Why Raise Capital using the Blockchain?
What Is Blockchain?
At the most basic level, you can think of the blockchain as a ledger, where, similar to a database, transactional data is written. Each transaction is written and verified in a block on the blockchain. Smart contracts with pre-set rules are written into the block to automatically trigger activities, such as a distribution, on a specific date or at a specific milestone. The creation of the issuance, the recording of the transaction, the transfers of securities and the recording of shareholder information all occurs digitally.
Information recorded on the blockchain is transparent and auditable. Through the issuer dashboard, issuers can see shareholders in near real-time. Additionally, issuers have the ability to send shareholder communications, issue perks and rewards, and issue token distributions through a transfer agent.
Quicker And Less Room for Errors
It's a common notion that digital activities with little-to-no human interaction tend to happen more quickly. That’s typically the case of financial activities leveraging the blockchain as well. With less human dependency for operational tasks, marketplaces leveraging the blockchain can trade 24/7 and take advantage of instant settlement, where unlike the T+2 (trade +2 days) settlement period associated with public market stock transactions, private marketplaces leveraging the blockchain typically can complete trades in minutes.