How to Structure Your STO to Stay Compliant with the SEC
Structuring a Security Token Offering is not just about creating a token—it’s about aligning legal, technical, and compliance systems.
This is where most founders struggle.
What Structuring an STO Means
You must align:
- Legal structure
- Token design
- Compliance framework
Step 1: Define the Underlying Security
Decide what investors receive:
- Equity
- Debt
- Revenue share
- Fund interests
Step 2: Choose the Right Entity Structure
Common structures include:
- SPVs
- Holding companies
- Fund entities
These help manage risk and investor organization.
Step 3: Align Token Design with Legal Reality
Tokens must reflect actual legal rights and enforce rules programmatically.
Step 4: Build Compliance Into the Systems
Includes:
- KYC / AML
- Accreditation verification
- Transfer restrictions
- Recordkeeping
Step 5: Plan for Distribution
Determine how investors will access your offering and whether intermediaries are required.
Step 6: Think Beyond the Raise
Plan for:
- Reporting
- Investor relations
- Ongoing compliance
Common Mistakes
- Starting with technology
- Misaligned token and legal structure
- Ignoring distribution
- Treating compliance as a checklist
Final Thoughts
Successful STOs require alignment across all systems.
Want a Proven STO Structure?
Inside the foundation, we help founders design and execute compliant STO structures.
