
Competitor 5
We mapped our customer’s potential competitors’ business models using “Business Model Canvas,” which, in turn, helped them design their own effective business model.

Business model design

Based on the research mentioned above, and in close collaboration with the client, we outlined the future platform’s business model, setting up key strategic vectors that influence technology, resources, requirements, marketing, and revenue streams.
Key Partners
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Key Partners
  • Security token issuers (Polymath, Securitize, etc.) & exchanges (secondary markets)
  • Law companies with crypto departments
  • Finance and marketing, Operations teams
  • Crypto investment funds
Collaborators
  • P2P payment systems
  • Tech schools, Universities, Business Schools
  • Coworking spaces, startuo HUBs
  • Tech incubators and accelerators
  • Partnership with other Investment platforms
Key Activities
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Platform Design& Development Business Development
  • Marketing (internal and startups assistance)
  • Sales
  • Business strategy operations
Operations
  • Platform maintenance and control
  • Clients Support
  • Legal ops
  • Cybersecurity
  • Due Diligence
Value Propositions
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Value Propositions
    By introducing blockchain technologies to crowdfunding business we help traditional crowdfunding users, tech enthusiasts and crypto investors to explore alternative instruments to their portfolios with low entry barriers, automized and smooth investment process with access to lech-focused promising startups. The new approach to crowdfunding will also benefit startups by letting them to conduct a campaign similar to IPO in a fully regulated and much simpler way, having exposure to tech savvy & industry-specific investors and users.
Customer relationships
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Customer relationships
  • Dedicated personal assistance - Accredited investors, Verified Startups
  • Automated Service - Tech enthusiasts, crypto enthusiasts, investors in tech
  • Co-creation - Tech enthusiasts, crypto enthusiasts, investors in tech
  • Communities - All segments
Customer Segments
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Investing side
  • Tech enthusiasts and experts
  • Accredited investors
  • Crypto enthusiasts
  • General investors in tech
Start-up side
  • Blockchain startups
  • Emerging tech startups
  • Traditional tech startups
Key Resources
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Key Resources
  • Intellectual - Platform design and internal algorithms, partnerships & customer's database
  • Financial - for platform scalability and maintenance
  • Human - Platform management, operations, and customers support
  • Physical - databases, servers (opportunity to be fully remote company)
Key Channels
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Phase 1&2 Awareness and Evaluation
  • Personal network and connections, Social media for ambassadors search
Phase 3 Delivery
  • Offline and online channels - networking conferences and events, SEM, SMM, event organization, PR
Phase 4 After sales
  • All previously mentioned + internal communication channels like website push, email
Cost Structure
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Cost Structure
  • Platform design & maintenance
  • Wages and bonuses
  • Business Development expenses
  • Operational expenses
Revenue Streams
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Revenue Streams
  • % from fundraised amount
  • Equity in a listed project which successfully raised funds
  • Consultations on structuring marketing campaign for listed projects
  • Helping with legal procedures for compliance of listed projects
Key Partners
  • Security token issuers (Polymath, Securitize, etc.) & exchanges (secondary markets)
  • Law companies with crypto departments
  • Finance and marketing, Operations teams
  • Crypto investment funds
Collaborators
  • P2P payment systems
  • Tech schools, Universities, Business Schools
  • Coworking spaces, startuo HUBs
  • Tech incubators and accelerators
  • Partnership with other Investment platforms
Platform Design& Development Business Development
  • Marketing (internal and startups assistance)
  • Sales
  • Business strategy operations
Operations
  • Platform maintenance and control
  • Clients Support
  • Legal ops
  • Cybersecurity
  • Due Diligence
Value Propositions
    By introducing blockchain technologies to crowdfunding business we help traditional crowdfunding users, tech enthusiasts and crypto investors to explore alternative instruments to their portfolios with low entry barriers, automized and smooth investment process with access to lech-focused promising startups. The new approach to crowdfunding will also benefit startups by letting them to conduct a campaign similar to IPO in a fully regulated and much simpler way, having exposure to tech savvy & industry-specific investors and users.
Customer relationships
  • Dedicated personal assistance - Accredited investors, Verified Startups
  • Automated Service - Tech enthusiasts, crypto enthusiasts, investors in tech
  • Co-creation - Tech enthusiasts, crypto enthusiasts, investors in tech
  • Communities - All segments
Investing side
  • Tech enthusiasts and experts
  • Accredited investors
  • Crypto enthusiasts
  • General investors in tech
Start-up side
  • Blockchain startups
  • Emerging tech startups
  • Traditional tech startups
Key Resources
  • Intellectual - Platform design and internal algorithms, partnerships & customer's database
  • Financial - for platform scalability and maintenance
  • Human - Platform management, operations, and customers support
  • Physical - databases, servers (opportunity to be fully remote company)
Phase 1&2 Awareness and Evaluation
  • Personal network and connections, Social media for ambassadors search
Phase 3 Delivery
  • Offline and online channels - networking conferences and events, SEM, SMM, event organization, PR
Phase 4 After sales
  • All previously mentioned + internal communication channels like website push, email
Cost Structure
  • Platform design & maintenance
  • Wages and bonuses
  • Business Development expenses
  • Operational expenses
Revenue Streams
  • % from fundraised amount
  • Equity in a listed project which successfully raised funds
  • Consultations on structuring marketing campaign for listed projects
  • Helping with legal procedures for compliance of listed projects
Influencer
collaboration strategy
To support our customer’s marketing efforts and facilitate wide platform adoption, we created a marketing strategy of defining details from the collaboration process with influencers:
Influencer Type
Type of Content
Core Audience
Secondary Audience
Crowdfunding and investment advisors
Where to invest, rising trends, analysis of market and emerging opportunities
Accredited Investors, General Tech Investors
First time Investors
Crypto Traders
Bitcoin/ETH, ALT coin trends and news discussion and trading advice
Crypto Enthusiasts
Accredited Investors, General Tech Investors
Blockchain & Tech Educators
Educate about technology, blockchain technology and crypto currency
General Investors and First time Investors
Students, and users curious to blockchain and tech
Tech News & Trends
Technology trends and news discussions
Tech Enthusiasts, Crypto Enthusiasts
First time investors, General News Readers
Finance, Stack trading advisors
Finance news, Stock Market news, Investment news and discussions
Accredites Investors, General Tech Investors
Crypto Enthusiasts
Business & Trends
Business success and failure analyses, trend discussion and predictions, Broad business coverage
General Tech Investors, Accredited Investors, Tech Enthusiasts, Crypto Enthusiasts
General Audience

