Tokenized Equities Will Ensure Long-Term Value for Investors

Traditional methods of fundraising are plagued with a challenges that makes it difficult for businesses to keep up with fierce competition within the ecosystem. This is even more true for startups. Regulatory preferences, the reluctance of banks and financial institutions to issue loans and the difficulty in convincing independent investors are some of the factors that make it difficult for businesses to find adequate funding via conventional methods

Opposite sides of the coin

These methods and the innovative ICO model represent two extremes of fundraising techniques that maintain peculiar advantages and disadvantages. Much flexibility is introduced by tokenization technology. Breaking down products into transferable units whose value is totally dependent on market forces has introduced an interesting dynamism for both token issuers and their eventual holders.

ICO methods of fundraising destroy such barriers as geographical restriction and class-based segregation. ICOs help open up the market to a diverse and global audience. However, sometimes tokens are offered almost as an afterthought without any firm connection to the underlying business.

Balancing the equation

Balancing the system implies finding a meeting point where business owners and token issuers can find full expression. Such a system will enable them to enjoy the benefits of decentralization and tokenized technology without experiencing the traditional resistances. At the same time, investors and token holders should be made to hold onto equity that goes beyond just tokens…

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