NCFA Canada | April 5, 2017

With NCFA Blockchain Advisor and Founder/CEO of TokenFunder, Alan Wunsche, having an active Initial Token Offering (ITO) in the market until it closes April 30, 2018 (available to all types of investors including retail), we thought it would be a great opportunity to interview Alan to shed some light on the TokenFunder vision, ITO itself, and roadmap ahead.

What drives you forward personally with TokenFunder?

Alan:  What drives me forward are possibilities for economic innovation and a transformation of finance with new technologies. We’re seeing the decentralization and democratization of finance through open source monetary systems on blockchains.  This is real fintech innovation happening right now.  Programmable blockchains combining a smart contract (called a “token”) with multiple features such as the ability to easily send cryptocurrency – that is our future now.  With cryptocurrency, investors around the world can be direct investors in a startup. At TokenFunder, we want to make this funding option possible for all companies.

You’re a blockchain expert but also a CPA.  Can you provide a regulatory perspective on the innovation of digital coins and token offerings?

Alan:  As a CPA, I’m a professional who cares about investors and getting transparency and disclosure for investors. Permissionless and direct investing sounds incredible but most investors know that investing in general is a regulated space and investing in public companies differs from investing in private companies, especially with early stage projects.

In 2017, while TokenFunder was working with the Ontario Securities Commission LaunchPad, we experienced an explosion of Initial Coin Offerings (“ICOs”) around the world. Over $6B was raised by ICOs with blockchain tokens and these projects proved the power of the technology to enable permissionless investing.

Many of these ICOs became black holes that offloaded most of the risk onto their investors.  One big problem with many ICOs is that purchasers (contributors) received coins/tokens but no rights in the company. Many ICO projects encourage a pump and dump mentality full of speculation with large pre-ICO discounts and it’s difficult to know who’s involved and the real value of the project.  Ultimately a lot of hype…and in many cases investors aren’t getting a level playing field. You can imagine how that’s a big issue for regulators. We also think investors will demand more.

"TokenFunder foresaw these issues and so we chose to offer regulated security token offering from the start."

What is TokenFunder’s vision?

Alan: TokenFunder’s vision is to transform venture financing by empowering investors to invest directly in the most innovative startups through the power of a regulatory-compliant blockchain-powered funding and growth platform.  Thousands of startups are building large networks of financial and advisory supporters quickly, efficiently, and securely through blockchain technology.  Through cryptocurrencies, blockchain technology is unleashing a global and borderless capital network, and TokenFunder will empower businesses to directly leverage a global capital network that can accelerate success.

A core component of TokenFunder’s vision is being a regulatory-compliant leader in the sector. We’ve worked closely with securities regulators and will continue to seek regulatory approvals that supports a healthy innovation investing ecosystem in this new and exciting blockchain-power era of digital finance. Our roadmap, subject to regulatory approvals, includes liquidity on a trading platform of tokens we issue as well as other tokens.

What is TokenFunder building?

Alan:  TokenFunder is building a platform that will reinvent venture capital with a trusted, regulated end-to-end blockchain token launch and governance service to help innovators fund and grow their businesses. We call the core platform STAMP - a Smart Token Asset Management Platform.  We’re designing the platform with best practice governance features from traditional venture capital such as milestone-based tranche payments. We’ll also be encouraging advisors to engage with the companies through the platform in an advisory token economic model.

What is TokenFunder doing differently?

Alan:  At TokenFunder we came to the market with a new proposition -- to build a platform that would bring the global cryptocurrency pool to companies in a way that included governance features.

The first step was to have Know Your Customer (“KYC”) verification checks in our processes and also to check for investor suitability.  Think back to all the 2017 ICOs that took in funding anonymously, who didn’t know where the funds came from and whether their project was a suitable investment for the backer. Without this information, they literally can’t care about their investors even if they wanted to.  This is naturally a problem for securities and investment regulators whose mandate is investor protections.

Before you can invest in TokenFunder’s Initial Token Offering, we have KYC verification and suitability checks. We’re building KYC whitelisting into the FNDR token that we’re going to distribute to our token holders so you’re not going to be able to invest anonymously.

TokenFunder has an active ITO where any investor can participate in future revenue sharing from TokenFunder profits.  Can you tell us about the opportunity?

Alan:  Important to note that you can invest in TokenFunder’s ITO until the opportunity closes at the end of this month on April 30, 2018.  Our token holders will share in 80% of the future distributions based on the business profits.  Once the ITO closes, all investors that participated in the ITO will receive their FNDR tokens and we’ll be swiftly moving forward with the business roadmap to seek the required regulatory approvals to have the platform registered as a regulatory-compliant token issuance and trading platform.

What does it mean to be a token holder?  Do token holders get equity or special participation rights?

Alan:  Token holders are essentially a special class of share with rights to the future distributions made from platform profits. While token holders don’t vote on Board representation, we do in the future plan to give token holders a voting mechanism on the companies that are accepted to the platform.

FNDR token holders will receive a proportionate profit share based on the revenues generated from TokenFunder service fees paid by businesses who use the funding platform and network.  TokenFunder will also receive a portion of the tokens issued by business customers. As this is a security and this is a forward-looking statement, I need to add that the fee model may of course change for competitive and other reasons.

Finally, we expect FNDR tokens to be liquid -- with the appropriate regulatory approvals and restrictions -- and be tradeable on our own exchange or listed on third-party regulated exchanges.

How retail and accredited investors become FNDR token holders:

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The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry in Canada.  For more information, please visit:  ncfacanada.org