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How crypto companies can go public in 2021, explained

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What is Bitcoin? How does blockchain work? How to mine cryptocurrency? We are glad to help you answer these questions with our quick guides in Explained section.

n”,”seo_description”:”What is Bitcoin? How does blockchain work? How to mine cryptocurrency? We are glad to help you answer these questions with our quick guides in Explained section.”},”words_count”:718,”description”:” There is huge demand for crypto companies to go public right now — but in this day and age, are initial public offerings their only option?rn “,”author”:{“id”:1163,”title”:”Connor Sephton”,”url”:”connor-sephton”,”twitter”:””,”google_plus”:””,”photo”:”https://s3.cointelegraph.com/storage/uploads/view/79c1dcc461b3e79f358eaf8c5daef1a8.jpg”,”gender”:”male”,”description”:”Connor Sephton is the head of advertorial for Cointelegraph. He is a journalist based in London who began his career at Metro before joining Sky News.”,”facebook”:””,”email”:”sponsored@cointelegraph.com”,”linkedin”:””,”created_at”:”2020-12-04 14:09:47″,”updated_at”:”2020-12-16 21:05:11″,”deleted_at”:null,”avatar”:”https://images.cointelegraph.com/images/150_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS9zdG9yYWdlL3VwbG9hZHMvdmlldy83OWMxZGNjNDYxYjNlNzlmMzU4ZWFmOGM1ZGFlZjFhOC5qcGc=.jpg”,”hash”:”aHR0cHM6Ly9jb2ludGVsZWdyYXBoLmNvbS9hdXRob3JzL2Nvbm5vci1zZXBodG9u”,”relativeUrl”:”https://cointelegraph.com/authors/connor-sephton”,”user_id”:1163,”language_id”:1,”name”:”Connor Sephton”,”desc”:”Connor Sephton is the head of advertorial for Cointelegraph. 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Initial public offerings used to be the most common method for businesses that wanted to make a stock market debut — but things are changing.

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Of course, IPOs remain hugely popular. According to PwC, there were 727 IPOs around the world in the first quarter of 2021 — bringing in proceedings of $202.9 billion. That’s 60% of the funds that were raised across the whole of 2020… in just a three-month period.

nn

There are downsides to pursuing an IPO. Not only are these offerings incredibly expensive for the companies that pursue them, but lock-up periods mean executives and early investors who already have shares cannot sell them for up to 180 days.

nn

This has prompted the likes of Coinbase to seek alternatives such as a direct listing — a method that has become favored by a number of tech brands including Spotify and Slack.

nn

Other potential routes include big brands merging with a special-purpose acquisition company, known as a SPAC for short. This has been the approach taken by the crypto-friendly trading platform eToro as it gears up for a $10 billion listing.

nn

Reg A token sales, which results in securities being publicly traded, can also be considered.

nnnnnnnnnnnn”,”created_at”:”2021-05-12 17:57:33″,”updated_at”:”2021-05-12 20:51:04″,”sort”:1,”translations”:{“id”:2434,”explained_post_id”:2441,”title_en”:”What are the main ways crypto companies can go public in 2021?”,”content_en”:”

Initial public offerings used to be the most common method for businesses that wanted to make a stock market debut — but things are changing.

nn

Of course, IPOs remain hugely popular. According to PwC, there were 727 IPOs around the world in the first quarter of 2021 — bringing in proceedings of $202.9 billion. That’s 60% of the funds that were raised across the whole of 2020… in just a three-month period.

nn

There are downsides to pursuing an IPO. Not only are these offerings incredibly expensive for the companies that pursue them, but lock-up periods mean executives and early investors who already have shares cannot sell them for up to 180 days.

nn

This has prompted the likes of Coinbase to seek alternatives such as a direct listing — a method that has become favored by a number of tech brands including Spotify and Slack.

nn

Other potential routes include big brands merging with a special-purpose acquisition company, known as a SPAC for short. This has been the approach taken by the crypto-friendly trading platform eToro as it gears up for a $10 billion listing.

nn

Reg A token sales, which results in securities being publicly traded, can also be considered.

