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Consider that as of last summer, the 5 biggest tech companies in the world were worth a combined $3 trillion. This is more than the GDP of the UK or of France. As any investor knows, these companies all had humble beginnings, but even with the benefit of hindsight most people wouldn’t have been able to invest in those companies when they were starting out – since most early stage companies lack a means to connect with a microinvestor audience. If you have a small company, it is currently not really possible to raise significant amounts of money outside of the conventional investor industry.
There are many ways that blockchain technology could provide a new revolution in investing possibilities. Developments like smart contracts and decentralized markets as well as token based investment open up the possibilities of decentralizing fundraising. This is evident in the flourishing of ICOs. But ICOs are obviously not applicable for all companies, especially smaller companies or those that aren’t launching their own crypto platform. A new startup based in Delaware is aiming to leverage these capabilities of blockchain to make change the investing ecosystem. OnPlace is building towards its token generation even (TGE) in February 2018.
Tech industry still lacking decentralization
The tech industry has broken down a lot of barriers for those working in it and also the users of its products. In the past 40 years, we have seen unprecedented growth in wealth and productivity thanks to the work of startups, and the rise of the tech industry has reduced the influence of corporations and governments and made success more accessible to all, entrepreneurs and investors alike.
But there is still a lot of progress to be made. Starting a company is still fraught with the difficulties of managing finances and documentation, and most startups still need to deal with the closed shop of the VC establishment.
Furthermore, from an investor perspective it is tricky. Accessing data on a company, ensuring that the investment contract is up to scratch, and the simple issue of finding and transferring funds to the target company is difficult. Platforms like Kickstarter are great for creative projects, but lack the security and detail (as well as the contract backing) of conventional VC, so investing with Kickstarter will offer the investor fewer options and possibilities.
Using blockchain to disrupt venture capital
OnPlace are targetting two related investment areas with their platform. The first is for private investment in promising startups. This market will allow investors to select from projects that have been analysed in terms of their revenue, team, and other due-diligence metrics. This takes a lot of pressure off the investor in terms of gathering information. The second part of the platform is a crowdfunding platform closer to the likes of Kickstarter. Both markets will utilise the PATS protocol, which is explained by the OnPlace team:
“The concept of the Private Assets Tokenization System (PATS) protocol is to tokenize over-the-counter (OTC) assets for customers to invest into. The protocol entails multiple steps firstly establishing a marketplace opportunity window (MOW), following the MOW there is a selection of projects to be tokenized based on the criteria and communal discussions of crypto-investors.
The next step is the tokenization of various projects that were eligible under the PATS protocol leading to the circulation of the established PATS tokens. Lastly the tokens are supported during their life cycle which ensures a complete decentralized control of the tokens under the control of the token holder community.”
They explained the benefit of this protocol for the everyday investor: “the decentralization of audit and participants’ decision-making and through the integration of management principles directly into the asset itself will open potential access for everyday people of the world to purchase OTC assets which is often a daunting experience.”
So the team are making it possible to be an early-stage investor in the next Uber, Google, or Qualcomm, getting in right at the ground floor.
The Onplace Token Generation Event takes place next month.
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