Republic: How Anyone can become an Angel Investor
Kendrick Nguyen is the founder and CEO of Republic Crypto — an equity crowdfunding platform that allows non-accredited retail investors to invest directly into private startups.
We are pleased having Ken as our interview guest.
What is the vision of Republic?
Republic’s vision is to be the one-stop-shop fundraising platform for any startup. We believe in democratizing access to investing, allowing anyone to become an investor in a company.
How do startups using your platform to raise funds view the occurrence of Security Tokens? Do you see a rise of interest?
The term “Security Tokens” is very broad. We’re confident the infrastructure of this new class of asset will be built out, and Republic will be able to fit the needs of this new class of assets. There has definitely been an incredible amount of interest. Our issuers come to Republic because they’re confident Republic is well positioned to handle the changing environment.
How do Security Tokens affect your platform? And where do you see the role of Republic within the Security Token Ecosystem?
Republic allows any company to issue a token under one of the common security exemptions. We’re under the belief that many tokens issued in the past are in fact securities. We’re bringing compliance to the ecosystem by allowing any company to issue a token in a compliant way.
Startups can raise a maximum of $1,070,000 (according to Title III of the JOBS Act) via Republic. Is that not way to little for most of them to reach a sufficient funding?
The 1.07mm maximum can be a lot of money for startups, depending on where in the lifecycle a given project is. The wide distribution of equity or tokens has ancillary benefits as well, including that it allows the startups to create a community with “skin-in-the-game”.
What are the biggest obstacles we have to overcome in order to democratize the access to capital markets for companies and (retail) investors alike? How can Security Tokens further that process?
The biggest obstacles to overcome are to build out the infrastructure for these tokens to exist and allow for KYC/AML of these retail customers. This process doesn’t happen overnight. While Security Tokens cannot speed up the process, they rather allow for the tokenization of new types of assets, which drastically increases the number of investable assets.
Can you describe one specific benefit Security Tokens are generating by walking us through a process before and after Tokenization/Blockchain came along?
One benefit of Security Tokens is allowing the widespread distribution of ownership of a single asset. Before blockchain, real estate only had one owner. The process to sell real estate was arduous, especially in a crowded market. With Security Tokens, ownership of real estate can now be split between multiple parties, creating even more owners for a specific piece of real estate.
What is the biggest misconception people have about Security Tokens?
The biggest misconception is that people assume Security Tokens create automatic liquidity. Liquidity is much more complex; the fact that an asset is easily tradable and transferable does not mean it is instantly liquid.
Can you name one thing u believe in regards to Security Tokens most other experts within the industry would disagree with?
The most difficult problem with Security Tokens isn’t adoption or convincing companies to tokenize traditional assets — it’s liquidity. As we start to tokenize millions of different assets, giving retail investors the choice in which asset they want ownership of will be a difficult problem to solve. We’ll need to start to curate the best investment opportunities for these investors.
What was the best learning you made in the last year?
The crypto market is changing fast. We didn’t anticipate how fast it will change. More crypto companies are looking for ways to create value for their token. One way that we’ve seen companies doing this is through Airdrops.
Who will be the biggest loser and winner once the Security Token evolution is taking off?
The biggest winner will be companies who find the most efficient way to curate & execute tokenization opportunities within the crypto space. These companies need to be the innovators figuring out the hard questions. The companies that are laggards and wait will not able to capture the opportunities that arise.
Thank you for the interview.
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Note: This interview was conducted on 05.02.2019