nnnnnnnnnnnn”,”title_es”:””,”content_es”:”nnnnnnnnnn”,”title_cn”:””,”content_cn”:”nnnnnnnnnn”,”title_de”:””,”content_de”:”nnnnnnnnnn”,”title_it”:””,”content_it”:”nnnnnnnnnn”,”title_ar”:””,”content_ar”:”nnnnnnnnnn”,”title_br”:”Como as empresas de criptomoedas podem abrir o capital em 2021?”,”content_br”:”

As ofertas públicas iniciais costumavam ser o método mais comum para empresas que queriam fazer uma estreia no mercado de ações – mas as coisas estão mudando.

nn

Obviamente, os IPOs continuam extremamente populares. De acordo com a PwC, ocorreram 727 IPOs em todo o mundo no primeiro trimestre de 2021 – movimentando US$ 202,9 bilhões. Esse número representa 60% dos fundos que foram levantados ao longo de todo o ano de 2020 … em apenas um período de três meses.

nn

Mas existem desvantagens em buscar um IPO. Essas ofertas não são apenas incrivelmente caras para as empresas que as buscam, mas os períodos de indisponibilidade significam que os executivos e os primeiros investidores que já possuem ações não podem vendê-las por até 180 dias.

nn

Isso levou empresas como a Coinbase a buscar alternativas, como uma listagem direta – um método que se tornou preferido por uma série de marcas de tecnologia, incluindo Spotify e Slack.

nn

Outras rotas potenciais incluem a fusão de grandes marcas com uma empresa de aquisição de propósito específico, conhecida como SPAC. Esta tem sido a abordagem adotada pela plataforma de negociação amigável as criptomoedas, a eToro ao se preparar para uma listagem de US$ 10 bilhões.

nn

 

nnnnnnnnn”,”title_jp”:””,”content_jp”:”nnnnnnnnnn”,”created_at”:”2021-05-12 17:57:33″,”updated_at”:”2021-05-12 20:51:04″,”title_kr”:””,”content_kr”:”nnnnnnnnnn”,”title_tr”:””,”content_tr”:”nnnnnnnnnn”}},{“id”:2442,”post_id”:65857,”title”:”What are the pros and cons of each?”,”content”:”

Each method can attract downsides, meaning companies need to think about their top priorities.

nn

While IPOs typically generate box-office proceeds, in part due to how they have the credibility of an underwriting bank, the regulatory requirements that companies need to meet is often high. Investment banks are required to underwrite and participate in the IPO, and this can result in a hefty tab at the end of the drawn-out procedure.

nn

As you’d imagine, all of this has led to direct listings becoming a popular alternative. No new shares are created as part of this process. Instead, existing stock is sold to the public — and no lock-up restrictions are in place. This prevents existing shareholders from being diluted, but funds only end up being raised when current stock is sold.

nn

SPACs can be faster and cheaper — enabling companies to hit the stock market faster. Although this creates greater levels of certainty for shareholders and potentially less volatility than an IPO, retail investors can be put at risk because of how a SPAC’s sponsors take on significant equity at low cost.

nn

And then there are Reg A token sales. Because traditional financial entities do not need to be involved, this enables everyday investors to gain exposure at earlier stages within a company. But this isn’t without legal costs — and an upper cap of $75 million exists when it comes to new funds being raised.

nnnnnnnnnnnn”,”created_at”:”2021-05-12 17:58:20″,”updated_at”:”2021-05-12 20:51:04″,”sort”:2,”translations”:{“id”:2435,”explained_post_id”:2442,”title_en”:”What are the pros and cons of each?”,”content_en”:”

Each method can attract downsides, meaning companies need to think about their top priorities.

nn

While IPOs typically generate box-office proceeds, in part due to how they have the credibility of an underwriting bank, the regulatory requirements that companies need to meet is often high. Investment banks are required to underwrite and participate in the IPO, and this can result in a hefty tab at the end of the drawn-out procedure.

nn

As you’d imagine, all of this has led to direct listings becoming a popular alternative. No new shares are created as part of this process. Instead, existing stock is sold to the public — and no lock-up restrictions are in place. This prevents existing shareholders from being diluted, but funds only end up being raised when current stock is sold.

