The Elephant platform, formerly PrivatEquity.biz, aims to give investors access to private shares of leading pre-IPO unicorns. The Elephant fills a particular need––its innovation lies in bridging the gap between the crypto and secondary investment markets.
In 2014, The Elephant’s platform development began, and by 2016, over 2,000 investors had signed up. Now, in response to a growing secondary market and increasing usage of blockchain technology, The Elephant is launching a private sale of its security token. Funds raised will go toward expanding the already functioning platform and to upgrade blockchain technology to support the tokenized secondary market platform.
Many startups have raised billions before going public, such as Uber and Magic Leap. Current companies that have not exited yet include Lyft and Airbnb, valued at several billion dollars each. These are the kinds of pre-IPO companies that The Elephant targets.
Creating a tech unicorn security token
The Elephant Platform moves into a unique niche that weds the crypto world to the pre-IPO secondary market. Its PrivatEquity Coin (PEC) simplifies the buying process by allowing the buyer to own an asset through a security coin. Adding a blockchain token model to secondary markets will help users to more easily trade assets and enhance liquidity. The mutual benefits of new opportunities, liquidity, and portfolio diversification appeal to crypto investors and private equity investors alike.
The four primary components of The Elephant’s security token are sufficient liquidity, a functioning investment platform, the dedicated token economy, and an attractive portfolio of investments. The Elephant’s PEC and Dedicated Tokens promise to bridge the gap between the crypto and secondary investment markets. Their tokens are backed by financial assets from shares in private companies and are defined as securities––meaning they follow the rules and regulations of the issuance and marketing of securities for investment funds.
The Elephant’s current shares include several private high-tech companies that are pre-IPO and worldwide. A few of these target companies include Circle, PagerDuty, and BlaBlaCar.
The private secondary market’s transaction volume has expanded 800% over the last 13 years. A few key reasons for this staggering growth include the lengthening of the transition from venture-backed companies to IPO––3-5 years to 10-12 years––and a very high IRR.
Regarding the need filled by The Elephant project, Co-CEO Chaim Schiff said, “While the secondary market does provide a limited solution for the liquidity needs of the original shareholder, the buyers of these shares step into the shoes of the selling shareholder and now are the ones suffering from limited liquidity going forward. The Elephant Platform aims to provide the “next generation” solution for the liquidity challenge for buyers, by combining the growing pre-IPO secondary market with the blockchain technology and related digital currencies.”
Launching the Elephant
The Elephant plans to launch an Accredited Investor Recruitment Program, to encourage potential Qualified Investors. Once investors successfully complete their registration, they will receive PECs as an incentive.
Selling shares of a private pre-IPO company present certain challenges. In order to complete a transaction, a shareholder needs to find a buyer, negotiate a price, execute legal agreements, and process the transaction with the company. All necessary steps, however, are guided and supported by The Elephant.
The Elephant platform has been endorsed by Red Herring, the online tech site, as well as respected sources Yahoo! Finance and Forbes. Israeli site Globes published an endorsement emphasizing the importance of The Elephant’s data-driven format: “The platform will also allow for accredited investors to invest in better companies which align better with their portfolio, with the help of up-to-date data, insights, and expert opinions.” The Elephant promises “tokens tied to real-world financial assets,” and is partners with related tech companies Zirra and Bancor.