Equity Tokens and STOs: The New Frontier in Startup Equity

Equity Tokens and STOs: The New Frontier in Startup Equity

In a world where capital markets are evolving rapidly, startups and SMEs are seeking faster, more efficient, and globally scalable ways to raise equity. Enter the Security Token Offering (STO)—a modern financing method that allows companies to issue equity tokens, representing shares of their company directly on the blockchain.

This shift toward digital equity issuance is not just a trend—it’s a transformation. Equity tokens are redefining ownership, cap table management, and investor engagement for early-stage ventures. And with the right infrastructure, STOs can be compliant, accessible, and easily tradable.

In this article, we explore how STOs and equity tokens are shaping the future of startup fundraising—and how ONINO’s platform makes launching a compliant equity token offering easier than ever.

What Are Equity Tokens?

An equity token is a digital representation of a company’s shares, recorded and transferred on a blockchain. Each token confers the same rights as traditional shares—ownership, dividends (if applicable), and voting rights—but in a programmable, efficient format.

This is not to be confused with utility tokens or crypto coins. Equity tokens are securities—meaning they are subject to regulation. But unlike traditional paper shares, equity tokens live on-chain and can be:

• Fractionalized (investors can buy small units)
• Easily issued and transferred
• Traded in real time on compliant secondary markets

What Is a Security Token Offering (STO)?

A Security Token Offering (STO) is the process of raising capital by offering equity tokens (or other tokenized securities like debt or convertible notes) to investors. STOs combine the best of two worlds:

• The compliance and investor protection of traditional securities offerings
• The efficiency and programmability of blockchain technology

In contrast to ICOs or crowd-investing platforms, STOs operate under clear regulatory frameworks and typically involve KYC/AML processes, investor whitelisting, and legal structuring.

For startups and SMEs, this means they can:

✅ Raise equity online

✅ Stay fully compliant with securities law

✅ Offer investors more flexibility and transparency

✅ Potentially enable future trading of equity tokens via licensed secondary marketplaces

Why STOs Are Game-Changing for Startup Equity

Here’s how equity token offerings are revolutionizing startup financing:

1. Simplified Cap Table Management

Each equity token is uniquely traceable. Every transaction is recorded immutably on-chain, removing the friction of spreadsheets, transfer agents, and notary paperwork. This means instant, auditable updates to ownership records.

2. Automated Compliance

With programmable smart contracts, companies can embed compliance rules—such as transfer restrictions, voting rights, and dividend payouts—into the token itself. Investor onboarding includes automated KYC and regulatory checks.

3. Fractional Ownership

Unlike traditional fundraising that often requires large ticket sizes, equity tokens can be fractionalized, allowing broader participation from smaller investors across the EU and beyond.

4. Global Investor Access

Through tokenized offerings, startups can tap into a wider investor base, reaching beyond local angel networks or VC circles to engage global backers in a compliant way.

5. Potential Liquidity Through Secondary Markets

Equity tokens can be designed for secondary market trading, allowing investors to exit earlier than traditional equity structures permit—especially valuable in the pre-exit phase of startups.

ONINO: Powering Compliant Equity STOs in the EU

While the benefits of equity tokenization are immense, the challenges around technical setup and legal compliance have kept many startups from exploring STOs—until now.

The ONINO Tokenization Platform simplifies the entire equity STO lifecycle:

🔹 No-Code Equity Token Issuance

Create compliant equity tokens in minutes—no developers or blockchain knowledge needed. Configure your offering (e.g., shares, voting rights, vesting rules) through an intuitive interface.

🔹 Automated Legal & Investor Onboarding

ONINO includes built-in KYC/AML verification, investor whitelisting, and customizable documentation workflows. Stay compliant with EU and national securities laws while minimizing overhead.

🔹 Smart Contract Infrastructure

Our platform generates audited smart contracts that govern your equity token rules, transfers, and compliance logic—removing human error and saving time on future rounds.

🔹 Secondary Market Readiness

Equity tokens issued via ONINO can be designed for future trading, giving investors liquidity options and making your offering more attractive.

🔹 Whitelabel STO Portals

Want to host your own branded STO portal? ONINO’s white-label solution enables you to offer equity tokens directly to investors under your own name—while ONINO handles the secure backend.

STOs Are the Future—And the Future Is Now

Security Token Offerings are no longer theoretical. With investor appetite for transparency, liquidity, and diversification on the rise, STOs provide a compelling path forward for startups seeking capital—and for investors seeking compliant exposure to early-stage innovation.

As regulations across the EU become more crypto-asset-friendly (with MiCA and pilot regimes paving the way), the time is now for founders to embrace equity tokenization as a core fundraising strategy.

Book a demo of the ONINO platform today to learn how to launch a compliant equity STO for your company.

👉 Get started here

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