Who is 22x?
Founded in 2017, 22x is a fund that provides global investors with the chance to contribute to heavily vetted start-ups.
The company believes that fractionalized ownership –made possible through tokenization– can bring new levels of efficiency and profitability to venture capital.
What is the problem?
Many of the most desirable start-ups remain out of reach of the average investor. The best opportunities are reserved for those that have millions to contribute. For those that do have access, their investments are often locked up for long durations before their funds become liquid again.
Those that do not have direct access to start-up investments often turn to the use of a fund. Unfortunately, due to the inefficiencies involved with this, they are often saddled with hefty fund management fees.
How will they solve it?
Through their close ties with Securitize, 22x successfully launched their very own token in mid-2018. Each of these tokens represents a 1:1 share within the 22x fund.
The money raised during this token offering will be provided as funding to 30 pre-vetted start-ups, to help them develop. Each of these start-ups were part of Batch 22 from 500 Startups.
The benefits of investing in start-ups via a tokenized fund are various. First, investors are actually able to gain exposure to the start-ups. Normally they would not be able to unless investing significant sums of money.
Second, because investors have digital ownership of fund shares that are recorded on the blockchain, a new level of efficiency is found. Due to the transparency and speed of both transfer of ownership and verification processes, fund management fees are kept to a minimum. This is something that could not be achieved through traditional fund investing.
Finally, and arguably most appealing, is the fact that investors in 22x have high levels of liquidity on their investment. The means of return on their investment can come through multiple ways.
- As the fund worth increases alongside the companies they have invested in, so does the value of the tokens. These tokens can be traded on secondary markets at any time, giving investors immediate liquidity.
- If a company exits, then the revenue generated from this event results in token buy-backs from investors, with holders receiving their appropriate share of the money.
While the founding team consists of 9 accomplished individuals, day to day management of the fund is overseen by the following two stalwarts. Tim and Jamie are the founders of Securitize, and have been tasked with fund oversight.
Now that the funds have been raised through an STO, 22x can provide their portfolio of start-ups with much needed capital. Depending on start-up evaluations, this funding will equate to between 2.5-10% equity shares in each start-up.
While United States investors are required to adhere to a one-year lock up of their investments, this is a global fund. Those that have invested from outside of the United States must adhere to their country’s securities regulations. This means that depending on the region, it will be soon that investors gain the ability to begin trading their holdings on exchanges.
To learn details about the project, please view our 22x Fund Token Listing page.