9.10 : Alternative Security Offering Methods

Apart from traditional methods like Initial Public Offering (IPO) and Initial Coin Offering (ICO), various alternative security offering methods exist for companies to raise capital. These methods provide flexibility, reduce regulatory burdens, and offer diverse investment opportunities.

1. Security Token Offering (STO) – 
   STOs are similar to ICOs but are backed by real-world assets like equity, real estate, or company profits. They are fully regulated and provide legal protection to investors.
2. Equity Crowdfunding –
   It allows startups and small businesses to raise funds from many investors online. Investors receive shares in return, making them part-owners of the company.
3. Private Placements – 
   Companies sell securities directly to a select group of private investors, such as venture capitalists or institutional investors, without a public offering. This method is less regulated and faster than an IPO.
4. Debt Offerings (Bonds & Convertible Notes) –
   Companies issue bonds or convertible notes instead of selling equity, which investors can later convert into shares. This is a safer option for investors, as they receive fixed interest payments.
5. Direct Listings – 
   Companies list their shares on a stock exchange without issuing new ones, allowing existing investors to sell their stakes without dilution.

These alternative methods help businesses raise funds efficiently while offering investors more choices.