Marvin Steinberg is a German entrepreneur and businessman who has also founded CPI Technologies. In recent years, Steinberg has entered the blockchain technology industry after his success in leading the German energy startup sector and now he is a leading advocate of Security Tokens Offering (STOs). Steinberg predicts that STOs will be the alternative to initial coin offerings (ICOs) for worldwide startups.
We had the opportunity to interview Marvin Steinberg and learn about the future of STOs and CPI Technologies.
Mr. Steinberg, you are familiar to the public as a blockchain technology entrepreneur but you have also managed to break into the German energy sector. What can you tell us about that?
As a start-up in the energy sector, we had developed a flexible approach and were able to react more quickly to customer behavior than our competitors. That was our main key to success. While German companies in the energy-sector kept their customer engagement offline and did not make the adjustments to move forward with technological development, we operated marketing and customer acquisition online and offered clients a new way of services in one of the most of the most traditional industries in global markets.
You had great success in the German energy sector. Why and when did you decide to explore new opportunities in the blockchain industry?
I have received a generous offer to sell my company which allowed me to hold a stake in its future earnings. That enabled me to enter a new market and explore new opportunities as an entrepreneur. My first thought was to enter the blockchain industry and then I founded CPI Technologies. Once I have realized that blockchain technology can not only be used as an innovative coin to transfer funds but also as a fundraising technology for startups, it was undoubtedly the market that I want to be part of.
Steinberg explains to us why he believes STOs are the future of the cryptocurrency market and is the next evolution of fundraising: “Today, scores of providers are trying to sell sub-par solutions based on false assumptions that over-promise, but under-deliver. Since the demand for STOs is rising at an incredible rate, a lot of companies fall into this trap, just because they’re afraid to miss out on the action.”
Can you explain to our readers in simple terms what is Security Tokens Offering (STOs)?
Security Tokens Offering are blockchain-based tokens and are tradable financial assets, the same as a company share or a corporate bond. Whenever a certain company decides to go public and raise capital in the traditional way, it can always be done through an initial public offering (IPO) on stock exchanges. However, Initial Public Offering is an extremely complicated process and has requirements that startups and small companies cannot meet.
As a result, companies can raise funds through the crypto market. It was first possible through Initial Coin Offering (ICO) which revolutionized the market when it first introduced, however, there were risks involved with the lack of regulations around ICOs, both for the companies and for investors. STO’s, on the contrary, are regulated and have fewer requirements for startups. That leads to a great fundraising tool for small companies and a rewarding investment for startups investors.
As a leading expert of STOs, why do you think Security Token Offering will be the next fundraising method to replace ICOs?
Unlike ICO, STO tokens are backed by financial assets and allow investors the benefits of equity shares of the company and dividends. But the major improvement of STO is that it is simply a safer investment. That means that large scale financial institutions will not have any concern to invest in startups through STOs, which will also attract individual investors.
Steinberg has co-founded CPI technologies GmbH in 2016 with tech-wizard Maximilian Schmidt, a company offering white label STOs solutions for start-ups and medium-sized companies. The company is expected to launch a $700M STO of asset-backed tokens in 2020 that will allow investors to put their money on some of the most prime real estates at Times Square.
“We have a proven record in helping more than 40 projects through CPI Tech. CPI has completed over 40 projects and its upcoming flagship venture is a $700M tokenization of a part of Times Square itself. These figures speak for themselves and demonstrate the massive potential for security tokens, which are far newer than utility tokens but are still making massive strides to overtake even the best times seen by utility tokens”. Steinberg said.
Mr. Steinberg, how can any company use CPI Technologies to get STO solution and raise funds?
Well, CPI Technologies can tokenize every product or service in order to raise money. However, there are some basic requirements and the process to raise funds through STO is not that simple. A company must choose the right STO type, the jurisdiction area and there are additional legal requirements that a company has to complete before it is able to offer tokens.
We developed the 7 stages of launching a successful STO. Those include the choosing an STO type and a jurisdiction, setting business structure, model and goals, taking care of the legal part and risks, setting up the smart contract on the blockchain, setting up the STO dashboard for the token sale, launching the STO and informing the investor network, and executing marketing strategy to convert more investors.