Tokenising equity of AG (Aktiengesellschaft) in Liechtenstein
How far are we away from that tokenizing equity of a company gets more mainstream?
We personally see there are many benefits of tokenizing equity of an existing or a new company. Either when you are trying to pool a certain investor group into an SPV or preparing your next big fundraising after your family and friends round was done the traditional way, to tokenise the equity helps also especially in the administration of many small investors and for this reason its best to start early but in this case where should you start? The most important is to create your audience early, that could be investors, family, early customers and suppliers. Those are the most valuable assets trough your fundraising process over the next decade.
Choose an Investor Dashboard (KYC/AML)
Suddenly you need to manage your Investors better and especially make sure to stay fully compliant within your jurisdiction where your company is incorporated. For this you have 2 options you either buy a ready-made KYC template which is not customized to your needs but could easily help you deploy and let potential investors sign up through the interface.
Or have a ready-made solution for your Jurisdiction
This can be an option if you have a great budget and enough time to prepare a special way you want to engage with your future Investors. We at Equanimity AG have the philosophy to execute fast — therefore if you want to have a ready-made solution for the jurisdiction Liechtenstein for tokenizing equity, bonds or convertible bonds feel free to reach out to us we are very flexible sharing the repository access so you can deploy it for yourself, especially if you are a promising Entrepreneur who just needs help to get things going into this direction. If you need a last legal inspection we can also help you with that through our Partner Florian Scheiber who owns the firm Scheiber Law.
Now Investors are onboarded what’s next?
Once you are in the position that future Investors are willing to subscribe to your offering you should have sufficient compliance in space to make sure that your procedure regarding KYC and AML are covering highest standards. As if you choose the wrong partner regarding compliance you might end up having difficulties to exchange your Bitcoin or Ethereum into USD/CHF/EUR for example. Don’t make this rookie mistake and focus on your compliance. If you want a second opinion feel free to reach out to us as we usually work together with BDO Liechtenstein and their internal compliance department along with guidelines from other financial institutions who you work with e.g Banks or Digital Assets Exchanges.
Smart contracts and automation
So once the first investors are fully ready to invest, which is an approved KYC Statuts within your Investor Dashboard you could provide them the information to invest in your offering e.g through providing the smart contract address of the contract which is a reflection of the offering document, for example, an approved prospectus or any other Simple Agreement for Future Tokens (SAFT) if you do a more private and discreet funding round. ESMA recently also updated their Q&A regarding the new prospectus regime within the European Union which should make it easier for SMEs, Entrepreneurs to structure offer documents in a more straight forward way, which should also be faster. Please note that if you are accepting Bitcoin and FIAT — that your investor dashboard also supports this that you don’t end up in a lot of manual work. We believe in the ERC-20 standard from Ethereum regarding such offerings it can work for tokenizing equity, tokenizing other financial instruments like Bonds or Convertible Bonds. But you have also to make sure to fully comply herewith local regulations and anti-money laundering practices. (e.g try to solve to always know who owns the token :)) if you don’t want to do the research and development yourself — reach out to us we love to work with Entrepreneurs.
Conclusion
- make sure your compliance is in place (KYC/AML)
- make sure you engage with your investors as early as possible
- make sure you have your technical setup (smart contracts, etc.) in place
- engage with your investors also after the offering through the investor dashboard
- choose the right jurisdiction.
PS If your offering is outside of Liechtenstein and you have already all the legal, compliance and technical to-dos outlined please get in touch with us we are eager to acquire this knowledge if the jurisdiction is promising.
If you want to get updates on what we are working on in Liechtenstein just go here https://equanimity.li/tokenizing-equity-of-ag-aktiengesellschaft-in-liechtenstein/ and subscribe.
