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

Private Equity Legal & Compliance Digest

July 2017
Reprinted with permission.

Investors use Initial Coin Offering (ICO) “coins” in the hopes that successful projects will elevate their value, and according to Joshua Ashley Klayman in the Private Equity Legal & Compliance Digest article “Practical Ways Private Equity Managers Can Implement and Take Advantage of Blockchain Technology,” keener attention has been paid to them due to the amount of capital they’re raising.

“In addition to inquiries from startups and established companies, we’ve been getting a lot of inquiries from PE and VC funds. One interesting development is that the funds are asking questions about, and contemplating, both helping to structure ICOs for some of the companies in which those funds have investments, as well as potentially structuring funds with an ICO model (where the fund itself would have an ICO). Some funds specifically ask about replicating or emulating aspects of the recent Blockchain Capital ICO structure,” she said.

Funds are also trying to create a fund via an ICO rather than raising capital in the traditional way, Klayman noted. “If you look at the way that Blockchain Capital (with Argon Group) approached its ICO model in Singapore, they made an effort to comply with existing securities regimes of various jurisdictions—for instance, there was an offering memorandum, and, with respect to U.S. securities laws, they availed themselves of Reg D and Reg S to raise capital.”

Read part one of the article.

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