PRIVATE MARKETS
CORE VALUE PROPOSITION
A next-generation exchange that tokenizes private company equity and uses AI-driven continuous compliance monitoring to democratize access to high-growth private markets while maintaining investor protection.
THE PROBLEM
- • Private markets are dominated by institutional investors and private equity funds, keeping retail investors out
- • Companies go public much later (at trillion-dollar valuations rather than billions), after most growth has occurred
- • This system exacerbates income inequality as institutional investors capture most of the upside
- • Companies often go public only after exhausting "rational investors" in private markets
- • Traditional exchanges are limited hours and costly to access and list
THE SOLUTION
- • Tokenize ownership of vetted private companies ($10–30M+ revenue or strong recurring revenue)
- • Always-on AI taps company financial APIs to produce real-time compliance scores
- • 24/7 global trading access with lower fees and simplified participation
- • Create tokenized ownership of companies with $10-30M+ in revenue
- • Implement AI monitoring that taps into company financial APIs (bank accounts, receivables)
- • AI provides real-time compliance rankings or "smell tests" to validate legitimacy
- • Goal: provide retail investors access while maintaining fraud protection
WHY TOKENIZATION VS. TRADITIONAL MARKETS
24/7 GLOBAL LIQUIDITY
Unlike traditional exchanges limited to 35 hours/week, tokenized assets trade continuously across time zones
LOWER BARRIERS TO ENTRY
No costly listing requirements—companies connect financial APIs and receive continuous compliance scores
REDUCED INTERMEDIATION COSTS
Smart contracts replace clearing houses, transfer agents, and multiple layers of settlement infrastructure
REAL-TIME FRAUD PREVENTION
AI monitoring provides continuous "smell tests" vs. periodic audits that miss problems for quarters
EARLIER RETAIL ACCESS
Investors can participate in $10-30M+ revenue companies before late-stage billion-dollar private rounds
PROGRAMMABLE COMPLIANCE
Smart contracts enforce accreditation, holding periods, and transfer restrictions automatically
COMPOSABILITY
Tokenized equity can be used as collateral in DeFi lending or bundled into index products
GLOBAL ATOMIC SETTLEMENT
Cross-border transactions settle instantly without correspondent banking delays
TECHNICAL ARCHITECTURE
1. ISSUER ONBOARDING LAYER+
- • Companies grant API access to banking, accounting, and revenue systems (Plaid, Stripe, QuickBooks integrations)
- • Smart contract mints ERC-20 or similar tokens representing fractional equity ownership
- • Cap table automatically syncs on-chain with each transaction
- • Minimum criteria: $10M+ revenue OR $5M+ recurring revenue with 80%+ retention
2. AI COMPLIANCE ENGINE+
- • Continuous ingestion of financial telemetry data (cash flows, AR aging, bank balances, transaction patterns)
- • Machine learning models trained on fraud indicators, financial distress signals, and industry benchmarks
- • Real-time compliance score (0-100) displayed to all market participants
- • Automated alerts when scores drop below thresholds
- • Natural language explanation of score factors for transparency
3. TRADING INFRASTRUCTURE+
- • Automated Market Maker (AMM): Constant product formula (x*y=k) ensures instant execution
- • Hybrid order book option: For larger cap issuers, combine AMM with limit order book
- • Multi-chain deployment: Launch on Ethereum L2 (Arbitrum/Base) for lower gas fees
- • Fiat on/off ramps: Partner with stablecoin providers for seamless USD↔USDC conversion
4. INVESTOR PROTECTION MECHANISMS+
- • Accreditation verification for non-tokenized securities (Reg D equivalent)
- • Investment limits for non-accredited investors (e.g., 10% of annual income per issuer)
- • Mandatory holding periods for certain issuers (lockups encoded in smart contracts)
- • Insurance fund capitalized by protocol fees to cover edge cases
BUSINESS MODEL
REVENUE STREAMS
MARKET OPPORTUNITY
- • Private markets AUM in the trillions with limited retail access today
- • Retail brokerage and alt-investing platforms rapidly growing
- • Maturing fintech and open banking APIs enable continuous data access
- • Advances in AI allow automated fraud detection and "smell tests"
- • Appetite for broader participation in private markets and secondary liquidity
COMPETITION & DIFFERENTIATION
DIRECT COMPETITORS
INDIRECT COMPETITORS
OUR COMPETITIVE ADVANTAGES (MOAT)
- • Only platform combining tokenization + AMM liquidity + AI compliance in integrated stack
- • Focus on $10-30M+ revenue companies (sweet spot between crowdfunding and late-stage PE)
- • Continuous monitoring creates proprietary compliance dataset that becomes more valuable with scale
- • Network effects from two-sided marketplace liquidity
- • 24/7 access + AI-native continuous compliance vs. periodic reporting
SUCCESS METRICS & TRACTION
KEY PERFORMANCE INDICATORS
CURRENT TRACTION
- • Early conversations and debate highlight strong interest across stakeholders
- • Planned pilots with companies in $10–30M+ revenue range
REGULATORY STRATEGY
UNITED STATES
Operate as Alternative Trading System (ATS) registered with SEC. Partner with broker-dealer for custody. Limit to Reg D (506(c)) offerings initially, pursue Reg A+ pathway for non-accredited access.
EUROPEAN UNION
Leverage MiFID II framework for multilateral trading facility (MTF). Comply with MiCA regulation for tokenized securities. Establish in crypto-friendly jurisdiction with EU passporting.
LATIN AMERICA
Mexico: CNBV sandbox. Brazil: CVM framework for crowdfunding platforms. Argentina/Chile: Leverage existing private market exemptions with blockchain rails.
ASIA-PACIFIC
Singapore: MAS VCC structure for tokenized funds. Hong Kong: SFC licensing for virtual asset trading platform focused on security tokens.
EXIT STRATEGY
- • Acquisition by major exchange: Nasdaq, CME, or Intercontinental Exchange acquiring technology and regulatory licenses
- • Crypto-native buyer: Coinbase, Kraken, or Binance adding securities to pure crypto offerings
- • Financial infrastructure provider: Fidelity, BlackRock, or State Street integrating tokenized private markets
- • IPO/direct listing: Once reach scale ($500M+ annual volume), public markets for continued growth capital
KEY INSIGHT
This isn't just about technology—it's about creating access to private market returns that currently only institutions capture, using modern tools (blockchain + AI) to solve the fraud prevention problem that has historically justified keeping retail investors out.