Human relationships are a fundamental element in private investing. How can technology help investors to create closer quality partnerships?
Human relationships are a critical component of venture capital (VC) and early-stage private equity investing, and this will never disappear. However, new technologies – including distributed ledger technology (DLT) – could help augment the investment process, to the benefit of issuers and allocators.
Historically, fundraising has been a laborious and time-consuming endeavor for start-ups. It is a documentation heavy process requiring many intermediaries, which ultimately creates inefficiencies and hinders growth. Increasingly, issuers and investors are evaluating the merits of DLT as a means by which to speed up the investment process and eliminate unnecessary steps in the value chain.
One of the primary benefits of DLT is that it enables investors to receive information and reports directly from the founders and from the very beginning start a direct relationship with the company. An emerging phenomenon suggests that companies that tokenize data and equity offerings are receiving exposure and distribution among investors more in line with their core parameters, potential, and risk profiles.
One of the key aspects of DLT is that it moves away from the push/pull model where information is pushed or retrieved by users or mediated by software. DLT allows data to be propagated across investors networks instantaneously while specific actions are automated. This leads to a better user experience, reduces the distance between founders and investors and fosters a more human and direct relationship.
The automation benefits of DLT are also highlighted by Chris Wilk, CEO of Aequitec. “Issuers can now automatically create…
to read more, download the article here.
About the author
Massimo Butti, Head of Equity at SIX Digital Exchange
Massimo is dedicated to enhancing the funding process for private companies and improving the issuance, custody, and transfer of digital securities in SDX’s regulated CSD. He is responsible for reinforcing the interaction and collaboration between equity investors and companies in the digital age.
