Fintelum sprung out of an idea to separate investors seeking yield and those seeking to take over companies they invest in. The only way a company should be traded is by an amicable agreement with all parties involved, privately or on a public secondary market. This can be achieved by ensuring simple and fair terms of the shareholder agreement, multiple class shareholding and transparent business management. Fintelum was born out of our experience in capital-raising and out of know-how in carrying out a technically sound and legal fundraise. Several companies were enquiring how to crowdfund with us, and we decided to become the place, where investors meet good companies.
We decided effectively to compete with the likes of NASDAQ’s First North, by simplifying the investment terms and democratising access to transferable securities for everyone, not only Europeans, but for willing investors across the globe. The way we do it is by allowing everyone to invest using the best global currencies there are — cryptocurrencies, such as bitcoin and ether in euro-denominated securities in a law abiding European jurisdiction.
It is important to note that Fintelum’s business relies on the European Crowdfunding Service Provider Regulation (ECSP), which was adopted at the end of 2020, and the Prospectus Regulation exemptions. This means, Fintelum services are limited in up to EUR 5 million, for public securities offering, but has no limits for private securities fundraises, where only professional investors are eligible to invest. There are no limits on utility token sales, however.
Could you please give us a rundown of the most important things about Fintelum?
Fintelum is an equity crowdfunding platform, accepting euro and crypto such as bitcoin and ether as investable currencies. Fintelum offers tokenization services, which simply means that the underlying security is digitally represented on the Ethereum Blockchain in a form of a smart contract. By means of tokenizing, we open up to an eventual future, where all securities will live and trade, change owners via blockchain transactions. As a company, we have developed our own implementation and are ready to embrace this inevitable future. See more on the STO implementation whitepaper.
So going forth into 2021 and beyond, how will Fintelum make an impact in the crypto space, or on the world?
Fintelum services start at sourcing the project, planning out the corporate structure, issuance documentation, token mechanics (in the case of a utility token), and marketing. Fintelum aims to maintain ongoing corporate relations with each project by listing them on the secondary marketplace, where investors can exchange ownership amongst each-other. If the project owners decide, Fintelum performs a bulletin-board type of securities listing against cryptocurrencies. In other words, using crypto not only to invest in the real economy but also trade securities with a direct listing in cryptocurrencies. This would be something unique and yet another small step in bringing cryptocurrencies closer to the physical economy and mainstream usage.
Why should projects choose to use your platform for crowdfunding? And how has previously crowdfunding campaigns preformed?
Choosing to crowdfund with Fintelum just as any other platform does not equate with a successful fundraise. Each project is different and calls for a different kind of crowd investor. It is also true that each need to ensure a fundraising base, where existing members and investors contribute towards making the project a success.
Security token space is a nascent industry, where there have been few public issuances to date. Most have been private sales, where a token may be redundant. However, Fintelum will provide the technical base for either case, if such is a business requirement.
Choosing Fintelum for crowdfunding, projects will benefit from a global investor base, allocating funds in cryptocurrencies as well as euro fiat, while ensuring legality and orderly fundraise from the KYC/AML perspective. Collecting funds is only one of the first steps in operating a successful business for projects. It is important to ensure that the project is able to use the collected funds legally and enable investors with continuous communication with project owners, including payout of dividends, regular reporting and optional secondary market.
You are currently doing an STO for a project called KEEPP, why did they choose to use your platform for their STO?
One of the main reasons why projects consider crowdfunding is difficulty accessing financing such as bank loans. Another reason is unwillingness to give up management control. Banks often have little to no resources to evaluate feasibility of projects and demand disproportionate personal guarantees for credit approval. Crowdfunding with Fintelum on the other hand is demanding in terms of attractive yield, and separates financial investor and management control. The KEEPP STO was able to project an elevated 15%+ dividend yield per annum and was adamant to retain control of the company, issuing 50% shares to external investors. Their reasoning was also willingness to dive into this new capital markets opportunity, testing the space, seeking demand in the open market. In our view, KEEPP’s dividend yield is a welcome change to a yield starved investment environment. It does not however mean that all projects choosing Fintelum will have such a high dividend. In rare cases, with largely unmet demand can such a yield be attained. Typically, we estimate 10% annual yield to be generous.
Now, could you tell us about Fintelum’s accomplishments so far, please tell us what you are most proud of.
Fintelum has found solutions to investing in securities using cryptocurrencies legally and compliantly. It has long been an issue how to do it properly for the industry that was accustomed to unbridled ICO exuberance. Although we are in full support of ICOs and now more recently NFTs (non fungible tokens), these cannot be compared to security investments that are protected by existing securities laws. Our accomplishments sum up in our understanding of the nascent industry, exhibited in our Security Token Implementation and the appropriate web platform, serving the crowdfunding projects and investors alike.
We took part in modifying the local Latvian securities law, allowing SMEs to express public offering without broker involvement and with simplified offering document. Coincidentally, a year later the US also upped the crowdfunding regulation (Reg CF) maximum capitalisation from USD 1 m to USD 5 m. And finally, in Europe a long-awaited harmonising crowdfunding regulation came into existence, increasing the capitalisation limits even further. We at Fintelum are proud to have contributed to this process through a European body for crowdfunding institutions ECN, at the same time raising awareness about crypto-asset-based funding mechanisms and the crowdfunding industry at large. Overall, our input has been in the development of the infrastructure both technically and legally. Now is the prime time to test the grounds and make STO projects a reality.
Tell us about your team. Who’re the people behind the screens?
As a team, we go back to 2008, when we developed trading strategies for two investment funds spanning the globe from the USA to China mainland. The core team has since built several projects, including an institutional-grade cryptocurrency exchange. The Fintelum venture has been in existence since 2018. Today, we have launched the new KEEPP project with the hope to show the world how security token issuance should be done right. More on our team members can be found here.
Now, give us a quick rundown of the future of Fintelum. For example, what new things are you seeking to bring to life and what will it mean for the overall project?
The brand name Fintelum was chosen to represent a financial tool in a new capital markets industry, where cryptocurrencies as a means of investment and asset management play a significant role. We seek to promote borderless access to financial instruments, financial independence and responsibility. We hope to be able to continuously discern good projects from the not-so good and offer only the best-we-can-find to our global investor-base; supply continuous transparency about each project; and maintain open communication channels between investors and projects. Our aim is to make investing in small-capital projects through crowdfunding a thing. Because in many countries it still is not. We aim to bring down the unnecessary complexity in legal terminology and uniform access to service application on the web.
Which partnerships have Fintelum engaged so far, and which ones are the most impactful?
Fintelum partners with a number of service providers and organisations, such as the European Crowdfunding Network (ECN), Coinfirm, iDenfy, Latvian Chamber of Commerce (LTRK), Business Network International (BNI), etc. All of our partnerships revolve around providing the best service to our clients and raise awareness about our industry.
If people would like to follow you on your social media pages, visit your website or read your important documents like your white paper, what are the links they need to visit? Please list them below.
Thank you so much for your time! Do you have anything to add before we finish?
Did we mention the new KEEPP project is estimating 15% plus in annual dividend? And you can invest in their shares in fiat or crypto, whereas the security is planned to be represented on the Ethereum blockchain.
Disclaimer: This article is not intended to be a source of investment, financial, technical, tax, or legal advice. All of this content is for informational purposes only. Readers should do their own research. The Capital is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by reliance on any information mentioned in this article.
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