I am going to take the opposite side of this argument. Too many people are promoting STO’s with absolutely no understanding of the hazards involved.
No company with under US$10 million in revenue/year has any business even considering launching as a regulated security. Having previously had a company destroyed by trading on the OTCBB, I have great experience in what happens to small cap companies that allow themselves to be traded on markets. If your token has any liquidity at all, sophisticated investors will find that they can make more money by killing your business quickly than the believers will have stomach for over the long term. You don’t need STOs for this. Just look at penny stocks. These are the kinds of psychopathic traders you are going to be exposed to, and they have absolutely no concern about you. To them, you and your company are just disposable resources.
Unless you have fantastic revenues to fend off an attack, you are going to be destroyed. It is one thing when this happens on a utility token, but when this happens on a security token which is tied to your company, you will quickly find the regulations disallow many options from escaping from this trap and your ability to raise money is severely compromised. You will be forced into toxic financing which results in a death spiral.
I find it inexcusable that many advisors with no experience in small cap securities are advising startups to do tradable securities via STOs. This is an absolutely horrible idea, and will definitely lead to advisors themselves needing to be regulated. The damage to the industry is going to be an order of magnitude worse than the relatively minor damage done from scams in utility ICOs
STO’s are not the answer. That light you think you see is actually a train coming at you.