Indiegogo was a revolutionary force in fundraising. They are now helping an Aspen-based luxury hotel to raise $ 18 million through a symbolic sale. Unlike many of the ICOs that have been launched in the last year, the new token will be supported with equity in a physical business. Although it is not the first time that tokens have been issued with the support of a tangible asset, a new trend could start both in token sales and in the securitization of real estate.
The idea of selling the shares of a real estate business through a REIT is a consolidated way for investors to access a small interest in real estate. Most often REITs are sold through the main stock exchanges, such as the NYSE. Now it seems that enterprising companies are drawing on the still hot IPO market to attract capital.
Indiegogo says that they will not directly sell any STOs (Security Token Offerings). Instead they will act as a researcher and "veteran" any symbolic offering they promote. The current token offer for the St. Regis Aspen is ultimately offered by Elevated Returns, which bought the hotel in 2010. Indiegogo will receive a 5% commission from any token they sell, which could make this deal worth $ 900,000 for
Indiegogo is probably on Something
One STO is not like most cryptocurrencies. The overwhelming majority of criptos are similar to legal currency, as they have no intrinsic value. This is not suggesting that they are useless, only most of the cryptos are based on faith to have value. The STOs are in a different class altogether. Anyone buying a token from Aspen Digital will actually own an equity in the St. Regis Aspen, which may or may not be a good investment.
Read: How Blockchain is Beginning to Destroy and Transform the Real Estate Market
That the St. Regis Aspen is a continuing commercial success is a rethink in the emerging STO market. There have not been many STOs so far, but it could change. Another STO that was well received was SwissRealCoin, although at first it was involved in some local regulatory barriers.
The Aspen Digital token seems to have a much stronger legal basis, as is offered by the Reg D of the SEC, Rule 506 (c), General Solicitation, by Templum Markets LLC, a broker-dealer registered with the Securities and Exchange Commission. Templum is also a member of the Financial Regulatory Authority (FINRA). The United States remained behind in the regulatory space of the blockchain, but it seems Indygogo et al. they have found a way to operate in the existing financial infrastructure.
New ways to capitalize on the market
The Aspen Digital token is another way in which cryptids can be exchanged for hard goods. It is noteworthy that established venture capital firms are open to the acceptance of important encryption such as Bitcoin and Ethereum is the capital exchange in a luxury resort.
Stephane de Baets, the president of Elevated Returns, comments the new token through a statement  "Security token offerings are the investment tool of the future, a mechanism designed to store wealth using digital assets that generate income, "and continued," By opening the access to investment in traditional assets like real estate, we are creating a new opportunity for investors to explore a share of property in something that was previously only accessible to private investors. And individuals with high net worth Indiegogo is a well-known and trusted name in alternative finance and cryptocurrency, making them an incredible partner to leverage their influence, experience and global audience. "
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There is a huge amount of real estate globally, and if the tokenized sales become popular, this type of funding structure could become much more common. As illustrated in the previous example, there are some legal considerations that depend on jurisdiction. The Aspen Digital token seems to be a simpler system, as it has a fixed amount of capital and is limited to a business and property.
SwissRealCoin was designed as an open entity, presenting some challenges. Not all real estate initiatives will have the same return and all will require management to maintain their value. In practical terms, this means that investors buy both hard assets and a management group. The purchase in a managed portfolio of real estate will require due diligence, which puts Indiegogo in a good position going forward if the STO market held by real estate heats up.