Which investment platform is right for your business?
How to pick the right partner for raising capital
All men might be created equal, but all technology is not – especially when it comes to FinTech. There are many companies out there that are interested in exploring next generation tools for raising capital and managing investor relationships, and the platform you choose to work with will determine how successful your endeavours will be.
Choosing the right investment technology is a multi-step process. Firstly, you need to decide what fundraising model you want to operate – from private offers to crowdfunding, peer to peer lending and digital asset tokenization (or STOs as many know them). But even after that decision has been made, there’s still a major question to answer: which tech provider is best to support this method of raising capital?
As experts in digital investment through security tokenization (STOs), WeOwn gets a lot of enquiries from businesses that are interested in the quicker, cheaper route our model offers. However, many of these companies are still unsure whether we have the right solution for their organisation.
This caution is fair enough; if you’re going to put time and energy into generating new resources, you want to find the best technology platform to support your efforts.
To support the decision-making process, we’ve launched a new ebook – and here are some of the things we recommend you consider before launching your own security token through an STO platform:
1. Understanding of your industry – and your goals
One reason many businesses are interested in digital asset technology is its flexibility, but that doesn’t mean a generalist tokenization platform is the best option.
You need to ensure your chosen technology provider understands the investment industry and how to fully leverage its potential, along with the accompanying legal and compliance requirements. Don’t be afraid to ask for examples and references that prove their track record.
It’s also important that the tech platform you work with is designed to support the particular asset type you wish to launch. In the early days, it’s often best to choose a solution that can tokenize equity, debt and funds to keep your options open; however, if you want to explore a niche avenue, such as tokenizing real estate, then you may be better off working with a specialist provider straight out the blocks.
2. Technology stack on which the platform is built
Many FinTech companies are successfully using the blockchain to launch secure software that enables immediate settlement and complete accuracy for investment transactions. However, the type of blockchain they’re using can have a massive impact on how successfully their technology works.
If your chosen partner is using a public blockchain like Ethereum, for instance, they are building their platform on a general-purpose network. This means that the blockchain hasn’t been created especially for the needs of FinTech users, and they are also competing for bandwidth with many companies from different industries. This can impact the stability of that blockchain’s currency, along with speed of performance.
One of the reasons that WeOwn is making inroads in investment is the fact we have created our own bespoke FinTech specialist blockchain. It’s the world’s first dual public and private blockchain, offering an extra layer of protection for our technology users, and it also protects our dedicated currency, CHX, from fluctuations in the general market.
3. Global base(s)
We recently looked at the impact of geography on digital investment in a blog post on where in the world to launch your fundraising offer, and this should influence your choice of technology partner. For example, WeOwn has roots in Liechtenstein, which is one of the most security token-friendly markets in the world.
Liechtenstein has strong regulations in place to protect the interests of both companies and investors, but the relatively small size of the country means it runs a quick and effective support network. This makes it one of the simplest places in the world to launch new digital investment opportunities.
Getting the company chemistry right
Ultimately, your choice of technology partner will prove as pivotal to fundraising success as your decision to raise money digitally in the first place; get the right provider and you can quickly launch new investment offers and/or engage existing investors to generate new funds.
Get it wrong, however, and you may find yourself locked into an expensive piece of ineffective technology.
Once you’ve made the decision to try security tokenization, don’t be afraid to ask questions to your shortlisted platforms, rather than rushing into a decision. Speaking from experience, we’d rather potential clients held open discussions to confirm whether we are the right fit with each other, because that’s the best way to ensure that everyone gets the desired result from the relationship.
Success runs both ways, and transparent communication is the best way to find everyone’s ideal fundraising partner.
For more support with choosing the right security token provider, download our latest ebook for free.