Our pre-IPO tokens will be listed on multiple decentralized trading platforms, including Orderbook and Vertex.Markets.
Individuals will be able to set the price for their tokens, allowing token holders to trade freely based on supply and demand.
When the pre-IPO company goes public, token holders will have a cash-out event; receiving a payment equal to the number of token they hold multiplied by the new token price. During the cash-out event, the token price will be determined by the price of a public share of the company.
Currently, in order to buy shares in leading private companies there is usually a minimum of $50,000 or more.
With Orderbook, you can buy economic interest in these companies for as little at $100.
Purchasing shares in top high-growth private companies today usually takes weeks and involves a great deal of effort communicating with companies or coordinating large purchases through secondary markets.
Using the blockchain, Orderbook is creating new levels of efficiency in paperwork and ownership tracking. By using the blockchain as our cap table we allowing our traders you to buy, sell and trade Pre-IPO tokens with a click of a button.
Private equity is a type of share representing ownership in an interest or an entity that is not publicly listed or traded. Traditionally, private equity has been owned by high net worth individuals, funds and firms as the minimum investment has historically been over $20,000.
The secondary market is where investors buy and sell securities they already own. It is what most people typically think of as the "stock market," though stocks are also sold on the primary market when they are first issued.
Historically, there has not been much of a secondary market for private equity. Most investors purchasing or earning private equity were intended to hold until the company either goes public or is sold. If an investor wanted to sell their private shares, then depending on their agreement with the company, they may have needed company approval to change their position on the cap table to someone who purchased their position. However, in the last 5 years a secondary shares market has been emerging and experiencing rapid growth to provide liquidity to these investors. According to Forbes: $49B was raised in 2016 by secondary funds, vehicles that specialize in investing in this market. In 2017, the volume of secondaries transactions reached around $58B
There are currently only a few ways to invest in most pre-IPO private companies:
Wait until there is another round of funding. During the next round of financing, the pre-IPO company will select investors, however, as a high profile company, it is likely to only select high profile investors who are willing to make large investments of over $1M.
Buy shares on the secondary market. Currently, there are a few secondary markets for private shares. However, the minimum investment tends to be between $20,000 and $250,000 and can involve a lot of time and paperwork.
Wait until the company goes public and is available on major stock exchanges.
Partnering with an Investment Bank, Ambisafe is launching a fund, that buys shares of the pre-IPO company on the secondary market. The token represents a share in the fund that owns an economic interest in the shares of the company. The fund is set up in such a way that token holders are expected to get financial returns, equivalent to what owners of the shares get*, minus certain applicable fees and expenses: every time the company valuation increases, token holders would be able to trade their tokens at the new price. Once the company goes public, the fund will sell underlying shares and distribute proceeds among token holder cryptocurrency wallets.
This is as close as we can get to having shares of large private companies on blockchain today, but Ambisafe is committed to moving the actual shares of other companies to the blockchain in near future.
*small deviations are possible due to reseller fees and currency conversion rates. Token holders are not shareholders of the company and do not get any voting or information rights from the company
A token is a particular cryptocurrency unit, issued on a blockchain. Usually tokens represent a real-world or digital asset or has some specific value in some applications and services. A token sale is an offering of tokens for selling to the public, subject to applicable laws, in exchange for other cryptocurrencies (BTC, ETH, etc) or fiat (USD, EUR).
Unlike utility tokens which only grant you access to a particular service, security tokens can be backed by real assets and grant additional features, such as voting rights or participation rights in profits. Pre-IPO tokens are securities under most countries laws, which may cause some limitations in token distribution. For more details, please, explore Token Sale section of this FAQ.
Ambisafe. Launched 30 token sales, with 250,000 contributors and $300M raised in total.
Orderbook. Decentralized ICO platform with 40,000 users with integrated KYC verification. Token sales will happen on its infrastructure.
US Capital Global. Launches a fund with Ambisafe to purchase pre-IPO shares or derivatives for tokenization.
The price of each token is based on the price of the most recent publicly disclosed valuation of the company, plus management fees. The token price is not based on market demand; meaning that supply and demand do not determine the price.
The price of each pre-IPO token changes when company has a publicly disclosed and verifiable change in valuation. This usually occurs when the company raises a new round or has their valuation determined by an auditor. At this time Ambisafe will re-calculate the token price based on the new valuation and investors will be able to sell their tokens at the new price.
Should the company go public, it is anticipated that all token holders will have a buyout event. Whereby, the token price will be determined by the price of a public share of the company 6-months after the IPO. Token holders will receive a sum in OUSD or a similarly situated “stable coin” equal to the value of their tokens, which they can redeem for a USD wire transfer to their bank anytime, or use to purchase other crypto currencies.