Small and medium enterprises raise funds today much like they did centuries ago
They waste hundreds of hours and thousands of dollars pitching to brokers, many of whom automatically pass because they don’t have the right investment profile
Tokenization technology is set to change all that, building on the convenience and speed of the ICO boom in 2017 to enable safe, compliant tokenized private placements as well as fast connections to the right broker and accredited investors at the right time
Click here to stay informed on news about Blockstation’s upcoming Tokenized Private Placement solution
By: Marko M. Hafez, Co-Founder and President
If you run a small or medium enterprise (SME), then this should be a familiar story: you start a new fundraising round and find what looks like the perfect broker, one whose investment profile matches your industry, funding goals, growth stage, and more. So you spend hours preparing and delivering a presentation deck, only to have the broker walk away, taking their pool of accredited investors with them.
You’re pre-revenue, and the broker doesn’t deal with those opportunities. Exactly the kind of misunderstanding that causes business-owners like you, as well as brokers, to waste hundreds of hours per year on pitches that will never see the light of day.
It’s frustrating when antiquated processes that haven’t really changed in decades get in the way of your next term sheet. Which is why it’s worth taking another look at tokenization, the technology behind the Initial Coin Offering (ICO) boom of 2017.
What the boom showed us was that tokenization broke down barriers between SMEs and the investors they needed to reach. It also demonstrated the need for a purpose-built solution that helps SMEs conduct their offering with the blessing of securities regulators.
Why Tokenize Private Placements?
We saw the benefits of tokenization technology with the explosion of ICOs in 2017. Issuers were able to mint digital tokens representing equity in or access to their products and sell those tokens directly to investors on dynamic (but unregulated) marketplaces.
Growth was explosive. By some estimates, there were almost 500 ICOs grossing over $5.5 billion USD. Securities regulators cracked down hard, however, and the hype died down almost as quickly as it developed.
Since then, the concept of Security Token Offerings (STOs) has emerged, legitimizing the idea of an ICO. The idea of a digital token representing equity in bona fide securities, adhering to all the relevant regulations while still connecting SMEs to the accredited investors they need, is fueling a new tokenization boom.
SMEs now have the ability to conduct a fully tokenized private placement, connecting with the right broker and accredited investors for their raise more quickly, efficiently, and easily than ever before.
Introducing the Blokstation Tokenized Private Placement Solution
Blockstation’s Tokenized Private Placement Accelerator is one of the first solutions to provide comprehensive, end-to-end support for your capital raise. Built on the same technology used by stock exchanges to list and trade tokenized securities on the secondary market, our private placement solution is ideal for SMEs looking to conduct a capital raise at any stage of business development
Set to launch later this year, its features include:
Smart matchmaking engine takes the guesswork out of deciding which brokers to target, pairing you with the best matches for your offering’s investment profile - saving hundreds of hours on manual research, meetings, and wasted pitches
Instant access to a deep pool of accredited investors and global capital (including accredited investor verification services)
Fast private placement memorandum generator with a comprehensive library of easy-to-customize content to create compliant disclosure documentation in hours
End-to-end lifecycle support for tokenization, issuance, management, reporting, and corporate actions - including eventual transition to secondary trading on a national stock exchange
Tokenization is the New Term Sheet Template
Capital markets today are fundamentally the same as they were centuries ago. It’s time to shake them up for the better.
Blockchain technology is the key, enabling tokenized raises that empower SMEs to access the capital they need to grow faster than ever - and Blockstation is proud to offer a powerful new solution to meet that need.
What do you think? Are Tokenized Private Placements the future of capital raises for SMEs? Let us know on social media using the hashtags #Blockstation #TokenizedPlacements.
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This content is for informational purposes only. You should not construe this content as legal, tax, investment, financial, or other advice, nor as a solicitation, recommendation, endorsement, or offer by Blockstation or any associated third party to buy or sell any securities or other financial instruments in any jurisdiction in which such solicitation or offer would be unlawful under the applicable securities laws. All Content is information of a general nature and does not address the circumstances of any particular individual or entity, nor does it constitute professional and/or financial advice, nor does it constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. Blockstation is not a fiduciary by virtue of any person’s use of or access to content. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of the content before making any decisions based on such content.