Wesley Hollingsworth • May 12, 2020
In this issue, we will be taking a closer look at Tritaurian Capital.
In this edition of the Protocol Newsletter, we spoke with Bill Heyn, Chief Executive Officer at Tritaurian Capital, Incorporated, about doing digital private placements and why digital securities issuers might need the services of a Broker-Dealer.
1. Who is Tritaurian Capital (Tritaurian) and what do you do?
Tritaurian is a boutique investment bank that’s been around for over 20 years and focuses on specialty financings including private placements using distributed ledger technology.
2. What is Tritaurian known for?
Tritaurian is known for tackling unusual and special situations financings and using creative approaches to find fundraising solutions. Tritaurian has focused on bringing institutional grade solutions and experience to small and middle market companies.
3. How does Tritaurian interact with digital securities?
After years of constructive dialogue and work with the regulators, Tritaurian is the first Broker-Dealer in the United States to obtain a license to carry out private placements using distributed ledger technology.
4. Why would an issuer of digital securities choose Tritaurian over a competitor?
Firstly, if an issuer wants to actually be able to compliantly execute a digital securities offering in the United States, they have limited options as Broker-Dealers need a specific license to issue digital securities. In addition to its license, Tritaurian has a depth of experience in the traditional securities realm. Tritaurian's principles are all entrepreneurs whom have built, fundraised and run business ourselves, so we know the business side firsthand.
5. Why is it important to have a license to do digital private placements as opposed to a regular Broker-Dealer license?
Even if the underlying security being offered is the same, if it is tokenized and on the blockchain it has many nuances that differ from how you handle a traditional security and offering. FINRA and the SEC have repeatedly made it clear that they consider digital assets to be a separate line of business from traditional private placements, one that is not covered under the basic private placements license.
6. Why do you think that digital securities are the future of capital markets?
In addition to the well-discussed potential for digital securities to bring access to the private markets to more and more investors, digital securities are also perfect for enhancing and reinforcing the applications of securities laws. Smart contracts solve a lot of current bottlenecks and areas for both human and process errors. Issuing digital securities and building in smart contracts allows for efficient and cost-saving execution.
7. Which types of assets are best to work with based on your investor base?
Tritaurian can work with any sort of asset, we tend to look for ones that have a concrete business, or at least a very well-developed plan. It is also helpful when the offering will have real relevance to being on the blockchain, but not necessary.
8. There are different kinds of deals that Broker-Dealers offer (performance, retainer, etc.) - what is the best deal for issuers of digital securities?
Tritaurian takes most of its compensation in the form of a success fee at the conclusion of the offering. Tritaurian does require a modest engagement fee or a monthly retainer for its work but is happy to work with clients to make sure that it is an amount they are comfortable with.
9. For Broker-Dealers, how do they decide what kind of agreement that they will offer the issuer?
Tritaurian is happy to offer the choice of a one-time engagement fee or a monthly retainer, depending on the needs of the client and their cash flow position. We work with our clients very closely and make sure to find the right solution for everyone.
10. Why would an issuer of digital securities need the services of a Broker-Dealer, and when should they engage a Broker-Dealer in the process?
Companies that are looking to raise capital are good at their business, we are good at raising capital; raising capital can be challenging, having experts help is good, sound business practice. If the issuer wants a third party to represent them to the public, that company needs to be a registered Broker-Dealer. Clients should engage Tritaurian whenever they feel the time is right. We gladly offer services from start to finish of the tokenization process. At the very latest, a Broker-Dealer should be involved before any investor outreach occurs. If an issuer is not sure if they may or may not need the assistance of a Broker-Dealer, we are always happy to explore with them and find the correct solution.
About Tritaurian Capital
Tritaurian Capital is a FINRA registered investment bank providing specialized private placement financing and mergers and acquisitions advisory. By capitalizing on the background of its principals in investment banking and entrepreneurial company growth, Tritaurian examines every angle and opportunity for its clients in order to provide the highest quality financial advice and service. Tritaurian specializes in innovative transactions based on sound financial counsel across a wide range of financing products, including blockchain and digital security solutions.
To learn more, please visit their website.
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.
Digital Marketing Manager @ securitize.io