Important Questions for Builders

Here are some of the important questions that builder should try to think about before working on a RWA offering

Business

1. Issuer Type and Objective

   • What kind of issuer are you? (startup, asset holder, novel issuer)

   • What are your business objectives? (fundraising, strategic objectives)

2. Target Audience

   • Whom are you selling the tokens to? (U.S. or non-U.S., accredited or non-accredited, institutional investors or retail)

   • What are the limitations on investor participation in the RWA offering?

3. Tokenization Focus

   • Which part of the business/capital structure should be tokenized?

   • Are there other sources of capital, and how do they interact with the tokenized offering?

4. Equity and Rights

   • If tokenizing equity, what rights are included with the token? (voting, dividends, future cash flows)

   • Are there special rights bundled with the token not typically included in a security offering?

Legal

1. Marketing and Promotion

   • How will you market the RWA offering? Will general solicitation be used?

2. Asset and Token Linkage

   • How is the underlying asset being tokenized linked to the token?

3. Corporate Structure and Compliance

   • What is the optimal corporate structure for the issuance?

   • What are the primary issuance and secondary trading regulations to consider?

4. Legal Framework

   • Which exemptions from registration will be utilized? (e.g., Rule 506(c) of Reg D, Reg S)

   • What are the applicable resale restrictions and the impact of state laws?

Tech

1. Secondary Trading and Compliance

   • How will secondary trading restrictions be enforced?

2. Post-Issuance Operations

   • How are dividends or interest paid out to token holders?

   • How are lost tokenized shares handled?

   • How will voting be conducted, and how are regulatory reporting and other post-issuance compliance functions managed?