Coming soon: peer-to-peer trading
Investors will be able to buy and sell company stakes, for a new way to liquidity
WeOwn’s ultimate goal has always been to make the fundraising market more liquid for both companies and investors. Soon we will be taking an important step towards transforming the end-to-end investment lifecycle by launching peer-to-peer trading.
We’re currently developing a new function which will enable members of our investor platform to buy and sell stakes in companies that raised equity through WeOwn. Here’s some more information about this upcoming service…
How will WeOwn’s peer-to-peer trading work?
Currently, our platform users can participate in investment offers by purchasing a stake directly from the issuing company. With peer-to-peer trading, we are extending the marketplace so that investors can sell their stake or purchase equity after a company’s initial token sale has ended.
We’re using the service initially to enable the resale of equity tokens, but as we continue to expand our fundraising marketplace, this peer-to-peer secondary markets will be able to support other types of asset, including debt. The technology is also a first step towards building our own secondary exchange, which we’ll be launching in 2020.
As it’s a peer-to-peer model, all communications are direct between buyers and sellers. Both participants need to be members of our platform and can only sell or purchase tokens from companies that launched their fundraising offer through WeOwn – like Project Crowd.
We’ll be launching a new ‘bulletin board’ section on the platform where investors will be able to list tokens for sale or browse live offers. Both the buyer and seller will need to have an account with us, in order to facilitate payment for the transaction.
What’s so great about peer-to-peer trading?
There are several reasons that we’re launching a peer-to-peer trading service, the most important of which is liquidity.
Many of the retail investors using our platform may have experimented with crowdfunding before, but once they’ve secured a stake, their investment is locked up for a considerable amount of time. With the WeOwn platform, soon investors will have the freedom to sell their stake on whenever they want – with access to cash as soon as someone has agreed to buy that token.
Equally, investors who missed out on the initial token sale can still get a stake in emerging private companies by participating in a peer-to-peer sale with existing token holders. Unlike some other secondary exchanges, WeOwn will enable investors to buy or sell tokens 24/7.
The service also benefits issuing companies, who can use the WeOwn platform to buy back tokens should they want to. WeOwn also records the change of ownership on the blockchain, for an up-to-date, accurate record of exactly who their stakeholders are.
Plus, increasing liquidity and access to tokens will attract a whole new group of investors that may not have been able to participate in an initial fundraising round, further increasing brand awareness and connecting companies with a wider audience.
Who will set token prices?
The market maker (either seller or buyer) will choose the price, and this will not be negotiable. Any restrictions placed on the original sale by the issuing company will still apply – for example, if investors from certain companies weren’t eligible to participate, those terms will remain in place for the secondary sale.
When will peer-to-peer trading go live on the WeOwn platform?
Our development team are working hard to introduce this new feature, and we’ll be testing a beta version of our peer-to-peer trading board during December – with the aim of launching a prototype service around the end of the year.
Register for our investor platform to be first in line to explore peer-to-peer trading when we launch the new service.