The world’s first space security token was announced on 29 October 2018 at the Zurich Crypto Summit, by SpaceFund Inc., a Texas-based venture capital firm focused on using new blockchain technology to fund ‘frontier enabling’ space startups.
“SpaceFund’s goal is to support the development and profitability of amazing new space startups around the world,” said Rick Tumlinson, founding partner of SpaceFund, co-founder of several leading space initiatives, and space industry thought leader. “With Jeff Bezos, Elon Musk, and others investing billions into a space economic infrastructure, a revolution is underway in space. We want to allow more visionary people to get involved, to support the entrepreneurs opening space to humanity, and to share in the wealth it will create. This offering is both a giant leap and a first step in that direction.”
SpaceFund features an insider perspective on the NewSpace industry, with a pragmatic blend of technologists, investment experts, and business leaders across both the space and blockchain communities. The company’s management team also includes general partners who run successful investment portfolios with dozens of companies under management, the founder of the world’s longest running space business plan competition, and leaders of the tokenization revolution.
“This is a match made to open the heavens,” said David A. Johnston, general partner of SpaceFund, CEO of Yeoman’s Capital, and blockchain business pioneer. “Yeoman’s has started over 30 companies in the blockchain space, and we are applying that knowledge and network to SpaceFund. Together we are going to change the way people invest in space.”
Security tokens are simply a digitized form of asset ownership, utilizing the reliability of the immutable shared ledger system, or blockchain, that is currently revolutionizing the world of finance. Essentially ‘digital stock,’ security tokens are a new form of digital financial technology replacing paper share certificates and providing significant benefits in how assets are held, traded, and audited. Security tokens also have built-in compliance, preventing unauthorized trades before they ever happen.
Ten years after the white paper that started bitcoin, there is a revolution underway to open the world of finance to a much wider number of people. There is also a revolution underway to open the Solar System to all the people of Earth. While larger companies such as SpaceX and Blue Origin are well capitalized, the startups that will both open the frontier and develop products in space to change lives down here, still need investment. However, space has historically been an inaccessible asset class for most investors. Through fund tokenization, a wide pool of investors will finally have an opportunity to gain exposure to exciting startups in the space industry, even while they are still privately held. SpaceFund has coupled this new financial technology with a traditional venture capital structure that mitigates risk through both diversifying investor interests across dozens of companies and providing the expertise to choose the most high-growth and high-value projects.
“Tokenizing a space-focused venture capital fund removes major barriers for investors, providing them with liquidity and diversified exposure to exciting startups, while also providing those startups with the long-term support they need to succeed,” said Meagan Crawford, managing partner of SpaceFund, co-founder of the NewSpace Business Plan Competition, and former space industry executive. “This is the missing piece to solve the NewSpace financing puzzle – connecting the world’s capital with those who will lead us to new worlds.”
To begin, the SpaceFund security token is available to accredited U.S. investors, working within American Securities and Exchange Commission (SEC) guidelines. Then, as acceptable international legal frameworks are developed, SpaceFund security tokens will expand to include and allow investors from around the world. To enable this, SpaceFund is partnering with the industry leading, Swiss-based Smart Valor to develop international expansion strategies that will enable investors to participate in the fund in the most efficient and scalable way.
“A diverse set of regulatory frameworks for tokenization are rapidly developing in various jurisdictions around the world, while investor acquisition costs are growing quickly. Smart Valor has the platform and knowledge to efficiently reach a broad base of international investors in full compliance with these regulations,” said Olga Feldmeier, CEO of Smart Valor who will join SpaceFund’s advisory board. “Our partnership will ensure that, once the time has come, SpaceFund will follow the fastest path to secure investments from abroad.”
To ensure compliance and manage transactions, SpaceFund has partnered with Abacus to handle the issuance and ongoing administration of its security token.
“Tokens do three things for space; soften liquidity issues, simplify transactions, and create regulatory transparency,” said Pradyuman Vig, CEO of Abacus. “Abacus has the technology and team to make the tokenization process smooth, seamless, and safe for all involved. Together, the SpaceFund team is well suited to run the first space venture fund that tokenizes on the blockchain.”
SpaceFund is a venture capital firm, created to bridge the two most important revolutions of this generation – NewSpace and Digital Finance. Utilizing a new model of investing, SpaceFund is working to bring NewSpace to the people. Founded and run by leaders in the space and blockchain communities, SpaceFund is following a step-by-step plan designed to be both revolutionary in its results and conservative in its approach. Combining the liquidity and smart contract simplicity of security tokens with deep knowledge and insider access to the space industry, SpaceFund will improve investor returns and greatly increase the number and types of investors that will profit from humanity’s reach to the stars.
Founded by David Johnston, Yeoman’s Capital is the world’s first family office that invests 100% of its assets into decentralized, tokenized projects. Yeoman’s portfolio companies and partners undergird the infrastructure of new economies. Yeoman’s Capital is guided by a core belief that decentralized, open innovation will change the future of asset ownership, services, and cooperation.
Swiss-based Smart Valor is the world’s first marketplace for tokenized alternative assets and security tokens. Hosted by the Thompson Reuters Incubator and Listed as one of the Top 10 Fintech Startups 2018 by Forbes, the company is fully compliant with Swiss regulations and offers a full range of services and features to efficiently connect investors with token issuers, at scale and around the world.
Abacus is a YC and Coinbase backed issuance and administration platform for compliant tokenized securities. In addition to handling investor onboarding and the primary distribution of security tokens, the platform has the most comprehensive administration platform to manage securities after the initial offering. This includes processing dividend payouts, generating compliance reports, and sending investor updates.