Neufund, Swarm cryptocurrency startups bring equity to the masses
Vive la technological revolution.
There are more venture capital (VC) funds than there are startups these days, Binance CEO Zhao Zhangpeng recently joked. He might be right if you count all the grown-up crypto companies that are using their December wealth to sprout venture capital arms and invest in other companies.
And why not? There's good money in investing, and equity in particular accounts for some of the highest returns of any asset class by some measures.
The catch is that companies just don't go public like they used to, and it's looking like most main-street investors will never get a piece of the most promising pies. In fact, 2016 was the worst year for IPOs (initial public offerings) since the Great Depression – the one almost a century ago, not the more recent one.
This is turning into quite a problem, as SEC head Jay Clayton has noted, that is largely locking retail investors out of one of the most promising asset classes around, even while rising housing prices start slamming the shutters down on real estate investment opportunities for many more.
It might not be a coincidence that after paddling along for almost a decade, cryptocurrency and ICOs exploded in 2016 and 2017 – right when main-street speculators were more desperate than ever for alternative investments.
The circle is coming back around though with a range of cryptocurrency startups focused on fractional investing and making these asset classes more accessible for everyone.
Fine art on the blockchain, exotic cars on the blockchain and fractions of investment properties on a central non-blockchain database are all in the works. And as of just today, it's even possible to find tokenised portions of Dash masternodes separately available on Swarm Fund.
And now there's also private equity on the blockchain.
You can't force companies to go public, but you can build a much more thriving and open secondary market, with some legal legwork.
Liberté, équity, fraternité
Several companies are now tokenising private equity to make it accessible to main-street investors. The previously mentioned Swarm recently got hit with a cease-and-desist demand from Coinbase for selling second-hand Coinbase equity it had scrounged up from VC firms and employees but remains undeterred.
German crypto firm Neufund is taking it a bit slower by only selling startup equity with the company's permission and trying to ensure that everything's done as legally as possible on all ends.
It's so far attracted six companies that have agreed to tokenise equity through Neufund, and Neufund expects to announce more in the coming weeks. They range from one of the approximately ten billion bike share companies in the world to the Uber of used electronics, and all of them have very trendy names.
You'll have to judge for yourself whether any of them are a good idea, but on the whole, it's safe to say these kind of equity tokenisation models are probably an important step in the right direction for greater economic equality and sustainability around the world.
In the words of the press release:
- "Brille24: Brille24 is a Eyewear pioneer and aims to change the way people access eye care by making it convenient to purchase glasses online thanks to smart ai-applications. Founded 10 years ago, Brille24 has sold more than 2 million glasses and is currently serving one million customers. The company was founded in 2007 in Oldenburg, Germany and currently operates online stores in Belgium, France, Netherlands, Portugal, Poland and Spain. The current CEO is Christophe Hocquet and the Managing Director is Johannes Korves."
- "Uniti: Uniti is the Swedish electric car startup offering what CNBC has called 'the car of the future.' Safe & affordable EVs with premium technology and a progressive design. It was founded in 2016 by Lewis Horne, with the first deliveries expected in 2019."
- "mySWOOOP: mySWOOOP is an omni-channel re-commerce platform that buys and sells new and used electronics. With tailored software technology, mySWOOOP automatically determines current market prices in real-time assuring attractive resale-margins. mySWOOOP was founded in 2011 by Benjamin Gabriel, Simon Gabriel and Jan-Lucca Sielski."
- "Next Big Thing: Next Big Thing is Europe’s premier startup incubator for IoT & blockchain ventures and Germany’s chosen Digital Hub for IoT, driving European innovation. Next Big Thing leverages its technological and economic ecosystem to enable disruptive business models. It was co-founded in 2016 by Harald Zapp, Michael-Maria Bommer, and Maik Käbisch."
- "Emflux Motors: Emflux Motors is an electric superbike company changing the landscape of transportation & mobility. It is an India-based venture backed by both crypto and traditional investors with a mission to power 10 million electric bikes globally by 2027. Emflux Motors was founded in 2016 by Varun Mittal, Ankit Khatry, and Vinay Raj Somashekher."
- "BlockState: BlockState is a company creating products for the future of finance. BlockState builds efficient, transparent and compliant products for asset management, debt issuance and derivatives based on blockchain technology. It was founded in 2017 by Michael Weber and Paul Claudius."
Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VET, XLM, BTC and XRB.
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