Self-directed investing services are immensely popular because they allow investors to cut out the middleman.
Unfortunately, when it comes to investing directly in private equity, it’s not so easy - private firms often go through individual brokers, and investors may lack the necessary relationships to take advantage
Tokenization and blockchain technology can change that, building on the growth of Security Token Offerings (STOs) to enable fast, easy investments in Tokenized Private Placements
Sign up to receive updates on the Blockstation Tokenized Private Placement Accelerator, scheduled for launch later this year
By: Marko M. Hafez, Co-Founder and President
Nobody likes a middleman, particularly when it comes to their money. The popularity of self-directed investing services like Questrade and Robinhood for mutual funds and publicly traded stocks is proof of that.
But when it comes to buying shares in privately held companies, the middleman is hard to get around. There’s just no easy way to find and access these opportunities directly, leaving independent-minded investors at the mercy of brokers and pooled funds.
That’s why blockchain and tokenization technology are so exciting. The ICO boom in 2017 proved that there was a market for issuers to connect directly with investors, and the technology proved itself capable of processing transactions quickly and efficiently.
Fast forward three years, and many of the ingredients for safe, successful direct investing in private equity through the blockchain are here. Tokenized Private Placements through Blockstation have arrived, putting control of private equity investing directly in the hands of investors.
The Top 4 Reasons to Get Excited for Tokenized Private Placements
Low fees for international investing
Hefty wire transfer fees can restrict small investors with a low budget to their domestic market. In comparison, blockchain technology allows them to send funds via digital assets like Bitcoin and Ether for just pennies, meaning more people can afford to purchase cross-border equity.
Dividends will become more common
With legacy technology, it costs a lot to administer the payment of dividends. Many small and medium enterprises (SMEs) with revenue who might be willing to pay dividends often decide not to purely as a result of these fees.
The blockchain streamlines many administrative processes like cap table management and shareholder communication, putting dividends within reach for many more issuers than ever before.
The upshot? Investors can expect more opportunities to purchase private equity that pays.
Crowdfunding for serious investors
People used to say that LinkedIn is what happens when Facebook goes to college. In the same way, Tokenized Private Placements take the Kickstarter concept - a marketplace for businesses to raise funds directly from customers in exchange for early access and other perks - and apply it to private equity, no middleman required.
Blockstation is one such solution, launching later this year to open a world of new opportunities for investing in private equity.
Peace of mind
The Blockchain keeps a full, immutable record of all transactions and participants, so you can verify who you’re investing with and keep track of your shares, while smart contracts auto-enforce compliance with rules that prevent many kinds of abuse- all to ensure a fair marketplace.
The Blockstation solution, launching later this year is like crowdfunding for private equity. It’s a powerful new marketplace that gives investors the power and independence to connect directly with issuers who meet their needs, and take control of their assets.
Tokenization will Transform Private Equity
What do you think? Will tokenization change the way you invest in private equity? Let us know what you think of Tokenized Private Placements on social media, join our Telegram group to keep the conversation going.
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