In midweek, BlockState announced that it would conduct one of the world’s first equity token offerings (ETOs) on the Newfoundland platform – BTC-ECHO reported. Unlike most ICOs, ETOs are designed to enable investors to acquire real company shares in the form of tokens. We spoke with Paul Claudius, co-founder and CEO of BlockState, to find out why BlockState chose an ETO and how BlockState intends to develop products that bridge the gap between Blockchain and the traditional financial world.
BlockState is one of the first companies to issue an equity token via Neufund
At BlockState we have the claim not only to think about innovations in the digital parallel world, but also to always ensure legal compliance. An ICO in Germany is unsuitable for this claim, as the regulatory provisions here are currently still far too vague. Apart from legal security, a utility token only makes sense in projects where it is a necessary part of the product.
With the ETO the actual investor participation is in the foreground, comparable with a fishing rod and VC investment or the purchase of a share. Compared to a classical public listing, where the hurdles are enormous and market access is difficult, a public listing is much easier with the Equity Token Offering via Neufund.
What made you choose this form of financing?
Equity tokens are therefore a perfect example of a digitised financial instrument and, unlike Angel and VC investments, offer the possibility of selling your shares on the market.
Most blockchain start-ups rely on ICOs so far – what advantages does it have for your investors that BlockState relies on an ETO instead of an ICO?
For investors, an ETO offers a lot of advantages in addition to legal security, because unlike ICOs, investors participate in the company’s success via dividends and, since they hold real shares, have full say and participation rights.