Designed to capitalize on what the pair describe as the coming decentralization of capital markets, the Global Public Offering Fund plans to use an initial coin offering (ICO) to raise capital to invest.
“Long term, ICOs are the future of the capital markets,” he told CNBC, pointing to that increasingly popular process in which start-ups bring in millions of dollars by issuing blockchain-supported virtual tokens to investors in exchange for money.
“The tokenization of capital is really the future. It’s going to provide new levels of liquidity and new levels of transparency. You already have most of the major exchanges with major blockchain initiatives,” said Stewart.
In fact, he said, blockchain-based tech will “evolve the global capital markets and create new paths for capital raising, liquidity and governance.”
ICOs are essentially a form of crowdfunding, allowing a larger and wider pool of investors to buy into a company or technological idea, but it’s not without controversy.
The ICO market is largely unregulated, but it continues to attract mainstream investor attention. There is still a lack of consistency in the methodology of pricing a token, and the limited due diligence required to initiate a sale presents both risk for participants.
“Conducting our own ICO will provide valuable learnings and allow our portfolio companies to have a front row seat in defining what constitutes a global public offering,” said Compton.
“There are obvious advantages to blockchain-based technologies, distributed ledgers and smart contracts and they will help to evolve financial systems everywhere. Our hope is to advance the current state of the art and utilize the GPO Fund to make long-term and constructive contributions to the global capital markets.”