Why do Startups Create Security Tokens for Fundraising?

Why do Startups Create Security Tokens for Fundraising?

In the crypto industry, security tokens and utility tokens are the two major types of crypto tokens. Of these, security tokens possess a high level of securitization and popularity. In fact, security tokens are a secured form of crypto tokens that derives their value from any tradable external assets. It is developed using popular blockchain token standards and it holds some underlying assets such as real estate, gold, or silver. 

While speaking of security tokens, it has three main types of security tokens. They are Debt tokens, Asset tokens, and equity tokens. Each includes its own features and benefits based on the type of asset. So the value of the token is determined by the particular asset that is backed. Hence, creating security tokens is completely regulated, has very high compliance, and also no risk for investors. 

Benefits of Creating Security Tokens - 

  • Fractionalization of larger assets 
  • Increased liquidity 
  • Interference of SEC laws 
  • Lower issuance cost 
  • High marketability 
  • Global capital investment 
  • Scalability and efficiency 
  • Transparency 

When startups or entrepreneurs are launching their STO platform, they should create security tokens. These token values will raise based on the popularity and strength of the underlying platform. These tokens allow startups for trading, investment, or crypto fundraising for their business growth. 


Security tokens are mostly made using secure smart contracts with the guidance of the SEC government. Are you a startup, you can develop an STO platform for the initial stage of development of your business. With the proper assistance of an eminent Security Token Development service provider in the crypto industry, you can create your own security tokes securely. Their experienced developers will make your security tokens with all essential and latest features at an affordable price. Find the best provider to initiate your crypto business.