Private Equity
Tokenized access to secondary shares in high-growth Series A or later-stage companies, offering liquidity, flexibility, and secure ownership through blockchain technology.
Credible provides a robust and transparent platform for tokenizing secondary shares in high-growth, Series A or later-stage companies. Through partnerships with private equity firms or brokers, investors can participate in these companies, gaining liquidity and flexibility through tokenized equity. Below is a step-by-step overview of Credible’s process.
Step 1: Identifying Secondary Share Opportunities
Credible works with private equity firms or brokers to identify investment opportunities in Series A or later-stage companies. The secondary sellers in these transactions are typically angel investors, employees with Employee Stock Option Plans (ESOP), or company founders. The instrument of investment is preference shares, which provide investors with preferential rights, such as dividends or liquidation preferences.
Step 2: Setting Up a Bonding Pool
Credible then establishes a bonding pool for the identified opportunity. The pool's target is set based on the minimum purchase requirement specified by the private equity firm or broker. This allows multiple investors to collectively meet the required capital for the investment.
Step 3: Liquidity Addition by Whitelisted Investors
Whitelisted investors are invited to contribute liquidity to the bonding pool. Each investor selects their desired number of spots in the pool by committing the investment amount. To comply with legal and regulatory guidelines, the number of investors in a single Special Purpose Vehicle (SPV) is capped at 250 participants.
Step 4: Execution of the Purchase
Once the target amount is reached, the SPV executes the purchase of the secondary shares in collaboration with the private equity firm or broker. The SPV now holds the preference shares on behalf of the pool’s investors.
Step 5: Distribution of Tokenized Shares
All participating investors receive tokenized shares representing their proportionate ownership in the SPV. These tokens, issued on Credible's blockchain infrastructure, provide investors with a secure, transparent, and tradable representation of their investment.
Step 6: Flexible Holding or Exit Strategy
Investors have the flexibility to either:
Hold onto their tokenized shares and benefit from the appreciation in the company’s valuation.
Exit their position by swapping their tokens for other equity tokens or cryptocurrencies. This decentralized exit mechanism provides liquidity that is typically lacking in private equity markets.
Step 7: Redeeming Tokens for Physical Shares (Optional)
Investors wishing to convert their tokens into physical shares can do so by completing a Know Your Customer (KYC) process and paying an administrative fee, which covers the cost of paperwork and legal formalities. Once verified, the investor’s tokens are redeemed for actual shares, enabling a direct ownership transfer.
By enabling tokenized ownership in Series A and later-stage companies, Credible offers investors a liquid, secure, and flexible way to engage in private equity markets.
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