Project rundown interview with ProspectusApp
By: The Capital
Tags: Cryptocurrency, Ethereum, Blockchain, Crypto, Startup

Project rundown interview with ProspectusApp

Hi guys, can you provide a demonstration of your product and service? What is ProspectusApp?

ProspectusApp is a web application which enables companies raising capital to prepare their compliant investment documents. It’s meant for companies who are going to do a public offering in the European Union, and our target clientele are the STO companies. We’ve got guidelines and we’ve added ready texts which the company can use and modify in order to prepare their own documents. It definitely won’t substitute a law firm, as there are plenty of things that need to be reviewed by the lawyer, but you can get your document structure drafted without external help. This means cost-savings which in some parts of Europe could mean tens of thousands of euros.

Can you tell us more about the founding of the company and what the problem that you are addressing is?

The whole idea of the blockchain and security token offerings is to make the capital raise easier and more cost-effective. Yet, as it’s a regulated market, you still have to follow all the laws and regulations in place, regardless of the fact that blockchain enables to automate different parts of the offering. As we’ve been consulting clients on various token offerings, we know that the legal part of the public offering is a big issue. It’s not only the costs, but it’s also very time consuming as the speed of the process heavily depends on the regulators (i.e whether they register your prospectus or not, and how quickly they’ll do it). The actual simplification can only come from changing the laws, which unfortunately takes ages. In current regulatory environment, we have to use the tools that we have, and ProspectusApp is something that can help entrepreneurs now.

Where do you guys see problems/possibilities with raising capital in Europe?

I think there are many problems and therefore opportunities in Europe. The market is obviously fragmented, as there are a lot of different countries and languages. So marketing is an issue, although the types of people who’d potentially invest in startups or to security token offerings probably speak English. Trust is an issue, as it’s not always easy for a Swedish investor to do a proper due diligence on a Polish company. This is where different investment platforms come into play, as if the platform has a good reputation on looking out for the investors and doing proper DD on its clients, the issue of trust can be minimised. Uniting investors from different European countries is a big opportunity, as there is plenty of money in Europe which is not being used to fuel the growth of the companies. The differences in funding numbers between Europe, US and Asia are quite staggering, and unfortunately Europe is lagging way behind. I think the issues that cause this difference run deeper in the culture and society (i.e how failure is seen, how entrepreneurs are valued, how success is cherised, etc), at least to some extent. It probably starts with the education system, but this would require a deeper level of analysis.

And of course, the biggest problems are some of the laws which can be labeled as historical legacy. The regulation clearly hasn’t caught up with the technology, and that’s something that policy makers would have to change. To make these changes, the politicians first have to understand the technology, and this might as well mean waiting for the new generaton of policy makers to emerge and take over. It’s not only Europe though, the US is even more difficult when it comes to public offerings, for example.

As for the opportunities, there will be big winners in this industry, no doubt about that. Companies working on solutions to simplfiy raising capital and to provide new and better investment opportunities for investors will play huge part in improving the EU fundraising scene.

What is the current state of the tokenization of assets in the market? In your opinion what needs to be changed?

Tokenisation of assets is in its infancy. We need market participants — compliant tokenisation platforms, security token exchanges, and investors. A functional security token market. I would refer to my previous answer — we need regulatory changes, as blockchain can remove the middlemen and regulatory functions which until now have been necessary.

Who is the company’s ideal customer?

Ideal clients are companies planning to raise between 5m — 20m euros from the public in the European Union. Also startups, of course, as the price of the app is very low and why not do a proper investment documents which you’re presenting to investors.

So, the ProspectusApp helps to reduce the legal fees of preparing a compliant prospectus document. Every company who raising capital needs to draft a quality investment document for the investors. Can you tell us how one can apply and what are payment options?

You can pay via BTC or Paypal. It’s pretty standard. Everybody can buy an access.

And how much do you charge?

We charge 199€ during the beta mode. It’s literally nothing compared to your costs — you’ll probably pay more for the first consultation with the lawyer. And once the lawyer prepares instructions the way we’ve done it, you’ve spent 10 000€.

What are the top priorities for the company right now?

To keep developing our app ecosystem. ProspectusApp is only part of the equation. We’re building similar niche apps as we speak, and we will have a great value proposition for companies that work with us.

Who are your partners and who would you like to partner with in the future?

As we’re currently in beta mode, we’re partnering only with Comistar’s advisory office, which is basically the same company, because the ProspectusApp was launched by Comistar’s legal team. Once we get enough users and it makes sense, we start to add law firms to our marketplace. Then clients can choose with who they want to work with for their legal needs. They can choose any law firm now as well, we don’t set any restrictions on this, but it’s just not doable on the ProspectusApp platform at this moment.

Thinking about the future, do you have any roadmap with relevant updates? What are the company’s main objectives in the next year?

We’d like to open a couple more Comistar offices around the globe, and we’d like to bring 2 more apps to the market — one at the end of 2019, and the second in 2020. Although we’ve always been in the services business, we’re now more and more shifting towards tech solutions that will help to automate, manage and simplify business processes for SMEs.