European investors got some surprising news this week as the AI-driven freelance platform, Project Crowd announced it had chosen WeOwn to host the firm’s upcoming equity token offering (ETO). The ETO will be among one of the first regulated offerings to occur in Europe. The news demonstrates growing blockchain integration in the EU financial markets.
WeOwn is a Liechtenstein-based blockchain crowdfunding platform. The company offers businesses some significant advantages over traditional alternatives. For one, businesses can launch new campaigns in 4 – 10 weeks. Also, there are no settlement delays, so businesses receive the highest level of liquidity available.
News of the strategic partnership first emerged on October 15. Importantly, this crowdfunding campaign will be the first ETO launched in the region. Additionally, it’s the first registered ETO WeOwn launched since the company’s inception. Together, these factors make the entire campaign an important milestone.
WeOwn CEO and Co-Founder, Sascha Ragtschaa spoke on the advantages STOs have over traditional crowdfunding strategies. He pointed out the small number (25) of successful IPOs launched on the London Stock Exchange this year. These failures included some high-profile companies such as rideshare firms Uber and Lyft.
Ragtschaa explained that these failures scared investors. This fear helped drive the growing private crowdfunding sector. WeOwn gives companies a cost-efficient alternative to the status quo. Compared to hosting an IPO, an STO provides firms with an easier to initiate and more transparent process.
Project Crowd is a freelance platform that leverages a variety of new technology to streamline the entire hiring process. For one, Project Crowd employs advanced AI algorithms to better match service providers with businesses.
Additionally, blockchain technology enables the platform to better monitor and record the abilities, tasks, and the experience level of each freelancer. This information is then looped back into the AI to continue to refine the systems hiring capabilities.
The freelancing market exploded over the last five years with platforms such as Upwork raking in huge profits from connecting employers with trained professionals. One recent study highlighted the astounding growth the community endured over the last few years. According to the report, the number of freelancers doubled since 2014 globally.
Project Crowd Chose WeOwn
Discussing the decision to go with WeOwn, Project Crowd CEO, Kathrin Hauk explained the motivation behind the move. Notably, both firms share a desire to integrate blockchain tech into the capital markets. Hauk called Project Crowd STO a “historic moment” for the entire industry.
Project Crowd ETO
The Project Crowd ETO is open to qualified EU investors currently. According to the firm’s documentation, 1 million shares equal a 7.25% equity stake in the company. Notably, each share costs 1 Swiss Franc and there is a 200 Swiss Franc minimum (USD 201). Additionally, investors will receive dividends periodically. Lastly, token holders have no voting rights.
The Future is Today
The Project Crowd platform has its sights on the multi-billion dollar freelance sector. If successful, the firm could become a major player in the market in the coming year. For now, developers seek to expand the platform’s capabilities and network in the coming months.
Genobank to Bring Privacy to DNA Testing with Blockchain
We live in an age of connectivity. Technology has enabled us to stay in constant contact with the world, in real time. This connectivity has transcended communication, however, and changed the way we view our connectedness with others.
One company, by the name of Genobank, provides its clients with the ability to discover their origins, and connection with others. This is done through the examination of DNA.
What sets Genobank apart from the competition is their approach towards data ownership/privacy.
Deoxyribonucleic Acid (DNA) refers to the molecules held by all humans, which contain their unique genetic coding. By examining this code, we can learn about an individual’s ancestry, predispositions to mental and physical ailments, and more.
DNA first became popularized, and a household term, when it began being used as a means of identification – particularly in crime scenes.
In an effort to continue developing their product/services, and carve out their place in the industry, Genobank is currently hosting a crowdfunding campaign through equity investing platform, Republic.
This event, which has seen Genobank bring in roughly 175% of their minimum target, at the time of writing, is scheduled to remain live until March 14, 2020.
Investors partaking in the event will be compensated with a ‘Crowd Simple Agreement for Future Equity (Crowd SAFE)’. This is a form of agreement created by Republic, better structured towards use in crowdfunding campaigns than a traditional SAFE.
Essentially, those that hold a SAFE do not immediately acquire equity in the company. Transfer of equity only occurs when certain pre-set parameters are met, with regards to future progress/developments.
Our understanding of the insights, which the examination of our DNA can offer us, has led to a boom in companies such as Ancestry Health, 23andMe, and more. The data generated from services such as these represent the most important and intimate data of all – it represents you.