nn

SPACs can be faster and cheaper — enabling companies to hit the stock market faster. Although this creates greater levels of certainty for shareholders and potentially less volatility than an IPO, retail investors can be put at risk because of how a SPAC’s sponsors take on significant equity at low cost.

nn

And then there are Reg A token sales. Because traditional financial entities do not need to be involved, this enables everyday investors to gain exposure at earlier stages within a company. But this isn’t without legal costs — and an upper cap of $75 million exists when it comes to new funds being raised.

nnnnnnnnnnnn”,”title_es”:””,”content_es”:”nnnnnnnnnn”,”title_cn”:””,”content_cn”:”nnnnnnnnnn”,”title_de”:””,”content_de”:”nnnnnnnnnn”,”title_it”:””,”content_it”:”nnnnnnnnnn”,”title_ar”:””,”content_ar”:”nnnnnnnnnn”,”title_br”:”Pós e Contras das opções para abrir capital “,”content_br”:”

Cada método pode atrair desvantagens, o que significa que as empresas precisam pensar sobre suas principais prioridades.

nn

Embora os IPOs normalmente gerem grandes receitas, em parte devido à forma como eles têm a credibilidade de um banco, os requisitos regulatórios que as empresas precisam atender são muito elevados. Os bancos de investimento são obrigados a subscrever e participar do IPO, e isso pode resultar em uma conta pesada ao final do procedimento prolongado.

nn

Como você pode imaginar, tudo isso fez com que as listagens diretas venham se tornado uma alternativa popular. Nenhum novo compartilhamento é criado como parte desse processo. Em vez disso, o estoque existente é vendido ao público – e não há restrições de lock-up. Isso evita que os acionistas existentes sejam diluídos e os recursos só acabam sendo levantados quando o estoque atual é vendido.

nn

Os SPACs podem ser mais rápidos e baratos – permitindo que as empresas entrem no mercado de ações com mais rapidez. Embora isso crie maiores níveis de certeza para os acionistas e potencialmente menos volatilidade do que um IPO, os investidores de varejo podem ser colocados em risco por causa de como os patrocinadores de um SPAC assumem um patrimônio significativo a baixo custo.

nn

E depois há as vendas de tokens Reg A. Como as entidades financeiras tradicionais não precisam estar envolvidas, isso permite que os investidores comuns ganhem exposição em estágios iniciais dentro de uma empresa. Mas isso não acontece sem custos legais – e existe um limite máximo de US$ 75 milhões quando se trata de novos fundos sendo levantados.

nnnnnnnnn”,”title_jp”:””,”content_jp”:”nnnnnnnnnn”,”created_at”:”2021-05-12 17:58:20″,”updated_at”:”2021-05-12 20:51:04″,”title_kr”:””,”content_kr”:”nnnnnnnnnn”,”title_tr”:””,”content_tr”:”nnnnnnnnnn”}},{“id”:2443,”post_id”:65857,”title”:”Is there any appetite among investors for publicly listed crypto companies?”,”content”:”

Yes — especially now Coinbase has broken new ground by joining the Nasdaq.

nn

It’s fair to say that a number of rival exchanges were watching Coinbase’s journey with great interest. As we mentioned, eToro is now following suit — and Kraken may be preparing to go public next year. Binance, the world’s biggest exchange, appears to be holding firm in its determination to remain a private company.

nn

Tech companies going public have been a major area of focus in the equity markets, especially over the past two years or so, and this is evidenced by the strong performance of the tech-heavy Nasdaq. When it comes to crypto companies specifically, investors may be drawn to purchasing shares because of how it gives them indirect exposure to fluctuations in the crypto markets.

nn

Growing interest in the potential that cryptocurrencies have — as a payment method, as a store of value and as a compelling alternative to fiat — have also led some analysts to expect substantial growth in the years to come. Already, Mastercard has announced that it will enable its customers to pay with digital assets if they wish, and PayPal’s crypto service is being gradually rolled out around the world. This forms part of an argument that investing in publicly listed exchanges now could be like getting on the ground floor of major tech giants such as Facebook, Amazon and Google.