Security Token Model implementation

Before deciding on a token model, we conducted a thorough comparison analysis among Utility Token, Security Token with platform profit sharing, and Security Token with securitized portfolio profit sharing based on the following metrics:

  • Value for users
  • Usability
  • Price dependency
  • Legal compliance
  • Financial model
  • Chain selection
  • Tokenomics
  • Risks
Suitable
Blockchain selection
We made a thorough research of possible, applicable chains followed by a calculated decision based on the comparative metrics. The metrics had to comply with SEC regulations and deploy ERC-1400 standard security tokens.
Our experts can make a research of possible, applicable chains for your project
Platform Tokenomics
We introduced key Profit Sharing Token features. This included a profit sharing mechanism, token rewards, customer tiering, and technical implementation of the PST, which comprised its distribution, price, lockup period, and use of funds.

Startup requirements and metrics for listing

To ensure platform trustworthiness and SEC regulation compliance, we developed a comprehensive matrix of requirements and metrics applicable to startups within registration procedures. This included:

https://unicsoft.com/wp-content/uploads/2021/11/case-study-block-11-img-1.png
Details of company incorporation
https://unicsoft.com/wp-content/uploads/2021/11/case-study-block-11-img-2.png
Business model and product details
Financial and corporate documentation
Founders background and motivation
Legal agreements

How the platform works

Copy investing
It’s the first crowdfunding platform that supports investment syndicates - a group of investors who combine their resources and rely on one another, as well as expert knowledge, to invest in startups.
Profit-sharing token
The platform enables users to leverage low-risk investments by investing directly into the business activities of a platform and thus diversifying their investment portfolio with digital assets.
Investments in crypto
Being a highly industry-specific crowdfunding platform for tech enthusiasts, it provides an option for investors who have some amount of cryptocurrency at their disposal to apply it towards investments.
Unbiased rankings
This product is the first crowdfunding platform to provide fair rankings that exclude paid promotion options for startups. The benefit of this is to not mislead investors in their investing decisions.
Focused investments
Being the first crowdfunding platform built solely for tech-related startups, it only attracts tech-focused investors. As a result, investment conversion rates greatly increase compared to platforms that are dispersed in various project fields.
Startup preparation
To maximize the chances of startups being funded, the platform provides added value through additional services: design and branding, digital marketing, and creating marketing materials.

Our Expertise

Blockchain network
STO
Cryptocurrency
Smart contracts
KYC
EVM
ERC-1400
Reg D (SEC)

Results

A groundbreaking product concept of the crowdfunding platform, providing security tokens to distribute shares of startups and tokenize securities of investors.

Sophisticated platform tokenomics, underlining a system product roadmap to jump-start the software development process as the following stage.

Planned MVP development to validate product ideas at low risk and cost with a user base of early adopters.

https://unicsoft.com/wp-content/uploads/2021/11/Screeenshot.png
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    Meet us in the UK Aleksey Zavgorodniy

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