Unfortunately, we have seen time after time, in recent years, that data is abused, stolen, and generally misused. Naturally, this has resulted in large movements advocating for better privacy practices surrounding data generation and use.
Empowerment over your own data is the driving force behind Genobank. The company notes that they specifically make use of blockchain technologies to anonymize usage of their platform – allowing for clients to discover more about themselves, while retaining power over their most intimate data.
The company states,
“We use blockchain at its full potential by registering your DNA data as a unique digital asset also known as a non-fungible-token (NFT). This grants you exclusive ownership over it.”
For Better or Worse
While a lack of privacy may justifiably scare many, there are instances where access to DNA databases have proven beyond valuable.
A perfect example of this occurred in 2018, when one of the United States most infamous serial killers was identified and captured. Known as the ‘Golden State Killer’, Joseph DeAngelo was identified when a relative of his used a DNA service. This data was then able to be cross examined with DNA found at his crime scenes – providing authorities with enough information to deduce who their killer was.
While this particular instance had a positive outcome, it raises questions surrounding access to such data. If individuals who have never even used such a service can now be identified and tracked down, are any of us truly safe?
While you may not be able to control the actions of others, you can control your own data. Genobank plays to this, stating,
“Since there is only one private DNA Wallet per user, third parties will never have access to your DNA data without your explicit consent (digital signature). Only you can grant/revoke access and modify/delete biodata & records. YOU are in control!”
While Genobank has various plans for the usage of funds raised through their crowdfunding campaign, one of their more interesting plans is the launch of DNA kit ATMs.
These kiosks would deliver exactly what their name implies – a kit allowing for the analyzing of one’s DNA. The goal of which is to provide these services to everyone, as no personal information is required.
Genobank indicates that these ATMs represent one of their two projected revenue streams. The other will be a ‘white-label’ version of their kits, which is sold to health clinics, hospitals, etc.
Founded in 2014, Genobank maintains headquarters in Palo Alto, California. The company specializes in developing solutions which allow for analyzing ones DNA in a privacy centric manner.
CEO, Daniel Uribe, currently oversees company operations.
Equity Crowdfunding in North America
Since roughly 2009, crowdfunding in North America has grown steadily. The continent, however, is a large place, with clear discrepancies in regulatory approaches between Canada and the United States. The result is that these variances have led to U.S. crowdfunding becoming a runaway market, relative to Canada.
What is it?
As the name implies, crowdfunding is a means of raising capital from a large pool of investors/donators, rather than select venture capitalists.
Crowdfunding started off simple enough – give a wider audience the chance to help young companies out of the gate. However, when first capturing the attention of many, securities laws prohibited issuers from compensating non-accredited investors/participants with equity in their companies; Meaning that participants weren’t really investors at all, but simply contributing to the growth of a company with the promise of potentially getting a product one day.
Fast forward to 2012, and a group of companies surrounding the industry successfully worked with regulatory bodies in the U.S. to amend existing laws. These efforts eventually resulted in the formation of, what is known as, the ‘Jumpstart Our Businesses Act’ (JOBs Act).
What the JOBs Act did was open the gates for the general public to gain exposure to true investment opportunities. Until it was enacted, securities were only able to be sold and distributed to accredited investors.
The goal of this was primarily to help young companies, as one of the largest obstacles a start-up will face is attaining funding (regardless of potential) for the development of their products and services.
Previously, to attain said funding, regulators required that a detailed prospectus be filed and approved for the sale of any asset deemed a security. This is a cost prohibitive, and time consuming, undertaking – meaning it is most likely not feasible for a small start-up. While this undertaking may be inconsequential for a company raising millions upon millions of dollars, start-ups looking for modest amounts may find it a steeper hill to climb.
Naturally, this new act came with restrictions. In an effort to maintain appropriate levels of investor protection, safeguards were put into place. The following are only a few examples of these:
- Capital generation events must be moderated by registered broker/dealers
- Net-worth based investment limits
- Generation caps on crowdfunding hosts
While this may sound restrictive, what this did was open the doors, ushering in a time where investment opportunities were no longer restricted to those that were already wealthy.
That brings us to the United States’ northern counterpart – Canada. While crowdfunding exists in Canada, the flexibility and freedom for issuers/investors is simply not the same as it is in the U.S – despite being years removed from the advent of modern crowdfunding.