nnnnnnnnnnn”,”created_at”:”2021-05-12 17:59:49″,”updated_at”:”2021-05-12 20:51:04″,”sort”:3,”translations”:{“id”:2436,”explained_post_id”:2443,”title_en”:”Is there any appetite among investors for publicly listed crypto companies?”,”content_en”:”

Yes — especially now Coinbase has broken new ground by joining the Nasdaq.

nn

It’s fair to say that a number of rival exchanges were watching Coinbase’s journey with great interest. As we mentioned, eToro is now following suit — and Kraken may be preparing to go public next year. Binance, the world’s biggest exchange, appears to be holding firm in its determination to remain a private company.

nn

Tech companies going public have been a major area of focus in the equity markets, especially over the past two years or so, and this is evidenced by the strong performance of the tech-heavy Nasdaq. When it comes to crypto companies specifically, investors may be drawn to purchasing shares because of how it gives them indirect exposure to fluctuations in the crypto markets.

nn

Growing interest in the potential that cryptocurrencies have — as a payment method, as a store of value and as a compelling alternative to fiat — have also led some analysts to expect substantial growth in the years to come. Already, Mastercard has announced that it will enable its customers to pay with digital assets if they wish, and PayPal’s crypto service is being gradually rolled out around the world. This forms part of an argument that investing in publicly listed exchanges now could be like getting on the ground floor of major tech giants such as Facebook, Amazon and Google.

nnnnnnnnnnn”,”title_es”:””,”content_es”:”nnnnnnnnn”,”title_cn”:””,”content_cn”:”nnnnnnnnn”,”title_de”:””,”content_de”:”nnnnnnnnn”,”title_it”:””,”content_it”:”nnnnnnnnn”,”title_ar”:””,”content_ar”:”nnnnnnnnn”,”title_br”:”Qual o potência da abertura de capital pelas empresas de criptomoedas? “,”content_br”:”

Grande- especialmente agora que a Coinbase abriu novos caminhos ao ingressar na Nasdaq.

nn

É justo dizer que várias bolsas rivais estavam observando a jornada da Coinbase com grande interesse. Como mencionamos, o eToro agora está seguindo o exemplo – e Kraken pode estar se preparando para abrir o capital no próximo ano. Binance, a maior exchange do mundo, parece estar se segurando firme em sua determinação de permanecer uma empresa privada.

nn

As empresas de tecnologia que abrem o capital têm sido uma grande área de foco nos mercados de ações, especialmente nos últimos dois anos ou mais, e isso é evidenciado pelo forte desempenho da Nasdaq, que trabalha com alta tecnologia. Quando se trata de empresas de criptomoedas especificamente, os investidores podem ser atraídos para a compra de ações por causa de como isso lhes dá exposição indireta às flutuações nos mercados cripto. 

nn

O crescente interesse no potencial que as criptomoedas têm – como método de pagamento, reserva de valor e como alternativa atraente ao fiat – também levou alguns analistas a esperar um crescimento substancial nos próximos anos. A Mastercard já anunciou que permitirá que seus clientes paguem com ativos digitais se desejarem, e o serviço de criptomoedas do PayPal está sendo gradualmente implementado em todo o mundo. Isso faz parte do argumento de que investir em bolsas listadas publicamente agora pode ser como chegar ao piso térreo de grandes gigantes da tecnologia, como Facebook, Amazon e Google.

nnnnnnnnn”,”title_jp”:””,”content_jp”:”nnnnnnnnn”,”created_at”:”2021-05-12 17:59:49″,”updated_at”:”2021-05-12 20:51:04″,”title_kr”:””,”content_kr”:”nnnnnnnnn”,”title_tr”:””,”content_tr”:”nnnnnnnnn”}},{“id”:2444,”post_id”:65857,”title”:”What are the risks that crypto companies face?”,”content”:”

As the pros and cons column above suggests, the road to going public isn’t an easy one.

nn

SPACs can end up going wrong if a company that wishes to go public ends up picking the wrong sponsor. Meanwhile, businesses that go through the rigmarole of completing an IPO can end up finding that they’re not ready to hit the primetime — and are unaccustomed to the burdens associated with being a public company, including the quarterly disclosure of earnings.

