In a Security Token Offering a business offers the investors a percentage of the business’s future profits in exchange for a capital investment.
In its simplest form, the security token is an investment contract that participates in the cash flow, after the costs of running the business are paid.
Each investment contract will be different. The offering memorandum will explain the business and the potential economic benefits of participating as a security token holder.
NOTE: Cash flows and future profits are not guaranteed.