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The Modern IPO Is Useless. Let's Reinvent It

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Re: The Modern IPO Is Useless. Let's Reinvent It

#11

Post by ringaroundthetx »

omarchowdhury wrote: post #10
charlesdm wrote: post #9

Earlier quoted context omitted.

Not if they are tradable and (semi) liquid? Isn't that the whole point, to raise capital through an ICO + eventually make said tokens (representing equity) tradable from the start, so you have liquidity?

Yeah, I don't understand why he's contradicting himself.

Do you two understand securities laws?

So properly registered startup securities cannot be traded on properly registered securities exchanges.

If they are not properly registered and only sold to accredited investors, then they can only trade OTC to accredited investors.

The costs of registering to trade on properly registered securities exchanges are too high for startups.

The ongoing costs of transparency for publicly traded securities are too high for startups.

Registered broker-dealers that are able to trade properly registered tokenized assets do not currently exist, even if a tokenized offering were to properly register as a publicly tradable security.

Currently, people are avoiding all of this and get tradable assets with near-zero compliance costs. The rebuttal isn't "just register", it is "just register at a very high cost and lose all the benefits you already enjoyed at a lower cost and lose every possible service provider for the foreseeable future"

Re: The Modern IPO Is Useless. Let's Reinvent It

#12

Post by omarchowdhury »

ringaroundthetx wrote: post #11
omarchowdhury wrote: post #10

Earlier quoted context omitted.

Yeah, I don't understand why he's contradicting himself.

Do you two understand securities laws? So properly registered startup securities cannot be traded on properly registered securities exchanges. If they are not properly registered and only sold to accredited investors, then they can only trade OTC to accredited investors. The costs of registering to trade on properly registered securities exchanges are too high for startups. The ongoing costs of transparency for publi…

Yes, I understand securities law. There will be proper avenues to trade tokenized securities within the next 12 to 24 months. There is atleast one high profile crypto exchange in the U.S. working on this that I've learned from an inside source. Your argument is essentially that the infrastructure hasn't caught up yet. It would be naive to think that it won't, especially if tokenized securities are going to be a massive market.

Re: The Modern IPO Is Useless. Let's Reinvent It

#13

Post by ringaroundthetx »

omarchowdhury wrote: post #12
ringaroundthetx wrote: post #11

Earlier quoted context omitted.

Do you two understand securities laws? So properly registered startup securities cannot be traded on properly registered securities exchanges. If they are not properly registered and only sold to accredited investors, then they can only trade OTC to accredited investors. The costs of registering to trade on properly registered securities exchanges are too high for startups. The ongoing costs of transparency for publi…

Yes, I understand securities law. There will be proper avenues to trade tokenized securities within the next 12 to 24 months. There is atleast one high profile crypto exchange in the U.S. working on this that I've learned from an inside source. Your argument is essentially that the infrastructure hasn't caught up yet. It would be naive to think that it won't, especially if tokenized securities are going to be a massi…

Right, that is a possibility. Overstock is also working on it.

But even going that perspective is going to coincide with scalability and UI improvements which make decentralized exchanges better.

These structures will have no entity to register as a broker-dealer and are incapable of distinguishing between any smart-contract's legal status

Re: The Modern IPO Is Useless. Let's Reinvent It

#14

Post by alexasmyths »

omarchowdhury wrote: post #2

It's being reinvented. It's called an initial coin offering. And now I shall drown in downvotes. I'll redeem my self with a non paywall explanation of Social Capital's S-1 filing: https://www.recode.net/2017/8/23/16194374/social-capital-inv...

An ICO and an IPO are not comparable - other than the fact they 'raise money' for the issuing company.

The notion that most large companies are going to offer 'coins' that have no use or economic basis - or legal right to assets of the company - is in any way scalable for the economy is ... well ... unfeasible.

IPO's are not 'broken' - other than perhaps some extra layers of regulation, what is 'broken' is companies making money and having sustainable business models

There are a lot of private companies that could be publicly listed, much earlier than 'unicorn stage' - the problem is there isn't enough 'hype' because they're not huge, and there's not enough shares (and frothy banker's commissions) to go around.

The 'solution' to the difficulties of IPO have already arrive: massive, late stage funds. The D and E round deals, which are quite large, are now taking the place of IPO's at least for companies that wish to continue growing while not necessarily generating a huge amount of profits.

Surely some of the bureaucratic elements of being a publicly listed company could have a re-look - but there's no magic model, I think, at the end of the day.

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