nn

Direct listings can leave early investors in companies disgruntled, because they may be expected to offload some of their shares so they can enter into public circulation. And although the absence of a lock-up period is certainly enticing, executives can end up being criticized if they sell shares immediately after a listing takes place. (Coinbase insiders were accused of dumping tokens after its listing, but one of the exchange’s representatives told Coinbase at the time that all sellers maintained strong ownership positions.)

nn

A challenge with Reg A token sales lies in how only a few have been approved to date, and success in this area can depend on picking the right lawyers.

nnnnnnnnnnnn”,”created_at”:”2021-05-12 18:00:39″,”updated_at”:”2021-05-12 20:51:04″,”sort”:4,”translations”:{“id”:2437,”explained_post_id”:2444,”title_en”:”What are the risks that crypto companies face?”,”content_en”:”

As the pros and cons column above suggests, the road to going public isn’t an easy one.

nn

SPACs can end up going wrong if a company that wishes to go public ends up picking the wrong sponsor. Meanwhile, businesses that go through the rigmarole of completing an IPO can end up finding that they’re not ready to hit the primetime — and are unaccustomed to the burdens associated with being a public company, including the quarterly disclosure of earnings.

nn

Direct listings can leave early investors in companies disgruntled, because they may be expected to offload some of their shares so they can enter into public circulation. And although the absence of a lock-up period is certainly enticing, executives can end up being criticized if they sell shares immediately after a listing takes place. (Coinbase insiders were accused of dumping tokens after its listing, but one of the exchange’s representatives told Coinbase at the time that all sellers maintained strong ownership positions.)

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A challenge with Reg A token sales lies in how only a few have been approved to date, and success in this area can depend on picking the right lawyers.

nnnnnnnnnnnn”,”title_es”:””,”content_es”:”nnnnnnnnnn”,”title_cn”:””,”content_cn”:”nnnnnnnnnn”,”title_de”:””,”content_de”:”nnnnnnnnnn”,”title_it”:””,”content_it”:”nnnnnnnnnn”,”title_ar”:””,”content_ar”:”nnnnnnnnnn”,”title_br”:”Qual o risco que as empresas cripto enfrentam ao abrir capital?”,”content_br”:”

Como sugere a sessão de prós e contras acima, o caminho para ir a público não é fácil.

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Os SPACs podem dar errado se uma empresa que deseja abrir o capital escolher o patrocinador errado. Enquanto isso, as empresas que passam pelos complexos processos para concluir um IPO podem acabar descobrindo que não estão prontas para atingir o horário nobre – e não estão acostumadas com os encargos associados a ser uma empresa pública, incluindo a divulgação trimestral de lucros.

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As listagens diretas podem deixar os primeiros investidores em empresas insatisfeitos, porque pode-se esperar que eles descarreguem algumas de suas ações para que possam entrar em circulação pública. E embora a ausência de um período de restrição seja certamente atraente, os executivos podem acabar sendo criticados se venderem as ações imediatamente após a listagem. (Insiders da Coinbase foram acusados ​​de despejar tokens após sua listagem, mas um dos representantes da exchange disse que todos os vendedores mantinham fortes posições.)

nn

Um desafio com as vendas de token Reg A está em como apenas alguns foram aprovados até o momento, e o sucesso nesta área pode depender da escolha dos advogados certos.

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nnnnnnnn”,”title_jp”:””,”content_jp”:”nnnnnnnnnn”,”created_at”:”2021-05-12 18:00:39″,”updated_at”:”2021-05-12 20:51:04″,”title_kr”:””,”content_kr”:”nnnnnnnnnn”,”title_tr”:””,”content_tr”:”nnnnnnnnnn”}},{“id”:2445,”post_id”:65857,”title”:”Beyond Coinbase, are there any other examples?”,”content”:”

One company that has been in the process of completing a Reg A token sale is Exodus.

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Exodus — which offers desktop, mobile and hardware crypto wallets — said that it wanted to pursue this approach to ensure that its users had equal access to equity as venture capital firms and crypto whales.

