Creating the first RTF — Reverse Tokenized Fund
The 22x Fund was conceived as batch 22 of 500 startups was starting. It was in the midst of the height of 2017’s ICO flood, and everyone was deep in discussions on the nature of the changing landscape of fundraising. We decided to make our mark too. Every participating company will give equity to a newly created fund. The 22x Fund. Together this fund could be tokenized and thus we will all fundraise together. The holdings of the investors could be then traded. We then embarked on a journey to figure it all out.
One of the biggest issues with current tokens were their actual meaning. Most tokens are “utility tokens” and as such on the one hand claim to have a utility in the project, and on the other hand their regulatory status is also somewhat unclear. We decided to solve these problems with one stroke.
The fact that each company contributes equity to the fund adds two elements of strength to this. It makes the underlying value of the token clear — these are real underlying assets, and not merely a website with a wallet address. Token holders have ownership in the companies in the fund. And it also makes the regulatory issues straightforward. This is an existing security, all we had to do was find out what entity we were forming, find the relevant registered (or exempt) representatives, counsel, and follow closely the securities laws. This enables us as companies and founders, the relevant partners, the fund itself and its officials, and the investors, to do everything by the book, and leverage the power of tokenization and blockchain, while providing real value to token holders.
Having background in finance and in FinTech, this seemed like the perfect combination. The goal of FinTech innovation is to find the balance between technological innovation, and the stability and trust in financial markets. Minting a new financial instrument (even if based on an existing ones) has been an exhilarating experience for myself and several others on the team who have had prior experience with financial markets. We believe this new asset class, even with its many similarities to existing ones, may very well make a real change in the startup financing landscape. It has the potential to completely revolutionize startup investing.
Ruth is the CEO & Co-Founder of Fincheck. She is formerly Head of the Citibank Startups Accelerator and often gives lectures about the future of FinTech in international conferences. She is also the Founder and Chairwoman of “she codes;”, the community of female software engineers with over 20k members, and was recently named one of the 100 most Influential Persons in Israel.
