The Protocol Newsletter | Industry Spotlight: issuance

Araby Patch • Sep 10, 2019

Blockchain | The Protocol Newsletter | Digital Securities Industry
Securitize the protocol industry spotlight issuance v301

In this issue, we will be taking a closer look issuance, an investor marketing firm from Los Angeles that specializes in digital securities.

Issuance helps digital securities issuers raise capital by marketing their offerings to likely investors, both online and offline.

We spoke with Darren Marble, the CEO & Co-Founder of issuance about his experience marketing and fundraising for digital securities offerings. Darren has been working in the digital securities industry from its inception two (very long) years ago.

1. Please describe Issuance and its purpose in the digital securities ecosystem.

Issuance is an investor marketing firm with offices in Los Angeles and New York. We help digital securities issuers raise capital by marketing their offerings to likely investors, both online and offline, so they can get back to building their businesses.

2. Why have you chosen to focus your business in the digital securities market?

Our team believes that digital securities are the next mega-trend in capital markets. While some have been dismayed with the time it is taking for the industry to mature, we are confident that early pioneers with viable infrastructure solutions and staying power will be handsomely rewarded. We’re about two years in, and it’s *just now* beginning to get exciting!

3. Can you name and describe any successful digital securities projects you have worked on recently?

We were honored to a part of the tZERO marketing campaign, which was one of the industry’s first successful digital securities offerings (DSOs) in 2018.

Currently, we are working with imbrex, a blockchain infrastructure play for the real estate market, which is having early success with some of the larger digital asset investors in the market. imbrex has a working prototype that aims to change the way buyers purchase property, how agents transact, and how large brokerages are managed. One of the founders exited his last company, which was VC-backed.

4. You’ve said before that investors are the most sought-after segment of the market. What do you think is most important to an investor when investing in a company or project?

Investors are evaluating DSOs in the same manner they would evaluate any other deal: what is the track record of the founders, what traction does the company have, are they solving an unaddressed problem in a large target market, and (last but not least) are the terms compelling?

Any DSO issuer that can positively and confidently answer these questions is likely to attract investor interest.

5. How do you market a digital security to an investor compared to a paper security?

Issuance has strong relationships with most of the leading digital asset funds in the US. Many of these funds will take calls or meetings with our clients simply based on the trust we’ve cultivated with them. At this point, we know what types of deals they’re seeking, whether they lead or follow, what stage they like to invest in, at what terms, how much they invest, and so on.

Admittedly, digital asset funds that have previously invested in other DSOs are usually better targets for most issuers. While it’s critically important for our industry to educate new investors about the value proposition for digital securities, pitching investors who already know the market would be considered the path of least resistance.

All of our clients are using the Reg D 506(c), Reg A+, Reg CF, or Reg S securities exemptions. The common denominator in all of these exemptions is that issuer has the ability to generally solicit or market their offering. Assuming an offering is strong, it comes down to marketing with the right message, to the right investor, through the right channel. It’s easier said than done.

6. What’s your perspective on investor appetite for digital securities? What would improve their appetite?

I think the appetite for digital securities is lukewarm and getting warmer. With new high caliber issuers and investment funds entering the space almost every month, they bring with them a new crop of eager investors.

One common investor objection in the past few months has been the lack of liquidity for digital securities in secondary markets, which to be fair, are in their infancy. Over time, as these alternative trading systems (ATSs) begin partnering with other brokers and exchanges, daily volume of their listed digital securities will increase. Rome wasn’t built in a day, and it should be expected that liquidity in this new market will take time to develop.

7. When consulting with companies who are issuing digital securities, what is the most common aspect that they can improve in their offering and/or marketing?

Most DSO issuers oversell the fact that they are raising through a DSO, which is a mistake. Instead, a better approach is for the issuer to sell their team, traction, and tech (for example). The DSO is simply a mechanism for investment. The other common mistake is for issuers to send prospective investors too much information upfront. Keep your pitch simple, tease the investor, and make them ask for more!

8. Given your perspective in the digital securities industry, do you believe that all securities will be digital in the future? If so, how far in the future?

Absolutely. The writing isn’t just on the wall—it's written in code ; )

About issuance

Issuance is an investor marketing firm with offices in Los Angeles and New York. We help digital securities issuers raise capital by marketing their offerings to likely investors, both online and offline, so they can get back to building their businesses.

To learn more, please visit https://issuance.com/

About Securitize:

Securitize delivers trusted global solutions for creating compliant digital securities. The Securitize compliance platform and protocol provide a proven, full-stack solution for issuing and managing digital securities (security tokens). Securitize’s innovative DS Protocol has the highest adoption rate in the industry and enables seamless, fully compliant trading across multiple markets simultaneously. Multiple Securitize powered digital securities are already trading globally on public marketplaces with many more in the pipeline.

To learn more, please visit our website.

This Issuer Spotlight was featured in V.3 Issue 06 of The Protocol Newsletter, an inside examination of the accomplishments within the digital securities industry. The Protocol Newsletter features issuers, issuance platforms, marketplaces, broker-dealers, custodians, marketers, and more, with a specific interest in their real-life stories about what it takes to issue and manage digital securities on public and permission-based blockchains.

Our goal is to provide the digital securities industry with invaluable insights and to serve as a resource for those looking to issue digital securities in the future.

Araby Patch

Araby Patch is the Director of Marketing for Securitize