Atomic Capital has officially released an open source digital security readiness checklist to facilitate compliant and successful digital security issuances. The company also unveiled their transparency and reporting tool, providing businesses with a means to clearly demonstrate their Key Performance Indicators to potential investors.
Atomic Capital’s Digital Security Readiness Tool Explained
The team at Atomic Capital has had a busy year so far. The company formed in July 2018, announced a successful digital equity sale which raised $3.4 million in October and released their own security token standard, the Digital Security Standard (DSS), in November.
With such rapid growth, they’ve noticed that security token issuers aren’t always aware of the requirements that come with a Security Token Offering (STO). Many tasks in areas such as business development, the technical realm, and legal obligations are confusing, difficult, or simply unknown by those who wish to issue security tokens.
To combat this, Atomic Capital has just released a new tool to help issuers with the current complications seen in issuance: an open source digital security readiness checklist.
Comprised of three different phases— which have 2-3 sections including business, compliance, and fundraising— the checklist aims to show issuers precisely what they need to do in a compliant and effective manner.
The following is a breakdown of the different phases.
Phase 1: Business and Team Review
- Business Info: 7 tasks to include fundraising, auditing, investor base up to the current point, along with tranche strategy and team biographies.
- Compliance: 48 tasks which draft a rough but thorough outline of the necessary regulatory compliance.
Phase 2: Issuance, Technical, and Compliance Readiness
- Business Info: 3 tasks that cover a description of the security and its dividend structure.
- Compliance: 7 tasks that entail the specific offering type and jurisdiction, pitch deck, prospectus, financials, KYC / AML procedures, etc.
- Fundraising: a total of 36 tasks which provide specific details on the security to be traded.
Phase 3: Fundraising Strategy
- Business Info: 16 tasks including use of funds, marketing, communications strategy, a timeline of the offering, and additional plans regarding the fundraising operation.
- Fundraising: 3 tasks to include a signed preliminary ATS agreement, investor target information, and inclusion/exclusions, along with liquidation preference.
Atomic Capital and the Impending Surge of the Security Token Industry
Many look to the highly anticipated future of security tokens with confidence. Others remain cautiously optimistic, suggesting the industry should shift focus from security token standards to other areas such as on-chain compliance, liquidity, and information disclosure.
Regardless of one’s orientation, one thing is certain: the implementation of security tokens has arrived. From luxury property, to REITs, to equity and beyond, real-world assets are beginning to experience the advantages of tokenization.
Tools such as Atomic Capital’s Digital Security Readiness Checklist will only propel the industry forward, helping both companies and investors reach benefits which have otherwise been out of reach.
In fact, along with the recent checklist, Atomic Capital has announced the development of a transparency and reporting tool which will provide investors with clearer information concerning potential investments.
Businesses will be able to use the tool to demonstrate their business growth, clients, revenues, and other Key Performance Indicators to minimize any imbalance when it comes to information disclosure.
Notably, the SEC has no such requirements when it comes to the fundraising of private companies. Yet Atomic Capital has set their own bar, taking an innovative initiative in making the new security token industry even more accessible to those who wish to enter the space.
What do you think of Atomic Capital’s Readiness Checklist? Will these sorts of tools be adopted by other security token enterprises, bringing the industry to a higher level? Let us know what you think in the comments below.
Image courtesy of Atomic Capital.