How to Tokenize Start-up Equity: A Founder Friendly Guide

Tokenizing startup equity means converting ownership shares into digital tokens on a blockchain. Using a tokenization platform, founders can raise capital more efficiently while offering investors access to tokenized shares that are secure, programmable, and tradeable. In this guide, we explain how to tokenize equity step by step, covering the benefits, compliance, and launch process.

What Is Equity Tokenization?

Equity tokenization transforms traditional shares into digital securities managed by smart contracts on a blockchain. These tokenized assets can be sold via a security token platform, giving investors fractional access and startups a new, flexible way to fundraise.

Benefits of Tokenized Fundraising

For founders:

• Raise capital globally with fewer intermediaries
• Lower costs and faster issuance than traditional equity rounds
• Built-in compliance, governance, and cap table automation

For investors:

• Transparent, fractional access to startup equity
• Real-time ownership tracking on-chain
• Potential for secondary trading on regulated platforms

How Tokenized Equity Works

Startups issue equity tokens via a tokenized asset issuance process using a blockchain tokenization platform like ONINO. Tokens can represent voting shares, preferred equity, or convertible rights. Smart contracts automate transfers, compliance, and ownership tracking.

Step-by-Step: How to Tokenize Equity

1. Strategic Planning

• Decide on % of equity to tokenize and fundraising goal
• Outline investor rights (voting, dividends, etc.)
• Draft terms with legal advisors

2. Choose a Tokenization Platform

Look for:

• Built-in KYC/AML and compliant tokenization workflows
• Support for EVM compatible blockchain
• Tools like tokenization SDKs and whitelabel tokenization solutions

3. Create & Deploy Tokens

• Use platform UI or smart contracts to create tokens
• Assign token rights and restrictions (e.g., lockups)
• Enable investor onboarding through a primary token offering platform

4. Launch Offering

• Market the raise via secure channels
• Onboard investors with KYC verification
• Accept fiat/crypto payments and distribute tokens

5. Post-Raise Management

• Maintain token cap table via tokenized investment platform
• Share updates, issue dividends, and enable voting via smart contracts
• List tokens on secondary markets (if applicable)

Legal & Compliance Overview

Tokenized equity must follow securities laws. In the EU, MiFID II tokenization applies; in Germany, tokenized shares may fall under the eWpG. Platforms like ONINO offer regulated tokenized assets compliant with security tokens EU frameworks.

Key compliance elements:

• KYC/AML enforcement
• Whitelist-only transfers
• Investor documentation (PPM, T&C, etc.)

Real-World Examples

• Early-stage startups raising via STOs in Germany
• VCs tokenizing equity positions for secondary liquidity
• Community-backed companies offering revenue-sharing equity tokens

Why Now?

With increasing regulatory clarity and maturing infrastructure, startups now have access to tools that make tokenization feasible. ONINO provides a full-stack asset tokenization platform to help founders launch compliant, tokenized equity offerings—without deep technical knowledge.

Conclusion

Tokenizing equity gives startups a modern fundraising method—offering speed, transparency, and access. With tools like smart contract tokenization, fractional ownership, and integrated compliance, founders can reach global investors and maintain more control.

Ready to tokenize your startup's equity? Book a demo with ONINO to explore your options.

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