DigiShares Launches Platform for Blockchain-Based Equity Crowdfunding

Press Release, 21 March 2019

DigiShares (previously called GoSecurity) can finally demonstrate an operational software platform for so-called STOs (Security Token Offerings). An STO is a form of equity crowdfunding where capital is raised by issuing tokens on the blockchain corresponding to shares in a company and then selling these to interested investors. The platform is now undergoing final testing but can be demonstrated to interested parties.

Compared to traditional forms of crowdfunding and capital raises such as private placements, public offerings and IPOs, an STO is less expensive and more “liquid” since it is easier to reach global investors. The biggest benefit by far is the fact that security tokens are tradeable and will soon be traded on special exchanges in Europe. This means that angel investors putting money in startups will no longer be stuck for 5–8 years but may immediately trade their shares with others. In a similar manner, investors into real estate projects and investment funds may achieve liquidity much sooner than before. For this reason, investors are expected to prefer STOs over traditional forms of capital raise which will in return make it easier for companies to raise capital with an STO — and potentially allow for increased valuations.

The DigiShares platform can be used to issue any kind of security token or tokenized security. A security token is a blockchain token with security properties such as a profit-sharing right, voting rights pertaining to a specific project, etc. A tokenized security is a recognized security (stock, bond, debt) that is tokenized — i.e., represented as a token on the blockchain. Tokenized securities are not possible in all legislations. DigiShares can provide guidance, in particular within the EU ecosystem on these matters.

The platform handles the issuance and ongoing management of security tokens relating to one specific issuer, enabling the administrator to verify investors according to KYC/AML, create new tokens, transfer tokens to investors, re-issue lost tokens, maintain an overview of the shareholder register, conduct votes, distribute dividends, etc., etc. The platform is intended as a shareholder management system for companies that either want to raise capital via tokenized equity crowdfunding, or tokenize their existing shares in order to create better liquidity for their existing shareholders.

The platform is provided under the DigiShares brand, but also increasingly as a white-label solution for companies that want to operate their own issuance platform. This could be STO consultants, legal and financial advisors, equity crowdfunding platforms, etc.

Claus Skaaning, CEO of DigiShares: “We work together with our partners to provide end-to-end solutions in the European ecosystem for blockchain-based equity crowdfunding, and more and more pieces of the puzzle are falling into place. We hope that at the end of 2019, all the elements are in place such that we have a significant investor network interested in security tokens and a number of compliant and operational security token exchanges in Europe.”

The STO market is viewed as the “new ICO” and foreseen to become a very large market in the future, for instance by the World Economic Forum who has predicted that 10% of the GDP will be tokenized by 2025 ($12–14 trillion).

DigiShares is doing its own STO as a pilot on the platform and to spread awareness. The STO is currently in private placement.

Contact: info@digishares.io — see http://www.digishares.io