The birth of any new technology acts as a catalyst for a new industry. When the global internet was born a few decades ago, few predicted the rise of social media marketing, front-end development, backend outsourcing, and UI designers needed to create the tools and platforms that are now commonplace.
Similarly, the growing use of blockchain technologies for the creation of digital assets and crypto tokens has helped create a cottage industry full of talented professionals filling the gaps for startups from across the world. Every project now requires a team of smart contract developers, cybersecurity specialists, and content creators with experience and a deeper understanding of the emerging technology.
Perhaps the most fascinating service provider in this new ecosystem is the STO marketing agency – a niche service provider that enables startups and enterprises to market their security tokens to qualified investors. Here’s a closer look at what these firms do and why their rise could be indicative of an evolving capital market:
New forms of funding
A security token offering (STO) is the issue of blockchain tokens that represent regulated securities like stocks and bonds. In other words, it takes regular financial instruments are codes them into a blockchain platform so that investors can buy and sell these instruments with the ease and convenience of Bitcoin.
The underlying security, however, remains the same. This means all the rules and regulations associated with startup funding, venture capital, and angel investing still apply. This places certain restrictions on the way the issuing firm can communicate with potential investors. Startups and businesses looking to raise funds through STOs are better off outsourcing the marketing strategy to a team of specialists who understand financial regulations and blockchain technology on a deeper level.
A specialist STO marketing agency usually includes an experienced developer, financial analyst, legal expert, and crypto industry insider with a wide network. The team needs to have a network of potential institutional investors and access to developer conferences and investor summits where these niche financial products are discussed.
These agencies also need talented professionals who can create content and generate excitement for an upcoming fundraise through a mix of traditional and cutting-edge digital promotion techniques.
Such a mix of skills and talent is rare, but with the growing interest in STOs more marketing firms have pivoted to the industry in recent years. According to data from Inwara, nearly a hundred STOs were issued in 2018 and a lot more are scheduled for 2019.
Daniel Masters, the Chairman of crypto investment provider CoinShares and a former JPMorgan trader, recently told a group of bankers and investment professionals that the STO market may have crossed $1 billion last year and could be worth as much as $2-3bn by the end of this year.
With billions at stake and growing awareness in investment circles, it seems it is only a matter of time before more entrepreneurs and enterprises consider issuing their stocks and bonds on a blockchain platform. With the growth of this new form of funding, the services of a STO marketing agency may become more critical over the near-term.