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The company’s stock was listed at a price of $27.42 a share, and was available directly through the Exodus wallet in exchange for Bitcoin, Ether or the USDC stablecoin. It was also available exclusively in the U.S., barring three states.

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In a recent ask-me-anything session on Cointelegraph’s YouTube page, Exodus CEO JP Richardson described the Reg A token sale as a “proof of concept to show the world that this is possible” — and suggested that other companies could be invited to perform their own token sales within its platform in the future.

nn

“We see that as an inevitable future in that all traditional assets, whether it’s stocks, bonds, mortgages, currencies… now will make their way to the blockchain,” Richardson added.

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Approved by the U.S. Securities and Exchange Commission, Exodus raised $59 million in just five days.

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On May 5, it was confirmed that the token sale had sold out — with Exodus claiming it was the first company to have a public offering that was for crypto only, digitally represented on the blockchain, and 100% in a self-custodial platform.

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Learn more about Exodus

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Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

n

nnnnnnnnnnnn”,”created_at”:”2021-05-12 18:01:27″,”updated_at”:”2021-05-12 20:51:04″,”sort”:5,”translations”:{“id”:2438,”explained_post_id”:2445,”title_en”:”Beyond Coinbase, are there any other examples?”,”content_en”:”

One company that has been in the process of completing a Reg A token sale is Exodus.

nn

Exodus — which offers desktop, mobile and hardware crypto wallets — said that it wanted to pursue this approach to ensure that its users had equal access to equity as venture capital firms and crypto whales.

nn

The company’s stock was listed at a price of $27.42 a share, and was available directly through the Exodus wallet in exchange for Bitcoin, Ether or the USDC stablecoin. It was also available exclusively in the U.S., barring three states.

nn

In a recent ask-me-anything session on Cointelegraph’s YouTube page, Exodus CEO JP Richardson described the Reg A token sale as a “proof of concept to show the world that this is possible” — and suggested that other companies could be invited to perform their own token sales within its platform in the future.

nn

“We see that as an inevitable future in that all traditional assets, whether it’s stocks, bonds, mortgages, currencies… now will make their way to the blockchain,” Richardson added.

nn

Approved by the U.S. Securities and Exchange Commission, Exodus raised $59 million in just five days.

nn

On May 5, it was confirmed that the token sale had sold out — with Exodus claiming it was the first company to have a public offering that was for crypto only, digitally represented on the blockchain, and 100% in a self-custodial platform.

nn

Learn more about Exodus

nn

n

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

n

nnnnnnnnnnnn”,”title_es”:””,”content_es”:”nnnnnnnnnn”,”title_cn”:””,”content_cn”:”nnnnnnnnnn”,”title_de”:””,”content_de”:”nnnnnnnnnn”,”title_it”:””,”content_it”:”nnnnnnnnnn”,”title_ar”:””,”content_ar”:”nnnnnnnnnn”,”title_br”:”Além da Coinbase, há outros exemplos?”,”content_br”:”

Uma empresa que está em processo de conclusão de uma venda de token Reg A é a Exodus.

nn

A Exodus – que oferece carteiras cripto para desktops, dispositivos móveis e hardware – e disse que deseja seguir essa abordagem para garantir que seus usuários tenham acesso igual ao patrimônio de empresas de capital de risco e criptomoedas.

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As ações da empresa estavam listadas a um preço de US$ 27,42 por ação e estavam disponíveis diretamente na carteira Exodus em troca de Bitcoin, Ether ou stablecoin USDC. Também estava disponível exclusivamente nos EUA, exceto em três estados.

nn

Em uma recente sessão pergunte-me-qualquer coisa na página da Cointelegraph no YouTube, o CEO da Exodus, JP Richardson, descreveu a venda de token Reg A como uma “prova de conceito para mostrar ao mundo que isso é possível” – e sugeriu que outras empresas poderiam ser convidadas a se apresentar suas próprias vendas de tokens dentro de sua plataforma no futuro.

nn

“Vemos isso como um futuro inevitável em que todos os ativos tradicionais, sejam ações, títulos, hipotecas, moedas … agora irão para o blockchain”, acrescentou Richardson.

