Neufund announced its first security token offering or “equity token offering” last month. The first primary issuance of a security on blockchain is for its parent company Fifth Force GmbH. The offering commenced on November 27th. Neufund’s offering is described as providing an example of a product that enhances existing methods, rather than replacing them.
Amid a crypto-crises, as aggregate value has tanked in the digital asset space, Neufund is reporting solid results. In fact, as of today, Neufund states that it has more than doubled its soft cap having raised almost €3 million backed by “prestigious European investors, including VCs, angels, and private individuals.” The public offering ends on December 16th.
Currently, private investors may participate at a minimum investment of €100,000 but Neufund expects to open up the offering to a broader audience at some point in 2019.
According to Neufund, the offering has attracted a group of new investors. These include Udo Schloemer, Factory Berlin founder and CEO, Chris Zippel, an award-winning music producer and composer, and Dario Suter, a movie producer and DCM founder.
Additionally, Neufund states that existing investors, like Freigeist Capital and Atlantic Labs, have participated in the offering.
Investors may commit funds in fiat currency or ETH. In exchange for an investment, they will receive ERC20 tokens, “FTH”, operating on the Ethereum blockchain.
The Neufund offering claims to be the first “fully-compliant offering of equity on Blockchain available to the general public” in Europe. The offering is compliant under existing German securities law. Neufund adds that its platform can allow any incorporated entity worldwide to conduct a public offering on blockchain.that enhances existing methods, rather than replacing them.
Neufund’s CEO and co-founder Zoe Adamovicz, who advises Germany’s government on distributed ledger technology, described investor interest in the ETO as “overwhelming.”
“It is the first time such a diverse group of investors could come together so easily and invest within the same round. Blockchain-based equity fundraising offers highly liquid assets with codified functions such as dividend distribution and automated compliance – features that are beneficial to both companies and investors. Blockchain is not just cryptocurrencies: It is, above all else, a powerful technology enabling us to build better financial services,” said Adamovicz.
Neufund says the ETO combines the advantages of a traditional VC round, an IPO, and an ICO (initial coin offering). Issuers may raise funds in ETH and EUR, enable tradability of tokens on secondary markets, conduct follow-on funding rounds and build in utility functions that enhance the governance of investors.
Michael Jackson, VC and board-member of Volvo Cars, AXA Insurance, Blockchain and Kneip Communications, calls Neufund a “refreshing wind of change in the traditional VC and private equity worlds.”
“Digitizing real-world equity into blockchain-based tokens brings a variety of benefits: Increased liquidity, programmable functions, full transparency, automated compliance, to name just a few. I’m excited to support Neufund, and truly believe we are on the way to making fundraising much more accessible,” stated Jackson.
Neufund plans on listing other security tokens for public sale in the coming weeks.
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