Tokensoft, a digital securities platform for enterprises and financial institutions, has used blockchain tech to distribute equity to investors in a $4 million funding round.
The seed round, which commenced in July 2018, was co-led by Base10 and e.ventures, with Coinbase Ventures and Fidelity-affiliate Avon Ventures also participating.
The investors receive a digital representation of their investments (based on a Simple Agreement for Future Equity, or SAFE, model) on the Ethereum blockchain using the ERC-1404 tokens to ensure the SAFE agreements will be enforced on-chain. The ERC-1404 standard is used for accounting and compliance purposes.
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“While many in the industry speak of the benefits of digitizing private capital markets, Tokensoft has actually done this with its own shares,” said investor Meltem Demirors, a who has been working with the Tokensoft team since 2018, in a press release.
“I have the ability to hold shares in my wallet, receive dividends, bids or offer shares and gather real-time market data that facilitates price discovery,” Demirors added.
According to the company, investors in TokenSoft equity can or will soon be able to benefit from real-time authenticated access to ownership information, with the provenance of transactions recorded on the Ethereum blockchain.
In addition, investors will receive real-time periodic dividend payments in the form of U.S. dollars through integration with Signature Bank’s digital payments platform, Signet, as well as DTAC, a Securities and Exchange Commission-registered transfer agent.
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When activated under the SAFE agreement, shareholders will have access to a secondary market where they can buy and sell their shares.
“We have proven with our customers that the blockchain can streamline and automate secondary transfers,” said Tokensoft CEO Mason Borda.