What is the Elephant Platform?
The Elephant is the first tokenized secondary market platform that provides a way for accredited investors to buy tokens that are backed by shares of private companies.
It tokenizes equity rights and manages the selling of these equity tokens directly from founders, employees and former employees of the pre-IPO companies that want to liquidate their assets.
Also, once investors buy tokenized equity rights, they can be traded on the platform through security tokens.
Real-World Problem & Solution Proposed
Currently, if some investors want to buy a share of a private company, it would take him a lot of time because of regulatory paperwork, and in many cases, those investors hire a third party to help them in this process.
However, these third parties charge high fees for their services which makes the whole process extremely expensive and inconvenient.
Also, there are a lot of assets that have a problem with liquidity which prevents investors from acquiring these assets in a short period of time.
Elephant platform will make dedicated limited partnerships which will buy the shares from company shareholders and allow investors to indirectly acquire these shares by buying participation units in these dedicated limited partnerships.
In order to achieve greater liquidity for buyers, these participation units will be able to be tokenized creating equity-backed security tokens, so-called Dedicated Tokens. With smart contracts, these tokens become a liquid asset that will be able to be traded at the platform.
Qualified investors will buy Private Equity Tokens (PET) that will give them rights to participate in Dedicating Token Offering, a special types of offering in which investors can buy Dedicated tokens.
By tokenizing company’s equity rights Elephant will connect traditional secondary market with crypto holders which will directly improve the liquidity of these assets.
Features & Partnerships
The Elephants Features:
- Target Company – is a late stage or pre-IPO company that meets the criteria for listing and whose shares are listed on the Platform by their shareholders.
- Dedicated LP – is a Dedicated Vehicle incorporated in the form of a limited partnership, managed by the General Partner (GP), that purchase and holds the shares of the Target companies. Investors participating in a dedicating token offering of a Dedicated LP will hold LPPU in the Dedicated LP.
- GP – is a company which manages the Dedicated LPs in accordance with the partnership agreement.
- Dedicating Offering Escrow Account – is a combination of a digital wallet and bank account into which the funds committed by investors who are participating in DTO will be directed and will be managed by a reputable accounting firm in accordance with a Dedicated Offering Escrow Agreement. Copy of this agreement will be available for download and review on the platform.
- Dedicated Tokens – it represents the legal ties to equity (shares) in Target Companies through the Dedicated Vehicle. Each Dedicated Vehicle issues its own Dedicated Token during its DTO. Dedicated tokens have acquired by investors who invest in DTO. These tokens can’t be taken from a platform until they register on a regulated exchange.
- Dedicating Token Offering – Investors who hold PEC tokens will have right to be the first who participates in the purchase of Dedicated Tokens which represent equity rights in Target Companies, through Dedicated Vehicle. DTO is going to be managed by a platform operator.
- Dedicated Vehicle – Is a special purpose vehicle which will be incorporated by the Elephant for the purpose of purchasing and holding the shares of the Targeted Companies with respect to which a Dedicated Token Offering shall take place.
- Private Equity Coins (PEC) – are tokens issued by Elephant in an STO and sold to accredited investors. Holders of these security tokens will be able to participate in Dedicated Token Offerings and buy dedicated tokens which represent the equity rights (shares) of Targeted Companies. Also, PEC holders will receive 20% of platforms revenues.
- Platform Operator – is a company that manages, develops and maintains the platform.
- Platform – is an online platform and a major tool that connects accredited investors with shareholders allowing investors to invest in dedicated tokens. It has operated by a GP with the help of supporting entities.
- Security token exchange – they aim to establish an exchange where will be possible to list the PEC token and the Dedicated tokens.
The Elephant Partnerships:
- On 5/3/2017 – Elephants partnered with research company Zirra to help investors in making better investment decisions.
- On 5/23/2018 – Elephant announced integration with Bancor protocol to provide access to continuous liquidity to PEC token holders.
- On 9/12/2018 – Elephant made a partnership with ShareX. The idea of the partnership is to allow investors from the West access to Asian pre-IPO unicorn shares. On the other side, Asian Investors will be able to invest in companies from the West.
- On 11/16/2018 – Blocktrade.com partners with The Elephant to list its asset-backed tokens and increase the liquidity
Elephant team consists of 7 members, between them we have:
- Schiff Chaim is the co-founder and Co-CEO of the Elephant. He holds a Master of Business Administration – MBA from Bar-Ilan University.
- Sigalit Cohen is the co-founder and Co-CEO of the Elephant. Sigalit is a CEO at PrivatEquity.biz, a secondary market platform that connects investors and private stockholders. She holds a Bachelor of Arts, Political Science, and Government at Bar-Ilan Universtiy.
- Ido Ungar is a COO at Elephant. He holds a Bachelor degree in Philosophy at Tel Aviv University.
For more information about the team and advisory board check Here.
Community & News
- New ways to invest in pre-IPO markets
- Blockchain and security tokens
- Eastmore Group joined Elephants STO
You can find news and updates on their official blog Here
The community around it:
- Telegram – 209 members
- Facebook – 608 followers
- Twitter – 478 followers
Token Sale Info
- Private sale start date: 15th November 2018
- Private sale end date: 28th February 2019
- Ticker: PEC
- Total supply: 150,000,000
- Price per token in private sale: $0.33 USD
- Hard cap: $40 Mil. USD
- Token type: Security Token
- Use of the token: Token holders gets 20% of platforms annual revenues and the right to be first to participate in Dedicated Token Offerings.
- 26% – token sale
- 15% – team and seed investors, these tokens will be vested over a 24-months.
- 15% – to partners, advisors, and incentives to promote the token sale and platform.
- 5% to accredited investors that complete their verification and registration process with the platform.
- 39% – held by the Company for future development of the platform.
Uses of funds from the token sale:
- 8% – technological development of the platform
- 15% – Marketing and business development
- 17% – General and administration
- 40% – Participation in Dedicated Token Offerings
- 15% – TGE Expenses
- 5% – Legal, Accounting, and Analysis
The Elephant is the first company that made a tokenized secondary market platform. There are not a lot of competitors, but a lot of big companies are throwing an eye on this idea and in the future, there will certainly be more competitors.
Besides The Elephant these two companies come out with their solutions:
- Sharepost is an online platform that connects venture-backed private companies, investors and shareholders providing liquidity for trading with pre-IPO shares.
- Morgan Creek Blockchain Capital is also trying to tokenize privately and publicly traded shares to eliminate regulatory paperwork and expensive third parties.
The Elephant has an innovative idea to provide liquidity of the pre-IPO companies allowing investors to trade with equity right tokens before IPO.
Elephant platform is already live, and it has more than 2000 registered accredited investors, and more than 20 pre-IPO registered Companies. Value of the PEC depends on the number of pre-IPO registered companies, so we will see if Elephant achieve to make more dedicated partnerships.
Currently, Elephant platform is only limited to accredited investors with a minimum investment of $20k. This high entry barrier has been made because of the current regulation which basically doesn’t make any difference between trading with securities and trading with security tokens.
However, in the future governments will probably make a new, universal legal framework for trading with security tokens, and if this happens Elephant platform will be opened to smaller investors.
My personal opinion is that Elephant project has a very good and innovative idea, but it has to hire more people and improve presence in social media.