Private shares tokenization: Are you ready for a new business leap?
Nowadays we live in the world full of startups, entrepreneurs, and emerging private businesses. The privately held company are very popular, but they are owned either by private persons or by a relatively small number of shareholders or company members. You can’t find their shares on a stock market exchanges, and you can only trade or exchange them privately.
Of course, that can be made through direct contact between the two parties. It’s too risky and too complicated – you need a legal support, it takes a lot of time. In some cases you have to become a part of a company’s trusted list just to get a chance to buy. And what to do if you want no one to know who you are and what kind of money you can bring to the table?
Another problem is that private companies provide very limited amount of information if any that makes investment very risky. What can we do? The solution is the private shares tokenization.
How does the tokenization of private shares work?
Let’s take a company, which require to release private shares. Let’s say, we have a buyer for these private shares. However, the lack of transparency and clear legal rules on the market lead to unprofitable transactions. How can we conquer this problem? With releasing tokens on the security of private shares.
The blockchain technology makes the process even more efficient than securitization. Comparison of securitization and tokenization shows that the blockchain creates one main information flow instead of multiple data coming from different entities. This makes information sharing easier, reducing costs and time consumption. Also, tokenization improves liquidity by near immediate clearing of transactions without any intermediaries and providing an ability to trade a token for any other asset in case of decentralized exchanges (e.g. Stellar decentralized exchange). Thus prices will more accurately reflect true value. That’s the beauty of the process and that saves time and money. We believe that investors will eventually prefer the ease of trading and liquidity for alternative asset classes such as asset-backed tokens.
How can we bring it to you and your business?
Smartlands suggests the new better way to buy and to sell private shares. It is easy, secure and blockchain-based, of course. We use tokens for your investments or to bring investors into your business. Tokens are backed by the private shares of the company. As a private shares tokenization showcase, we consider Ffintech company in Norway with the expected return of 15-20% on. The company develops blockchain-based payment processing platform that provides flexibility, controlled privacy, fast execution and low transaction costs. Investments obtained through private shares tokenization will be used to establish offices in the new countries of presence and organize corresponding marketing campaigns. New markets penetration will increase company’s profit thus become the source of cash flow to both initial equity holders and asset-backed token holders. The private equity tokenization is a more agile and efficient way to attract funds for expansion among investors familiar with the technology and without additional intermediaries.