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.
“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.
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.