Republic, a crowdfunding platform that allows users to invest as little as $10 in startups for returns, is launching its own security. Given that crowdfunding and crypto have increasingly gone hand-in-hand, the young platform hopes to lead the push towards tokenized securities.
Securities, cryptocurrencies, and crowdfunding — these are the three spaces that Republic’s CEO, Kendrick Nguyen, believes will soon be part and parcel of the same industry some day. Nguyen, a former New York securities lawyer himself, emphasized in an interview with Forbes magazine that SEC compliance is crucial for his young firm’s future.
Being a general counsel for AngelList for some time, he launched Republic in 2016 as its inclusive spinoff. Then, in 2017, he launched the Republic crypto brand. And now, he’s taking it one step further: offering tokenized securities, one of which will be Republic’s own.
In a recent interview with Fortune, Nguyen summarized the goal of Republic as follows:
“The vision for Republic ultimately is to be Amazon for private investing, you can’t be Amazon of anything if you just sell one product … as we look at the ecosystem it became very clear that crypto, tokenization … blockchain enabled startups, will be a key component of the business, the economy, [and this] was just a natural expansion of our core business.”
However, Nguyen never anticipated that his former background as a securities lawyer would become so integral to his future endeavors with Republic. As he told Forbes:
“I always thought the law was extremely relevant to a business, but I never anticipated that my legal background, particularly in capital markets and securities, would be so crucial to the business and product styles of Republic.”
Nguyen’s legal background gives the Republic a significant edge in being one of the first crowdfunding platforms to offer tokenized securities. Nguyen is expectedly excited about Republic’s future prospects.
“Individuals Will Soon Have the Ability to Invest in Private Securities”
Despite the current mounting legal cases against ICOs and the recent SEC enforcement measures, Nguyen believes that a future of tokenized securities is coming sooner than people realize. “For the first time in almost 80 years,” he said, “crowdfunding is providing individuals with the ability to invest in private security.”
Republic is set to release their own tokenized security, SAFT-EST (“Simple Agreement for Future Equity and Security Tokens”), in the not-so-distant future. In fact, back in June Republic announced that they had already raised over $12 million in funding commitments. Soon, investors will have the choice to invest in either Republic’s tokenized securities or its shares.
And, as Nguyen made clear, if Republic is unable to launch the token then the expected token will be converted to equity. So, overall, it’s a win-win for investors.
Do you think other firms might follow Republic, offering equity and tokenized securities? Is it fundamentally a good idea to be tokenizing corporate equity? Let us know in the comments.
Image courtesy of Republic.