As far as i know STO ( Security Offering ) is a type of investment in form of cryptocurrency but is backed by physical and tangible assets like land, building and machineries unlike ICO that is not so tendecy are developer will just lie that funds are already wasted and nothing to spend and will run afterwards.
You have made the best point here so far. STOs have working products already in place which the tokens will support. ICOs are just filled with lies. You will never be sure what the funds raised are used for. The team just use it to enrich themselves.