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Practical Ways Private Equity Managers Can Implement and Take Advantage of Blockchain Technology (Part Two of Two)

Private Equity Legal & Compliance Digest

July 2017
Reprinted with permission.

In part two of the Private Equity Legal & Compliance Digest article “Practical Ways Private Equity Managers Can Implement and Take Advantage of Blockchain Technology (Part Two of Two),” Joshua Ashley Klayman addresses the difficulty potential investors may have when trying to fully understand the possible drawbacks to investing in ICOs and blockchain technology.

“I think one issue goes back to the idea of how well the people who are evaluating the investments understand the technology and the limits of the technology that is being proposed. I think there often may be a lack of full understanding of the underlying technology and when it can really add value, and that could be among the biggest issues. For instance, with respect to blockchain technology generally, when assessing business models and proposed use cases, it is helpful to ask, ‘Is blockchain technology really needed for the proposed use case? Can that technology add significant value, or would a spreadsheet or database work just as well?’”

Ms. Klayman also explains the diligence that is necessary for investing in portfolio companies versus investing in the ICO context; the need to review all relevant laws in the jurisdictions where offerings are being launched, where relevant entities are being organized, and where investors are being solicited; and the best practices for managers considering an ICO.

Read the full article.



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