How Smartlands is Going to Combine the Advantages of Blockchain Technology with Classical Investment Instruments

Raising capital is an essential need of any company that has attractive investment opportunities. The ability to get funding timely and effectively is crucial for the creation of additional value by companies. Long term investments for innovative and aggressive growth strategy are the hardest to get. In many cases, IPO is the only option that is available for mid and large-sized established companies, due to significant upfront costs and strict rules.

ICOs that emerged recently have broken down some of these barriers, but created another set of problems: no accountability and transparency, legal risks due lack of legislation, etc.

So, it is only logical for businesses to seek out a more balanced way of raising capital.  

We already mentioned that Smartlands is going to employ a crowdfunding platform licenses to create a solid foundation for the future of asset tokenization. In order to be fully compliant with the law, the company plans further expansion by launching new offices in Vilnius and London at Level39, the world’s most connected tech community, consisting of 1250 leaders in cybersecurity, fintech and retail tech.. The opening of the Lithuanian and English offices is going to be fulfilled hand-in-hand with the acquisition of the aforementioned licenses, in order to gain the most from United Kingdom’s and Lithuania’s favorable legislation and government endorsement of FinTech industry.

So, what does this mean to the standard business owner? Here is a quick comparison of why choosing the middle option is the best out of the three.

IPO

Costs

High

• Investment bank fees.
• Financial audits.
• Prospectus prepared
  by lawyers and approved
  by authorities.
• Marketing expenses.

Risks

Low to medium

• Despite a very regulated process, financial statements- the crux of investor decisions – aren’t always accurate.
• Overestimation in security price during the initial offering, and reduction of cash flows to shareholders later.
• Corrupt registrars in developing countries and a low level of insurance against adverse events.

Flexibility

Low

• Very formalized process limits the flexibility of companies and investors.

Industries

Any

Stage of development

Mature companies

Crowdfunding
ABT Offering

Costs

Medium

• Platform fees.
• Legal due diligence.
• Technical audit(s).
• Financial audit (if appropriate).
• Offering memo prepared by the company in-house (with Smartlands support if required).
• Medium to low marketing expenses.

Risks

Low to medium

• Legal framework in compliance with legislation eliminates the risks of the ICO being considered illegal, and the corresponding issues for both issuer and investors.
• Focus on automatized technical audits performed with advanced technologies provides great opportunities to check the truthfulness of financial statements with great precision at lower costs.

Flexibility

Medium to high

• CF regulation provides much more options to put effective and efficient control over a company.

Industries

Any

Stage of development

Any

ICO

Costs

Medium to high

• Preparation of Whitepaper.
• Fancy website and videos to attract attention.
• Extreme marketing expenses to attract investors, given high costs of advertisements
  on specialized website and high adwords price for ICO related topics.

Risks

High

• Undefined legal status and vague commitments of the projects that perform ICOs.
• Minimal if any control over the team actions.
• Undefined legal framework (+WP).

Flexibility

High

• Basically no limitations, but this brings a lot of risks.

Industries

Hyped

Stage of development

Startups

Benefits of ABT offering under crowdfunding platform licence

Clean solution to provide risk levels comparable to IPO, but at a lower cost, with more flexibility and availability in any industry.

A perfect balance between price, terms, value and risks. Opening such an opportunity to raise capital for middle and small-sized companies will have a positive impact on development, and provide many investment opportunities for retail investors. Boost opportunities for small and medium companies will have a positive effect on the world economy in general, due to increased competition with established giants.