Tokens and Crowdfunding: A Perfect Match?

Abstract

Equity Crowdfunding allows issuers to choose the type of security offered and data shows a variety of innovative securities being offered. Among the most recent securities appearing in offering filings are securitized tokens. The first crowdfunding issued that involved a token happened December 29, 2017. Since then 18 others have filed with a securitized token tied to their funding with six of the 19 showing successful outcomes. This article examines the rise in token crowdfunding as well as the risks and benefits of using token offerings. The conclusion focuses on the use of token offering to provide a consistent secondary market for crowdfunding issuers.

Keywords: Crowdfunding, Tokens

JEL Classification: K22