The short-term success of ICO fundraising to date and the long-term success of Venture Capital’s ability to drive innovation are two industries ripe for combination due to how well they complement each other. Coindesk’s “State of the Blockchain” Q4 2017 survey they found that the majority of people believe that ICO & VC investment are complements to each other.
Still, equity is a more complicated ecosystem than simply fundraising raw tokens. It involves people such as founders, investors, limited partners, employees, advisors, and customers. In the past, the transfer of equity is traditionally managed through stocks, options, warrants, and other financial instruments.
A recent statement from Carta does an excellent job creating a synopsis of this complexity:
“We live in a world where everything is owned by a person, or more commonly, a group of people. Startups, office buildings, rental homes, railroads, railroad cars, railroad companies, debt for those railroad companies, Antartic territories, oil rigs, helicopters to access those oil rigs, farmland, farm equipment, rice paddies, irrigation equipment for those rice paddies, DAOs, ICOs, pharmaceutical companies, pharmaceutical patents…. it goes on and on. Everything in our world is owned by a person or a group of people.
Humankind’s greatest financial invention was the Corporation. The Corporation made it possible for people to group together and share ownership at scale. That vehicle for shared ownership has made S-Corps, C-Corps, LLCs, and LLPs the dominant form of business creation in the modern era. And new forms of shared ownership are being created today with ICOs, DAOs, and blockchain ownership ledgers.”
Equity Token is the creation of programmable equity ownership via smart contracts. This innovation will have several benefits for each of the parties involved in a tokenized equity transaction. Making it easier for investors to support the best founders and teams driving innovation from anywhere in the world.