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Vertalo announces commercial availability of V-Token technology

Tony Zerucha

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Today, Vertalo, a cap table and investor onboarding platform for real estate, private equity and venture-funded companies seeking secondary liquidity, introduced its ‘V-Token’ technology to the general public.

Rather than before or during a fundraise, the V-Token is meant to be issued at the close of a capital formation or fractionalization event, to either investor-supplied or custodial wallets, with the express purpose of saving time and expense for issuers.

Built by Vertalo for its own STO in early 2018 with two securities law firms and a renowned international tax and consulting firm, the V-Token is an ERC-20-derived token that is issued with customizable transfer and trade restrictions set for and by issuers and their legal counsel. V-Token is not meant to be the only digital asset token that an issuer will ever need. Rather, Vetalo’s V-Token is created to act as a placeholder – or form of warrant – that can be issued by any company that is raising capital or fractionalizing an asset. By leveraging the restriction period required in Reg D fundraises, the upgradeable V-Token enables the concept of ‘optional tokenization’ at the same time that it enables the company raising the capital for focus on other important goals before turning to the work of designing, constructing, testing, auditing, and listing the token.

The current high cost of tokenization is the main impediment to widespread adoption and roll out of digital assets.  Today, issuers who are interested in digital approaches are being asked to spend hundreds of thousands of dollars to design and produce tokens before they have successfully raised capital.  The unit economics need to change.

Vertalo CEO and Cofounder Dave Hendricks has been an advocate of radical change in the costs and complexity of digital asset issuance since he started work on the Vertalo STO in 2017.  He says, “Free tokenization is a logical next step in the evolution of the digital asset industry.  But as we have seen with previous protocol standards like ethernet and TCP/IP, it’s difficult to monetize the standards themselves.

“The role of tokens is naturally subordinate to actually raising capital.  It’s been amply demonstrated that investors don’t invest in tokens, or in token standards, rather they invest in companies, assets, access to liquidity, and revenue streams.  Free token issuance reduces the risk and complexity of tokenizing assets.  Delaying the choice of which  security token standard to use until the infrastructure is more fully developed lowers the cost and risk of token implementation.”

The Vertalo V-Token approach is compatible with all known issuance platforms, including existing Vertalo issuance partners like Securrency and TokenSoft.  Broker-dealers who are partnered with Vertalo and their issuer clients have access to the free Vertalo V-Token when they sign up as a client of Vertalo’s compliance, onboarding and cap table platform services. Moreover, for clients of Vertalo’s Cap Table and Compliance platform and its channel partners, the V-Token is free.

Digital asset tokenization is an emerging mega trend that  promises improved liquidity for currently illiquid asset classes like real estate, debt, private equity, and venture capital.  Vertalo continues to refine and expand its offerings to enable any company or asset owner to consider and adopt digital asset investor data management processes.

 

Tony Zerucha

Tony Zerucha is an alternative finance journalist with more than seven years experience in the space. The author of more than 1,000 articles, Tony was named LendIt's 2018 Journalist of the Year.

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