nn

Aprovada pela Comissão de Valores Mobiliários dos Estados Unidos, a Exodus arrecadou US$ 59 milhões em apenas cinco dias.

nn

Em 5 de maio, foi confirmado que a venda de tokens havia sido feito – com a Exodus alegando ser a primeira empresa a ter uma oferta pública de criptomoedas representada apenas digitalmente no blockchain e 100% em uma plataforma de auto-custódia. 

nn

Saiba mais sobre a Exodus

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n

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

n

nnnnnnnn”,”title_jp”:””,”content_jp”:”nnnnnnnnnn”,”created_at”:”2021-05-12 18:01:27″,”updated_at”:”2021-05-12 20:51:04″,”title_kr”:””,”content_kr”:”nnnnnnnnnn”,”title_tr”:””,”content_tr”:”nnnnnnnnnn”}}],”is_partner_material”:true,”commentsSection”:{“schemaEntityUrl”:”//cointelegraph.com/explained/how-crypto-companies-can-go-public-in-2021-explained”,”list”:[],”amount”:0,”i18n”:{“addComment”:”Add a comment…”,”amountOnePostfix”:”Comment”,”amountPostfix”:”Comments”,”cancel”:”Cancel”,”delete”:”Delete”,”edit”:”Edit”,”errorBig”:”Comment text cannot be longer than 2000 characters”,”errorDuplicate”:”Duplicate comment”,”errorSmall”:”Comment text must be at least 2 characters long”,”hideButton”:”Hide comments”,”noComments”:” “,”commentOnModeration”:”Comment on moderation”,”postComment”:”Post”,”reply”:”Reply”,”showAllComments”:”Show All Comments”,”showButtonPostfix”:”comments”,”showButtonPrefix”:”Show”,”signIn”:”Sign in”,”update”:”Update comment”,”commentWasDeleted”:”This comment has been 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price drops to near $61K shortly after COIN lists on Nasdaq”,”lead”:”A volatility-filled listing for Coinbase’s COIN stock coincided with a 5% drop in the price of Bitcoin.”,”leadfull”:””,”category_id”:89,”category_url”:”https://cointelegraph.com/category/market-analysis”,”category_title”:”Market Analysis”,”author_url”:”https://cointelegraph.com/authors/jordan-finneseth”,”author_hash”:”aHR0cHM6Ly9jb2ludGVsZWdyYXBoLmNvbS9hdXRob3JzL2pvcmRhbi1maW5uZXNldGg=”,”author_title”:”Jordan Finneseth”,”author_img”:”https://images.cointelegraph.com/images/32_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS9zdG9yYWdlL3VwbG9hZHMvdmlldy8xYjUxM2M1ZTc0Y2NlNTFmMWMxOGM1OTYzNWVjNDExMS5qcGc=.jpg”,”date”:”APR 14, 2021″,”flash_date”:”APR 14, 2021″,”sponsored”:false,”press_release”:false,”sponsored_label”:”Sponsored”,”explained”:false,”badge”:{“title”:”Market Update”,”label”:”default”},”published”:{“date”:”2021-04-14 20:54:38.000000″,”timezone_type”:3,”timezone”:”Europe/London”},”stat_uniqs”:25107,”rss_date”:”Wed, 14 Apr 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Initial public offerings used to be the most common method for businesses that wanted to make a stock market debut — but things are changing.

Of course, IPOs remain hugely popular. According to PwC, there were 727 IPOs around the world in the first quarter of 2021 — bringing in proceedings of $202.9 billion. That’s 60% of the funds that were raised across the whole of 2020… in just a three-month period.

There are downsides to pursuing an IPO. Not only are these offerings incredibly expensive for the companies that pursue them, but lock-up periods mean executives and early investors who already have shares cannot sell them for up to 180 days.

This has prompted the likes of Coinbase to seek alternatives such as a direct listing — a method that has become favored by a number of tech brands including Spotify and Slack.

Other potential routes include big brands merging with a special-purpose acquisition company, known as a SPAC for short. This has been the approach taken by the crypto-friendly trading platform eToro as it gears up for a $10 billion listing.

Reg A token sales, which results in securities being publicly traded, can also be considered.

