Ambisafe’s Orderbook is democratizing financial markets by issuing on-chain shares of a fund tracking economic interest in SpaceX. The goal is to make traditional financial instruments more accessible to people globally.
Let’s start with SpaceX.
I’m sure you have heard about the company’s success; from launching cargo to the International Space Station to their upcoming manned missions , as well as their announcement of a flight to the moon.
Want to be a part of this story? I don’t mean writing your name on a rocket or volunteering to go to Mars. What I mean is do you want to become a shareholder of a legendary company founded by Elon Musk.
It’s an exciting possibility. Everyone could have their own reasons for investing in SpaceX, whether it be faith in Elon Musk’s success. The prospect of space travel, the colonization of Mars, or simply excitement about the company’s financial success (SpaceX’'s valuation has grown to <a href="https://edition.cnn.com/2019/01/03/business/spacex-valuation-500-million-fundraising-round/index.html" target="_blank" rel="noopener">to 31 billion dollars</a> since 2002).
Many investors are already engaged in private equity investing (private equity) - shares of companies that are not publicly traded on the stock exchanges.
According to Robert Himler, head of business development for Equidate , “almost everyone” wants to invest in Elon Musk’s company. “Wherever I travel around the world, investors of all types — individual, family funds, hedge funds, government funds, and investment companies — everyone wants to get into SpaceX” he says.
Let's imagine for a moment that you and I wanted to buy shares of SpaceX. It seems like it should be easy: register on a stock exchange, buy the stock and watch as it trends upwards. It’s not so simple.
<u>The problem</u> is that SpaceX is a private company; meaning that its shares are not publicly traded on the public (NYSE or NASDAQ) exchanges. There are actually only a few ways to buy SpaceX shares:
Wait for the next round of investment. During its next investment round, SpaceX will choose new investors, however, it will most likely choose only large funds that are ready to invest more than $ 10 million.
Buy SpaceX shares in the secondary market, that is, from those who were able to buy shares earlier. But minimal investments usually range from around $200,000 and require a lot of time and paperwork.
Wait until SpaceX goes public (through an IPO), and it’s shares become available on major stock exchanges.
Not an accredited investor, what should ordinary people do? That question was asked recently by discussion participants on Reddit after SpaceX attracted another round of investment and went up from $ 24 billion to $ 31 billion.
Maybe the first thing that comes to mind is: why not let one large investor buy a block of shares, and then resell them, even with a surcharge, to everyone? Other hurdles exist with this option:
Legislative restrictions. In jurisdictions such as, for example, the United States and the European Union, only qualified investors can acquire company securities. In the US, these are people with incomes of $200,000+ per month or owners of assets starting at $1 million.
The complexity of administration. When there are a couple dozen of such buyers, it is still possible to cope with tracking documentation and processing transactions. But when there are hundreds of thousands of buyers, the cost of processing smaller transactions can exceed the profit for the intermediary. That is why investment banks require a minimum investment fo $200,000 to get down to business
Pricing. Some companies do not want to be public for objective reasons. Elon Musk regretted that he had made Tesla public, and even thought about making it private again. When a company's shares are freely traded between a large number of participants, speculative interest arises, and this creates additional difficulties for the company itself in work, communications, and attracting new investments.Because the share price must be fixed. But one cannot force a large number of participants not to speculate and not to resell stocks at a higher price.
What’s the solution?
This is where the blockchain comes into play. Ambisafe has already conducted more than 30 succesful tokenization of assets and sales of various crypto start-up tokens. And we wondered why tokens don’t represent economic interest in pre-IPO companies like SpaceX. It is an interesting idea, isn't it?
We consulted with a variety of our partners from banking - US Capital Global, an SF based investment bank, to legal, we partnered with Zegelman Law Group - a legal firm specializing in securities and blockchain technology.
What we did?
In partnership with US Capital Global, Ambisafe created a seperate fund - Unicorn Equities. The charter of the fund states that the shares of USPX tokens will be issued on the Ethereum blockchain. With funds raised from the sale of tokens, the fund buys SpaceX shares with the help of US Capital Global. Thus, the owners of the token own a part of the fund that owns the shares of SpaceX. Each time SpaceX’s value increases, tokens owners will be able to sell their tokens at a new price. And when SpaceX IPOs, the fund will sell the basic shares and distribute the income between the holders of tokens.
The blockchain simplifies and automates the fund administration. Ambisafe’s developed a RAP (Regulatory Aware Protocol) in combination with the decentralized Orderbook platform on which tokens will be sold. This allows us to comply with legislation in various jurisdictions and fix the price of the token so that Elon Musk and SpaceX do not need to worry about speculators. We can also configure in which countries and to whom the token can and cannot be sold.
Out of all the potential options to purchase SpaceX we believe shares on the blockchain is the the best option to allow retail investors globally to own economic interest in SpaceX.
<b>The costs of organizing the transaction using blockchain technology we can make the token available for a minimum purchase amount to $100. You can buy economic interest in SpaceX for just $100! Compared to the minimum $200,000 investment required on the private equity market.</b>
SpaceX can now raise funding from a small investment fund that wants to diversify its portfolio, as well as an ordinary IT representative, and any other average person.
The democratization of access to SpaceX shares is only the first step. Next, we plan to tokenize the shares and other pre-IPO companies, "unicorns".
So whats next?
To date, we have completed legal preparations. The sale of USPX tokens will be opened in early April. In the meantime, you can subscribe and follow the news at https://spacex.orderbook.io/.
We will also be happy to answer questions in our chat on Telegram.