,
8 tweets,
5 min read
Read on Twitter
0/ Issuing Security Tokens in 2019: Hype v. Reality. #sto #dso #TokenizeTheWorld #tokenize #smartsecurities #digitalsecurities
1/ Hype: Security tokens (#stos) reduce issuance costs vs. traditional private placement.
Reality: In 2019 issuing a security token costs as much if not more than a traditional private placement
In time & over the life of the ST this may prove true (still tbd)
Reality: In 2019 issuing a security token costs as much if not more than a traditional private placement
In time & over the life of the ST this may prove true (still tbd)
5/ More on above: @barrysilbert’s Second Market had trouble making liquid market for pre-ipo @Facebook shares. I expect series B sized issuers will face an even harder battle
6/ Hype: “if you build it they will come”
Reality: the launch of a #sto, does not mean a successful financial raise. Issuers still must spend months meeting investors to secure capital, often w/ support from a 3rd party broker dealer (further raising costs)
Reality: the launch of a #sto, does not mean a successful financial raise. Issuers still must spend months meeting investors to secure capital, often w/ support from a 3rd party broker dealer (further raising costs)
7/ In sum, prospective #STo issuers should understand challenges ahead of time. These are the early days & we are likely years away from real liquidity. Appropriately weighing costs/risks against benefits will lead to a healthier security token industry w/ better issuers. Fin
