Myles Milston, is the CEO & Founder of Globacap, an end-to-end solution for Capital Raising, Asset Administration, and Custody of Digital Securities.
You were previously CTO of Colossus Bets, which is a successful sports betting business operating out of the UK. Were you initially introduced to bitcoin and crypto in this role?
Colossus doesn’t use bitcoin or crypto in its business, however I did see bitcoin gaining traction in the wider gaming industry, and I started to explore blockchain more after seeing this. Prior to Colossus though – I did almost buy a load bitcoin when it was at $300, unfortunately I didn’t understand enough about blockchain at the time and decided against it at the last minute. I’m sure everyone has their ‘almost bought bitcoin’ story!
What made you shift from CTO of a successful sports betting business, to founding Globacap?
Prior to Colossus, my background was capital markets: starting off as a programmer in a bank, then quantitative equity research analyst, derivative structuring and sales, and later algorithmic commodities trading. So when everyone doing an ICO in 2017 was trying to avoid their token being called a financial security, it made me think about structuring a real financial security as a token.
The advantages were apparent: (i) instant transferability of private assets, and (ii) simple administration (e.g. corporate actions, stock splits, buybacks, etc). It was so compelling that I had to start Globacap. The founder of Colossus was one of our first investors.
Could you share with us what exactly Globacap does?
We’re an automated capital markets platform. Regulated by the FCA with passporting across Europe.
Our automated platform does:
(1) Securities Issuance – all of the administration throughout a capital raise, including the structuring, approving, and distribution of offering documents while ensuring regulatory compliance across 41 countries (and counting), and issuing the tokenized debt or equity securities to investors.
(2) Securities Administration – simple, one-click cap-table management, including all corporate actions (stock splits, buybacks, etc), restructuring, proxy voting, and paying out distributions (dividends or coupons). The difference between us and other cap table management platforms is blockchain. When a transfer of ownership takes place, it is reflected in the cap table in real-time, slicing off a layer of administration overhead that the non-blockchain platforms can’t escape from.
(3) Digital Custody – we are an authorised custodian for blockchain securities and cash.
We are also the only company to date that has created tokenized equity as a direct shareholding, without using a nominee structure. In other equity tokenizations globally, a nominee was required to act as the legal owner of the underlying shares. However, we created a structure that works around this within the existing bounds of regulation, allowing the token holder to also be the legal holder of the underlying shares.
In June 2019, Globacap successfully exited from the FCA’s regulatory Sandbox Cohort 4, becoming the UK’s first fully regulated digital security offering and administration platform. Can you share with us the experience of being in Cohort4?
Great experience. The FCA successfully pioneered the sandbox concept amongst regulators globally, we know of several other regulators that are now trying to copy the FCA’s success. We had a case officer assigned to us on day one, he was available throughout the process at any time and was always extremely helpful, even replying to emails on the weekend (what government organisation does that?). The Sandbox gave us the opportunity to trial our new technology and processes in a controlled regulatory environment, which ultimately led to receiving full authorisation in a quicker time frame than might have been possible without the Sandbox.
Two months ago Globacap announced a strategic partnership with Archax which offers secondary market trading. Could you elaborate on the benefits of this partnership?
Globacap is focused on private investments. However, some of those securities issuers may seek full public secondary trading, and if they do then Archax will be ready to list and facilitate trading in those securities. They have great institutional support, and core technology supplied by Aquis, which is a leading European equities exchange and provider of matching engine technology. We are a partner in order to use Archax as a listing and trading venue.
Globacap was recently recognized as of the UK’s most disruptive companies in the Disruption50 index, which highlights the UK’s most disruptive tech companies. Did this achievement surprise you? Has it helped to bring in additional clients?
It did surprise me as we hadn’t heard of the Disruption50 index prior to being nominated! We’re thrilled and humbled to be included in this index, amongst other highly disruptive tech companies. We believe that we are disrupting the traditional securities market, and we will increasingly do so in force as we continue to scale our business. The recognition did indeed send additional clients in our direction.
Investors can currently invest in tokenized private assets from around the world on your platform. Do you accept USA investors? Are there any restrictions on international investments?
We do accept US accredited investors, depending on the specific offering. Around the world, each country has its own unique set of financial promotion rules. Even within the EU there are small differences between some of the member states. Our platform streamlines this for an issuer – automatically showing or hiding certain investment opportunities to specific investors depending on their location and type, ensuring local regulatory compliance at all times.
Globap is raising £3 million. Could you tell us more about this raise and what the funds will be used for?
We’re in the late stage of completing a funding round at present. A large portion of funds from this round will be used for marketing and scaling the platform. To date we haven’t done extensive marketing, instead we have been focused on building out the product and gaining regulatory authorisation. Having done that, and having completed several transactions on the live platform, we are now starting to market the platform and scale.
Where do you see Globacap being positioned in 5 years?
We are focused on private assets in the small and mid-cap segment. In other words: too-big-for-crowdfunding through to listed on a small/mid-cap exchange such as the LSE AIM market. We believe the market is over-priced and under-served for that demographic. Our tech gives companies a better experience, an easier process, full regulatory compliance, lower costs, and empowers the larger end of that range to stay private for longer – giving investors access to secondary market liquidity while avoiding the overheads associated with becoming a public entity.
Is there anything else that you would like to share with our audience?
This is an exciting phase in the evolution of the securities industry. It’s now possible for private assets to trade more freely, for paper to truly disappear in securities administration, and for billions of dollars worth of private assets to be securitized cost effectively – potentially unlocking a new wave of economic growth.