Each method can attract downsides, meaning companies need to think about their top priorities.

While IPOs typically generate box-office proceeds, in part due to how they have the credibility of an underwriting bank, the regulatory requirements that companies need to meet is often high. Investment banks are required to underwrite and participate in the IPO, and this can result in a hefty tab at the end of the drawn-out procedure.

As you’d imagine, all of this has led to direct listings becoming a popular alternative. No new shares are created as part of this process. Instead, existing stock is sold to the public — and no lock-up restrictions are in place. This prevents existing shareholders from being diluted, but funds only end up being raised when current stock is sold.

SPACs can be faster and cheaper — enabling companies to hit the stock market faster. Although this creates greater levels of certainty for shareholders and potentially less volatility than an IPO, retail investors can be put at risk because of how a SPAC’s sponsors take on significant equity at low cost.

And then there are Reg A token sales. Because traditional financial entities do not need to be involved, this enables everyday investors to gain exposure at earlier stages within a company. But this isn’t without legal costs — and an upper cap of $75 million exists when it comes to new funds being raised.

Yes — especially now Coinbase has broken new ground by joining the Nasdaq.

It’s fair to say that a number of rival exchanges were watching Coinbase’s journey with great interest. As we mentioned, eToro is now following suit — and Kraken may be preparing to go public next year. Binance, the world’s biggest exchange, appears to be holding firm in its determination to remain a private company.

Tech companies going public have been a major area of focus in the equity markets, especially over the past two years or so, and this is evidenced by the strong performance of the tech-heavy Nasdaq. When it comes to crypto companies specifically, investors may be drawn to purchasing shares because of how it gives them indirect exposure to fluctuations in the crypto markets.

Growing interest in the potential that cryptocurrencies have — as a payment method, as a store of value and as a compelling alternative to fiat — have also led some analysts to expect substantial growth in the years to come. Already, Mastercard has announced that it will enable its customers to pay with digital assets if they wish, and PayPal’s crypto service is being gradually rolled out around the world. This forms part of an argument that investing in publicly listed exchanges now could be like getting on the ground floor of major tech giants such as Facebook, Amazon and Google.

As the pros and cons column above suggests, the road to going public isn’t an easy one.

SPACs can end up going wrong if a company that wishes to go public ends up picking the wrong sponsor. Meanwhile, businesses that go through the rigmarole of completing an IPO can end up finding that they’re not ready to hit the primetime — and are unaccustomed to the burdens associated with being a public company, including the quarterly disclosure of earnings.

Direct listings can leave early investors in companies disgruntled, because they may be expected to offload some of their shares so they can enter into public circulation. And although the absence of a lock-up period is certainly enticing, executives can end up being criticized if they sell shares immediately after a listing takes place. (Coinbase insiders were accused of dumping tokens after its listing, but one of the exchange’s representatives told Coinbase at the time that all sellers maintained strong ownership positions.)

A challenge with Reg A token sales lies in how only a few have been approved to date, and success in this area can depend on picking the right lawyers.

One company that has been in the process of completing a Reg A token sale is Exodus.

Exodus — which offers desktop, mobile and hardware crypto wallets — said that it wanted to pursue this approach to ensure that its users had equal access to equity as venture capital firms and crypto whales.

The company’s stock was listed at a price of $27.42 a share, and was available directly through the Exodus wallet in exchange for Bitcoin, Ether or the USDC stablecoin. It was also available exclusively in the U.S., barring three states.

In a recent ask-me-anything session on Cointelegraph’s YouTube page, Exodus CEO JP Richardson described the Reg A token sale as a “proof of concept to show the world that this is possible” — and suggested that other companies could be invited to perform their own token sales within its platform in the future.

“We see that as an inevitable future in that all traditional assets, whether it’s stocks, bonds, mortgages, currencies… now will make their way to the blockchain,” Richardson added.

Approved by the U.S. Securities and Exchange Commission, Exodus raised $59 million in just five days.

On May 5, it was confirmed that the token sale had sold out — with Exodus claiming it was the first company to have a public offering that was for crypto only, digitally represented on the blockchain, and 100% in a self-custodial platform.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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