Araby Patch • Aug 2, 2019
This Issuer Spotlight was featured in V.3 Issue 05 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.
In this issue, we will be taking a closer look at the issuer, Curzio Equity Owners.
The Curzio Equity Owners digital securities offering (ticker: CEO) is the first digital security that offers an equity stake in the high-margin investment newsletter industry. CEO was also recently announced as the 10th live digital security running on the Securitize platform and DS Protocol.
We spoke with Frank Curzio, the CEO & Founder of Curzio Research about his experiences creating and closing a successful digital securities offering using the Securitize platform.
1. Describe Curzio Research and it’s current place in the market compared to any competitors.
Curzio Research is a financial newsletter publisher. Started in 2016, the company is still in its infancy. In this industry, your business is based on your list of readers and your ability to convert them to paid subscribers and retain them. Compared to our competitors, our list is small, but our conversion and retention rates are high. We generated more than $6 million in revenue from our small list in the first 24 months of business… But that’s a drop in the bucket compared to several of our largest competitors, who generated over $2 billion in sales during the same timeframe. It all comes down to list size.. and ours is growing quickly.
2. Describe how you came to the decision to tokenize CEO, specifically the advantages you saw as deciding factors.
The security token market has created a faster, more cost-effective avenue for any company to sell a portion of an asset to investors using the speed and security of blockchain.
By eliminating intermediaries (investment banks), smart contracts cut down costs of service delivery. This makes security token offerings a faster, much cheaper alternative than the traditional private placement route.
And the liquidity event takes place much sooner with an STO than traditional methods of raising money.
With a traditional private placement, investors’ money can be locked up for a considerable amount of time. It takes five years for the average venture-backed company to be acquired… and over eight years to go public (IPO). But STO participants can convert their tokens to cash after a 12 month lock-up period. That’s a big benefit to investors.
3.The CEO token went on sale right about the same time OpenFinance and SharesPost came online with actual trades - how closely were you watching the secondary market for digital securities? Was it important that OFN and SP had success right out of the gate?
Very closely. And very important. After all - none of this works without having a secondary market where investors have enough liquidity to trade.
4. Would you consider yourself and CEO as pioneers of something greater?
Absolutely. Security tokens are bound to be quickly adopted once investors realize that asset-backed, regulated tokens offer more liquidity, less administration, and boundless opportunities. We definitely wanted to be early-adopters.
5. Describe any resistance you experienced when creating and launching the CEO offering? How did you navigate?
Being that this is an entirely new asset-class, there was a steep learning curve to launch a security token. But my business IS research… it’s what I’ve done all my life and I pride myself on my network. So I just started contacting anyone I could learn from and eventually aligned with market leaders - like Securitize.
6. What have you learned from this first iteration of working with digital securities? Would you do it again?
Now that our capital raise was a success… numerous people have contacted me to launch their own security tokens. Several of these businesses generate tens of millions in annual sales. Not only do I want to help these companies come to market… but I plan on investing in several of these offerings.
7. From a digital securities perspective, what does success look like for the CEO token?
Acceptance by a leading exchange like tZero or OpenFinance.
8. What specifically needs to happen to grow the digital securities industry in your opinion? How relevant is the industry’s growth for Curzio Research?
In order for digital securities to become more mainstream, regulators have to figure out secondary trading, the infrastructure needs to be more user-friendly, and there needs to be more education. Blockchain... cryptos... digital securities… they are complex concepts that the masses will have to understand better before they’ll be widely adopted.
Curzio Research will continue to share research and educate our readers to help them understand and navigate this new landscape. If you’re interested in receiving free weekly updates, just visit: https://www.curzioequityowners.com/token-tracker/
Token Ticker: CEO
Blockchain Address: https://etherscan.io/token/0x27785351924ABfF1895Cbfd6622b93692E5D7537
Token Details (what it represents): The CEO digital security gives investors an equity stake in Curzio Research and the first-ever opportunity to invest in the high-margin investment newsletter industry.
Offering Type: Reg D and Reg S
About Curzio Research
Curzio Research is an independent financial newsletter publisher dedicated to providing deep-dive market analysis, unique stock ideas, and the tools individual investors need to consistently generate market-beating returns.
To learn more, visit Curzio Research.
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.
Araby Patch is the Director of Marketing for Securitize