Equity tokenisation, also spelled equity tokenization, means recording a company's shares as digital tokens on a blockchain or other shared ledger, so they can be held, transferred and managed digitally. The shares themselves do not change. They carry the same rights and the same rules as before. What changes is the administration: how shares are issued, recorded, transferred and settled.

Digital securities, also called security tokens, are ordinary financial instruments such as shares, bonds or fund units that are issued or recorded on a blockchain or shared ledger. They are not cryptocurrencies. A security token gives the holder rights against an issuer, such as dividends or repayment, and it is regulated as a security.

A security token offering is a fundraise in which a company issues digital securities to investors. In the UK an STO is treated as a securities offer. The financial promotion rules apply, the offer usually runs through an FCA-authorised platform or is limited to exempt investors, and a prospectus may be needed depending on the size and audience of the offer. It works more like a regulated share placing than a crypto token sale.

Real-world asset tokenisation, also spelled tokenization, puts assets that exist off the blockchain onto a ledger as tokens. These include shares, loans, fund units, property, commodities and invoices. The term separates tokens backed by an identifiable asset from cryptoassets that exist only on a blockchain. In the UK the most active areas are money market fund units, gilts and other debt, and gold. Private company shares are a smaller but growing area. Tokenising Startups covers all of these, with a focus on equity.

Both can raise money from the same investors under the same promotion rules. The difference is what the investor ends up holding. Crowdfunding investors usually hold shares through a nominee, with few practical ways to sell. Tokenised equity records the holding on a ledger built to support transfers, which is why easier resale is the main argument made for it.

Not by itself. A token makes a transfer technically easier, but a sale still needs a buyer, a venue allowed to run the market, and a way to settle the trade. In the UK those venues mostly sit inside the Digital Securities Sandbox or existing regulated markets. Private company shares are also limited by the company's articles, pre-emption rights and transfer restrictions, and tokenising them does not remove those limits.

A distributed ledger is a shared database that many computers keep copies of and update together, so no single party controls the record. A blockchain is the best-known type. It groups records into blocks linked in order, which makes past entries very hard to change without anyone noticing. In tokenisation, the ledger records who holds which asset and moves those holdings from one person to another.

A smart contract is a small program stored on a ledger that runs automatically when set conditions are met. In tokenised shares it can enforce rules from the company's articles, such as blocking transfers to people who have not passed identity checks, or paying a dividend to every holder at once. It does not replace the legal documents. If the code and the articles disagree, the legal documents normally decide.

A cap table, short for capitalisation table, shows who owns what in a company: shares, options and convertible instruments. A tokenised cap table keeps that information on a ledger, so issuing shares, recording transfers and handling events such as dividends can happen digitally and in one place. A UK company must still keep its statutory register of members up to date alongside it.

It makes small holdings easier to record, because a ledger can track very small units. But company law and the company's articles decide what a share is, and true fractional shares are uncommon in UK private companies. Fractional exposure is usually created through a nominee or fund that holds whole shares and issues tokens representing parts of them. That adds a layer between the investor and the company, which can affect voting and other rights.

A tokenised money market fund is an ordinary money market fund whose units are issued or recorded on a ledger. Investors get the same exposure to short-term, low-risk debt, but units can move and settle faster, and some firms use them as collateral. They are among the most active tokenised products in the UK, used mainly by institutional investors, and the Digital Securities Sandbox allows money market fund units to be tokenised.