Security Token Offerings Could Disrupt Venture-Backed Tech Startups Positively

A handful of methods exist for raising capital, from private offerings to semi-public to a full-blown IPO or ICO. Now STOs are on the rise which might just be what tech startups need to revitalize the market

According to data collected by Pitchbook, a smaller number of startups are being obtained by larger firms or are going public. Many of these startups, though venture-funded, have a minimal chance of starting an initial public offering (IPO). Some are resorting to cost-cutting measures to better their operating margins in the hopes of drawing mergers and acquisitions (M&A).

The Statistics

Today, more young companies are being allocated capital by VCs, and yet, fewer are exiting through M&A. And the exits are taking longer for those who go through an IPO.

It is said that 2014 was the height of VC-supported exits with 200 startups lined for an IPO. As the years passed the numbers dropped, in 2017, not more than 100 IPOs reached the market.

The sloping movement persisted throughout 2018. Now even less companies backed by large investments are being offered an IPO or M&A exits.

Pitchbook notes that in 2006 it took businesses an exit time of around 4.9 years. But by 2016 it took roughly double that time, 8.3 years. Investors are holding back for an exit from a position for 10 years.

The STO: A Modern Route to Liquidity

Initial coin offerings (ICOs) have transformed crowd-funding and capital-raising. However, a majority of it was ineffectual in delivering business benefits.

On the other hand, an STO can lead the way to equip medium, VC- supported tech startups to re-define itself whilst allowing innovative entrepreneurs to elucidate new problems.

Anticipated to be compliant, security token offerings (STOs) behave like traditional equities. Typically, it has a standard exemption through the SEC’s Reg D. Its difference from the traditional lays in the execution which is done through a smart contract.

Tokenizing a business backed by big money unravels liquidity difficulties. The accepted scope for tokenizing starts from $100 million up to $1 billion. But there are other alternatives such as a partially private token offering using the SEC’s Reg D exclusion which can be offered to qualified investors, or a semi-public offering through the Reg A+ Sec exemption. Though it can be proffered to non-accredited investors, the semi-public offering is restricted to $50 million per year.

The significance of tokenized shares can also be felt in the secondary market enabling seed investors to shift funds to other innovative businesses.

Advantages of Tokenization

Young companies that have undergone several funding rounds possess proof that can be considered quantifiable and comparable. After half a decade or so, these startups already have a client base, a product, revenues, and financial background where fair market valuations can be derived.

Startups in tech have the financials ready for tokenization. Through tokenizing, the opportunity for discovering capital and talent is realized. It can revitalize the tech industry and its accompanying market.

Another benefit that comes with the process is that token converted shares can be sold at a later time on exchanges viz. Open Finance and tZero.

In summation, tokenizing shares and conducting STOs can pick up on the innovation started by ICOs and breathe new life into the market.

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Europeans Are Bullish On Crypto, Study Finds

The APAC region isn’t the only continent confident in crypto. Blockchain adoption is expanding in Europe, along with bullish sentiments. A recent set of studies published by bitcoin exchange bitFlyer, shows a high degree of consumer confidence in cryptocurrencies across Europe. The study polled over 10,000 people across several European countries, and found that approximately 63% of those interviewed believed in the long term potential of cryptocurrency and blockchain technology. The study also covered public opinion on blockchain use cases. The poll shows that only a small proportion of poll takers had an opinion on what blockchain will be used for, with 8 percent believing that crypto will be a medium of exchange and 7 percent believing that crypto will be an investment or security. According to bitFlyer’s announcement, Norway is the most optimistic about the future prospects of cryptocurrencies, with nearly three fourths (73%) of respondents bullish on the asset class. Furthermore, every country where citizens were interviewed showed a majority support, with France polling the lowest at 55%. bitFlyer believes these results show a certain maturity in the market, suggesting that the cryptocurrency space has moved beyond a mere hype cycle, and that the technology is gaining legitimacy as a medium and store of value. Andy Bryant, COO at bitFlyer Europe, said: “These results indicate that the reputation of cryptocurrency has moved beyond hype and become more established. It’s very easy to forget just how new cryptocurrencies still are; we’ve only just celebrated bitcoin’s 10th birthday, so for the majority of consumers to believe in crypto’s future is without a doubt an achievement.”Andy Bryant, COO at bitFlyer Europe Also mentioned in the report, Bitcoin seems to garner less support in the European public eye, though still sits near the majority at 49%. This suggests that while Bitcoin may have pioneered the blockchain space, consumers are more confident in the emerging second, third and later generation blockchains. Bryant continued: “The fact that bitcoin is not generating as much support as other cryptocurrencies is in part a symptom of the market’s volatility, but is also a direct impact of the constant media attention that is associated to its volatility. We of course believe that bitcoin is here to stay, and while we’re encouraged to see the large majority of Europeans think the same, this research shows there is much more to be done to demonstrate to consumers the benefits of and use cases across all cryptocurrencies more widely.” Andy Bryant, COO at bitFlyer Europe Despite rising public perception and growing extensive infrastructure, blockchain tech still remains in its infancy. Nonetheless, the level of consumer faith in this new asset class is a promising sign. While it’s impossible to tell what impact blockchain and crypto assets will have, more signs are pointing to the possibility of a worldwide digital revolution.     The post Europeans Are Bullish On Crypto, Study Finds appeared first on Crypto Briefing.
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‘Twitter Hype Index’ Mirrors Cryptocurrency Market Cap, New Data Shows

