Using GetEquity: Tokens — how to buy them, what their value means.
This article is the third part of the ‘Using GetEquity’ series where we break down the process of setting up your profile, making your first investment, and understanding what your investment means.
In this article, we will be breaking down the process around tokens and what buying them entails.
To be an investor on GetEquity means purchasing equity/shares in the companies listed. We have discussed in the past series that we digitalise the allocations a company wishes to raise into smaller bits in the form of tokens in order to make them accessible to you and me and easily tradable in our marketplace we call Secondaries.
In order to understand how you own equity on GetEquity, check out our article that breaks it down here
What are these tokens and how are they represented on GetEquity?
A token is a digital representation of the price per share of a company that has been allocated to the GetEquity investment community. A token on GetEquity is equal to 10 US dollars($10).
This means when a company comes on board and intends to raise an amount like $10,000. This amount is broken into tokens, in this case, 1000 tokens for said company. This further means that the company intends to sell 1000 tokens worth of shares. Once all 1000 tokens have been bought by investors, the company officially has closed their round.
When company A is raising on the platform, you can choose to buy $100 worth of tokens which means 10 tokens, or $500 worth of tokens which means 50 tokens.
In order to buy tokens successfully on the platform, your wallet must have been funded. This can be done in three different ways. Learn more about it here
We charge a 1% transaction fee for every token bought. This means that in order to purchase $10 worth of tokens, your wallet must have an amount of $11 or greater.
To get started on buying tokens, follow these steps.
Step 1: Navigate to the page that shows all companies currently raising by clicking on the “see all” text next to “companies still raising” on the overview page as seen in the image below
Step 2: Select the company in which you intend to buy tokens in. This will lead you to the company page as seen below.
Step 3: On the company page, read about what they are building and once decided, input the number of tokens or the amount worth of tokens you intend to buy and click “invest”
Once you have successfully purchased your tokens, you will be able to view all tokens that you own and their value on the “wallet” page as seen below.
This brings us to the second part of this article, the value of your tokens.
As mentioned before, the initial value of a token is $10. The value of tokens of a company can change(i.e rise or fall) due to the market conditions of a company's performance which you can get to see as they send in monthly or quarterly performance updates.
However, this value can only change after a company has successfully closed its round.
The value of your token bought can rise when the company has grown considerably in the form of milestones met, revenue targets met, or new and increased capital raised which affects the valuation of the business. If any of these occur, the value of your token will go up which will be visible right on the app and the value of tokens displayed on the wallet page shown above will change.
Let’s take for instance Spleet, the online rental platform providing new ways for Africans to rent homes from monthly customized plans. If you bought a token when they were raising it was at $10 but they just recently met milestones and closed new funding from Global investors increasing their valuation which has appreciated the token to $15, a $5 increase.
As the value of startups and performance grow so does your token worth and vice versa.
Once a company closes its round, you can choose to either still hold your tokens or sell them on the secondary market.
If you also missed out on the initial round of a company, you can buy tokens using the secondary market right on the app.
Learn how the secondary markets work here
You can reach us for any questions at support@getequity.io and if you also encounter any issues along the way, we are here to help.
Written by Tolu Olawumi
