Founders usually ask which structure is best.
The better question: what trade-offs are you willing to accept?
Every fundraising structure involves compromises. Here they are, structure by structure.
Equity only: clarity vs constraints
What you gain:
- Regulatory simplicity
- Immediate institutional credibility
- Clean cap table for future rounds
What it costs:
- Locked into VC timelines (7-10 year exits)
- No way to reward your community pre-liquidity
- Single investor type = concentrated risk
When it’s the right choice: businesses without critical network effects, pure R&D plays, sectors where VCs dominate (DeepTech, BioTech).
Tokenomics only: speed vs complexity
What you gain:
- Earlier liquidity, where the token can lawfully trade
- Accelerated network effects
- Global investor base
What it costs:
- Frameworks are still moving: MiCA entered into force in June 2023 and applies in phases; the SEC and CFTC issued a joint token taxonomy in March 2026
- Classification depends on facts and circumstances, and can change as the project evolves
- Volatility means constant distraction from product-building
- Hard to attract traditional institutional VCs
When it’s the right choice: rarely, and mainly for Web3 infrastructure where the network itself is the product.
Hybrid: flexibility vs complexity
What you gain:
- Diverse investor base (VCs + community)
- Incentives for network participants alongside equity for the company
- Flexible liquidity timelines
What it costs:
- Managing two regulatory frameworks simultaneously
- Equity investors often ask for rights to future tokens, which the token table then has to account for
- Poorly calibrated tokens can cannibalize equity value
When it’s the right choice: FinTech and Web3 platforms with real network effects, narrow cases such as data networks in MedTech, and investors comfortable with dual structures. The two tables then have to stay consistent, as we set out in When the token table and the cap table tell different stories.
What actually decides it
Skip what’s trending and ask:
- Who are your natural investors?
- What’s your liquidity horizon?
- Does your community require on-chain incentives?
- Do you have the resources to handle the complexity?
At AYAKO Partners, we audit these dimensions before recommending a structure.
Sometimes the answer is pure equity. Sometimes it’s hybrid with limited utility tokens.
Rarely, token-only. But always according to your vision, not ours.
Frequently asked
Are most tokens automatically classified as securities?
No. Classification depends on facts and circumstances, and can change as the project evolves. In March 2026 the US SEC and CFTC issued a joint interpretive release establishing a five-category token taxonomy (digital commodities, digital collectibles, digital tools, stablecoins, digital securities), under which many crypto assets are not treated as securities.
How often do crypto regulations change?
Frameworks are still moving, but on a multi-year timeline rather than every few months. In the EU, MiCA entered into force on 29 June 2023 and applies in phases: stablecoin rules from 30 June 2024, full CASP regime from 30 December 2024, with national transitional windows until 1 July 2026. In the US, the SEC and CFTC issued a joint token taxonomy in March 2026.
What actually determines whether a token is a security?
The economic reality of the project: how value is generated, how the token is distributed, and the rights and expectations of holders. Regulators assess facts and circumstances, and the classification can evolve as the project and its use cases develop.
Sources and references
- European Union: ESMA, Markets in Crypto-Assets Regulation (MiCA). Entry into force 29 June 2023; stablecoin rules from 30 June 2024; full CASP regime from 30 December 2024; national transitional windows until 1 July 2026.
- United States: SEC and CFTC joint interpretive release, 17 March 2026, establishing a five-category token taxonomy. See also SEC, Crypto Assets.
- France: AMF, digital asset service providers and ICOs.
- Venture fund lifecycles: a standard venture fund term is ten years, which sets the seven to ten year exit horizon referenced above.
- AYAKO Partners internal analysis.