Unlocking public capital for startups
Startups need to raise capital. This is a fundamental truth; the current ICO trend is just one way to do so, like the other trends before it including crowdfunding (equity and non-equity), angel, AngelList syndicate, venture capital, private equity, debt, and other methods.
One method that hasn’t really been explored is the public markets route. Perhaps this is due to the regulatory barriers that exist on various exchanges, or to the perception that other forms of capital raising are more attractive. But the fact is that public markets offer a liquidity and volume of capital that are very advantageous to startups.
There has been some action around startups and public markets. Social Capital is finding ways for startups to go public without an IPO, through a method called a special purchase acquisition company, or SPAC. A SPAC is a shell company that goes public for the purpose of being an investment vehicle; this is an approach that has traditionally been used to perform M&A transactions on other companies.
Another method is direct listing, which Spotify is rumored to do at the NYSE in early 2018. In a direct listing, which is available to firms under $1 billion in revenue, a company sells stock to the public markets without going through the roadshow process. This option confers the upside of public markets without onerous processes including the use of underwriters or how to position the company during the roadshow.
That’s why today I’m excited to announce that Zeroth is working closely with Animoca Brands on a new platform where startups can obtain public capital. Animoca Brands is one of the public premier gaming companies in the Asia region with some of the top brand partners globally, and their public markets access as well as their development and consumer distribution capabilities are one of the best. And the publicly-listed Animoca Brands just announced a successful placement to its institutional investors, enabling the company to invest in Zeroth.
I believe the lessons Animoca Brands learned as a public company and operating a large scale development and consumer business will give Zeroth critical knowledge to help startups scale their operations, raise public capital, and provide exposure and benefits for retail investors interested in Zeroth startups.