(This post originally appeared on The Washington Post)
Want to take your small business public? It doesn’t matter what you do or how profitable you are. You don’t have to be a hot technology company and you don’t even need to have any employees. Just sign up with Valu and start selling shares.
According to this story in Bloomberg, the Japanese start-up is enabling any individual or business, from “fisherman and YouTube celebrities to pastry chefs and social media mavens” to sell shares (called “tokens) in themselves or their companies to the general public. They set a price and then attract buyers by offering extra goodies — like free services or products or special deals — which then hopefully entices investors to buy and then trade on the Valu exchange for which the company earns commissions. It’s part crowdfunding, part trading marketplace. And it’s completely legal.
Because the company is in Japan and the “tokens” are based in the digital currency bitcoin, they don’t fall under any securities regulations monitored by Japan’s Financial Services Agency. “It is a relatively easy environment for a new fintech start-up,” Koichiro Ohashi, a partner at Greenberg Traurig’s Tokyo offices, told Bloomberg.
As you would expect it’s a risky bet for investors — and for good reason. Besides the speculative nature of bitcoin, there’s also a serious lack of oversight.
Valu isn’t the only start-up that’s helping small businesses raise capital without coming under the scrutiny of regulatory agencies. Last June I wrote about companies that were generating huge amounts using Initial Coin Offerings and since then there have been many other stories of companies taking advantage of similar schemes backed by bitcoin and other digital currencies to raise capital.
But Valu has made this simpler and is dealing in smaller amounts for much smaller companies. Of course, “smaller” is relative. One young “cosplayer’s” 5,000 shares that she issued are now trading at a current bitcoin value of more than $200,000.
No comments:
Post a Comment