The DataLight Hype Index shows Bitcoin leads the way in terms of popularity on Twitter with the results of the ranking closely mirroring the position of cryptocurrencies based on market cap. Bitcoin is King of ‘Crypto Twitter’ According to a recent report by DataLight, Bitcoin occupies the top position in the Twitter Hype Index – a measure of the degree of popularity of a cryptocurrency on the social media platform. This data is yet another indication of Bitcoin’s dominance over the rest of the cryptocurrency market. It holds the lion’s share of the attention of investors and critics alike. Whether positive or negative news, stories relating to Bitcoin tend to dominate the “Cryptocurrency Twitterverse.” Case in point, the hashtag #Bitcoin had more than 800 tweets within the hour as at the time of writing this article. Of the top 15 cryptos listed in the index, the top three mirror the positions of cryptocurrencies by market capitalization. Bitcoin, Ethereum, and XRP occupy the first, second, and third position, respectively. Don’t Believe The Hype However, the perceived hype isn’t everything. Especially on Twitter, a platform rife with phony accounts operated for certain agendas. Twitter bots don’t only push fraudulent investment schemes but can also be used to prop up cryptocurrency projects. For example, the report highlights how proponents of Ripple and XRP – the “XRP Army,” use Twitter to put the company and the token in the spotlight of crypto discourse. At least 8,000 outright fake XRP-related accounts were identified by analyst Geoff Goldberg. DataLight notes: He highlights how a set of accounts creates content which is replicated by a network of other accounts, generating more retweets and likes and so registers a ripple effect (no pun intended) of false enthusiasm for XRP. Furthermore, he identifies a trend where apparent bots follow each other, using XRP or Ripple-based hashtags in their bios to make use of algorithms that disseminate the message. astroturfing = the deceptive tactic of simulating grassroots support for a product, cause, etc., undertaken by people or organizations with an interest in shaping public opinion #xrparmy #xrpthestandard #xrpcommmunity #xrpthebase #xrp cc: @yoyoel @vijaya @JoelKatz @CoryTV pic.twitter.com/H3s9PfuiwM — geoff golberg (@geoffgolberg) December 4, 2018 Twitter Hype and Herd Mentality At the same time, Twitter hype can play a significant role in gauging investor sentiment, which is a fundamental analysis tool for investors. This position relies on the assumption that Twitter constitutes a fair representation of the collective mood of investors. An excerpt from the report reads: Other than inferring general bullish or bearish trends, the Hype Index can help an investor more specifically. If for example, surging prices are not accompanied by positive movements on the Hype Index, investors might be wary of buying in. While a rising Twitter Hype Index that is not accompanied by a rising price could help investors identify undervalued cryptoassets. As previously reported by Bitcoinist, herd mentality remains a significant influencer of investor sentiment. With retail investors dominating the cryptocurrency market, there are bound to be sharp reactions to market trends usually signaled by social media commentary. Meanwhile, Google data shows that the public interest in Bitcoin lags behind price moves suggesting that we are still not out of the early speculative stages of tech adoption. Do you think social media hype plays a significant part in shaping the market sentiment for cryptocurrencies? Let us know your thoughts in the comments below. Images via DataLight, Shutterstock The post ‘Twitter Hype Index’ Mirrors Cryptocurrency Market Cap, New Data Shows appeared first on Bitcoinist.com.
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Harbor Cancels Convexity Properties STO

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