Exclusive interview. The Elephant - a tokenized platform in the private secondary market

Exclusive interview. The Elephant - a tokenized platform in the private secondary market
Jul 31, 2018 by Rico Wise

BASE.INFO team has interviewed Idan Miller the CMO of The Elephant project. We have asked the most topical questions to get acquainted with the project and to learn the future plans of the The Elephant team.

Please welcome, Idan Miller.

Please describe your company/project in 2 sentences.

The Elephant introduces the first security token backed by shares of the most promising private companies around the globe. The platform enables pre-IPO companies’ shareholders to sell their shares prior to a liquidation event and for investors to invest in such shares through dedicated partnerships represented by Digital Tokens.

Why did you decide that blockchain should be the basis of your project?

The company was founded to solve the need of Private Companies’ Shareholders for Liquidity for their Shares, given the fact that more and more companies choose to stay private for long periods, resulting in:

- These companies’ shareholders (founders, seed investors, current and former employees, service providers and to some degree even VCs) having to wait a substantially longer period before they can liquidate their shares.

- Traditional investors are denied access to the significant valuation increment that occurs prior to an IPO or an exit.

To relieve this pain, The Elephant was formed as a market place in which potential sellers (shareholders) and buyers (investors) can meet. Our mechanism was based on the creation of dedicated partnerships that buy the shares from the original shareholders and enable investors to invest in these shares by buying participation rights in these dedicated partnerships

To facilitate greater liquidity for buyers who step into the shoes of the sellers, in late 2017, the platform have decided to tokenize the participation units of these partnerships by creating a dedicated security token representing these participating units, turning them into liquid assets, governed by smart contracts.These Dedicated Tokens can be traded at any time.

The Dedicated Tokens are equity backed. Upon an IPO or M&A of the companies whose shares are held by the partnership:

- The platform operator will distribute the net realized gains to the holders of the Dedicated Tokens of these LPs;

- All Dedicated Tokens of that dedicated partnership will be burnt.

Why did you launch the ICO? Was it the only option to collect the funds?

The platform is a members-only platform. Tokens offered on the platform are security tokens.To qualify as a member and purchase PECs, an investor has to be classified as an accredited investor and pass a full KYC process.PEC will be used as our membership certificate and will entitle its holder to:

- Receive a portion of the platform’s annual revenues;

- Participate in Dedicated Token offering.

To attract as many accredited investors to sign up to our platform, we are conducting an “Accredited Investors Recruitment Program” where by investors that complete the process of registration and verified as accredited investors will be rewarded with PECs. In order to turn our platform into a leading, innovative, global platform that offers a diversified and wider range of tokenized and liquid investment opportunities, we are preforming a Token Generation Event (TGE).

The goal of this sto is to enable The Elephnat to expand its already operating platform and shares portfolio into the largest tokenized secondary market platform world wide. Participants in the STO will receive PECs that will entitle them to:

- 25% of the platform’s annual revenues up to 1.5 times their investment and 15% of the annual revenues thereafter;

- Participation rights in the Dedicated Token’s offering.

Briefly describe your team. Why these people became the engine of your project?

The Elephant team one of the most experienced team in the blockchain echo system with 120+ years of combined experienced in both tech, operation, marketing, strategy, legal, finance business development and private equity. The 7 leading team members are set to take the business and turn it into a leading world wide secondary market platform.

What are the main centerpiece and the highlight of your project? What will attract the investors' attention?

The Elephant is the only solution to solve the liquidity challenge for buyers and sellers, by combining the growing pre-IPO secondary market and the blockchain technology and related digital currencies.

We enable a low entry point for buyers and sellers, opening the secondary market to a much broader variety of players. Sellers can sell as low as $100k worth of shares. Investors can buy participation rights in such partnerships at as low as $20k by acquiring a Dedicated Token representing the participation units in these partnerships.

By connecting our Dedicated Partnership Work Model to Blockchain technology we aim to:

1. Expand liquidity to shareholders that have nil or very limited, liquidity available to them. Tokenization of previously illiquid assets may increase their market value by 10%-40% as illiquidity costs vanish;

2. Open the investment space to additional classes of potential investors, including the crypto-community, with low entrance thresholds. This also enables investors to create their own diversified “Pre-IPO Fund”;

3. Provide stability to crypto investors while connecting them to equity-backed tokens;

4. Make real-world private equity liquid through tokenization;

5. Onboard shares of off-chain companies to the tokenized economy.

What are your thoughts about ICO marketing? Can it be really effective due to all the restrictions and other phenomenas?

ICO marketing is getting to be more and more challenging. However, good projects like ours who have a real need and a real business model attached to it, can still find it's marketing channels

Why is your project better than your competitors?

We are currently the only ones who offer a tokenized secondary market process. We intend to use this fact to capture as high as possible market share and when competition arrives we will have the early mover advantage.

What are the major ways of monetization for your project?

We have a well defined business model. The Platform revenues will derived from:

- Fees from share sellers upon completion of the sale of their shares;

- Annual management fees collected from dedicated partnerships;

- A success fee collected upon a liquidation event of shares held by dedicated partnerships.

Which markets are the most attractive for you right now? Do you take in consideration the USA and other countries with the legal restrictions for the crypto crowdfundings?

As one of the leading STOs (Security token offering) in the market today, the US and Asia are our top markets.

Describe your project in 3 years? Will it change something in the world?

Sure! The Elephant intend to be a leading player within the security token (assets back token) up coming revolution which is likely to disrupt the financial markets.