Revolutionising Start-up and Company Financing

In our latest Fireside Chat on June 24, 2020, Black Manta Capital Partners (BMCP) hosted an engaging session on ‘How Security Tokens are Revolutionising Start-up and Company Financing’. 

Our partner, Alexander Rapatz, sat down with Sorcha Mulligan of The SME Chain, Florian Wimmer of Blockpit GmbH, Toby Lewis of Novum Insights, Robert Haastrup-Timmi of Blockchain Company and Juergen Hoebarth of Tokenisation Limited.

Here are some key take-aways from the session:

1. Educational phase of digital assets

Whilst sceptical of crypto assets, traditional financial institutions are enthused by the prospect of digital assets. However, more education is needed to build actual activity level and an eventual secondary market.

Steeped in compliance expertise, Toby pointed out that traditional players including Pantera Capital and Union Square are trading unregulated tokens owing to the lack of clear regulations. He remains optimistic that a floodgate of activity will follow from enhanced legal certainty.

2. Ways to build trust

To enhance the perception of legitimacy in digital assets, our speakers encouraged collaboration with other players. For instance, Robert’s Blockchain Company is partnering with global financial consultancy Duff & Phelps with KYC and AML onboarding procedures. Sorcha agreed that this will go a long way in stimulating confidence amongst institutional investors in digital assets.

Florian added that a portfolio of regulated assets is critical to foster trust amongst multiple types of investors. The backing of regulators will cement the reputation of digital assets as a great instrument to converge both crypto enthusiasts, private investors and institutional investors who are warming to the idea of asset sharing.

3. Necessary pain points persist

Given that the paradigm of utility and security token remains relatively new, working with willing regulators remains a time-consuming and costly affair.

Reflecting on his recent experience with the France’s market regulator AMF, Robert revealed that patience was essential even when dealing with the first G7 country with a regulated framework for an Initial Coin Offering (ICO). Florian concurred that he initially underestimated the time required for regulatory approval from the supportive Austrian legal framework.