The main issue is the fact that there is no nationwide ‘rulebook’, similar to the JOBs Act, in Canada. Each of the various provinces and territories may vary slightly in the structuring of their regulations, making it difficult to comply with all at once.
This segregation among Canadian regulators, means that issuers are often limited in their investor pool, as they are not necessarily eligible to host their offering in all regions – somewhat defeating the purpose of crowdfunding to begin with.
However, with the moves taken by the U.S. government over the past decade widely viewed as a success, the Canadian government has indeed taken notice. It was announced in early 2019 that they would be reviewing their policies; the goal of which is to eliminate the current segregation among regulators, by creating their own variant of the JOBs Act.
With the Supreme Court of Canada opening the door to the potential national securities regulator in 2018, and plans to develop a national crowdfunding rulebook announced in 2019, the great white north looks primed to play catch-up.
With all of this talk about crowdfunding, many in the U.S. may be wondering where access to such investment opportunities are offered. In an effort to answer these questions, securities.io’s very own, Antoine Tardif, recently penned an opinion article discussing his favourite portals offering equity based opportunities.
For those in Canada interested in equity crowdfunding, the following are a few of the more notable portals active today.
In Other News
Always striving to adapt and improve with the times, the Securities and Exchange Commission (SEC) has recently announced a proposal which would see access to more traditional investment opportunities become even easier for investors.
This proposal is based upon the restructuring of what defines an accredited investor. With the vast majority of investment opportunities restricted to those fitting the bill, broadening the definition, to reflect the modern world, will ideally democratize investing to an extent.
WeFunder Brings Total Raised to over $15 Million with Latest Round
WeFunder, one of the most popular crowdfunding platforms around, has recently raised another $5,128,679. This event, which took place between Dec. 18 and Dec. 13, saw a total of 16 accredited investors participate.
This funding came through the issuance of equity based securities, which were sold to investors. The amount marks roughly 58% of the shares made available, as sold.
Cumulatively, WeFunder has raised roughly $15 million, to date, through participation from >850 investors.
While, at this time, it is unclear what these funds are earmarked for, WeFunder clearly outlines the company’s greater mission and goals. The following are, simply, a few of what WeFunder lists as their commitments:
- Democratize access to high-growth start-ups
- Educate investors
- Help communities fund local businesses
- Modernize laws surrounding investors and crowdfunding
For anyone curious if WeFunder has been successful in their endeavours thus far, rest assured that the answer is ‘yes.’ The company provides the following figures on their website, demonstrating the scope of their influence and reach within crowdfunding:
- >324 start-ups
- >320,000 investors
- >$115 million raised
- VCs have invested gone on to invest >$2 billion in WeFunder start-ups
With WeFunder referring to themselves as ‘Kickstarter for investing’, it should come as no surprise that the opportunities that they afford investors vary wildly. That is part of the beauty in this type of platform – start-ups of any ilk have a chance to shine. With that in mind, WeFunder elaborated on a few of the industries they have become involved in, in the following video.
In their industry, Wefunder views themselves as giants (and rightfully so). Not only are they responsible for having a hand in the creation of the industry itself, but they indicate that their investment volume equates to more than their top 3 competitors – combined. Impressive indeed.
We recently took a brief look at a few of their competitors, which include, but are not limited to, the following:
For more information on these competitors, make sure to peruse the following article. Here, Securities.io CEO, Antoine Tardif, discusses his favourite crowdfunding sites.
On the Wefunder site, a quote is provided by CEO, Nick Tommarello. Here, he touches on his mindset, which led to the creation of this company. He states,
“I started Wefunder because I wanted to invest in my friends – to help them dream bigger, be the best versions of themselves, and reach their ambition. Seven years later, we do that for the rest of America. So much raw talent is being wasted. The purpose of my life is to fix that, to help tens of thousands “take their shot”.
Operating out of San Francisco, WeFunder is a crowdfunding platform, which was established in 2011. After successfully aiding in the creation and implementation of the JOBS Act, WeFunder has gone on to be wildly popular within the world of crowdfunding, helping start-ups raise in excess of $115 million to date.
CEO, Nick Tommarello, currently oversees company operations.
In Other News
Whether operating a crowdfunding platform, providing tokenization services, etc., there have been various recent successful raises completed by promising companies. The following articles are just a few examples of this: