Written by Andrew Seale
There’s a legion of cryptocurrency renegades rallying against a centralized system they see as broken and corrupt. They’re forming their own digital currencies and moving overseas to run initial coin offerings (ICOs) – fundraising rounds backed by their own currency – away from the watchful eyes of regulators.
Alan Wunsche is not one of them.
He’s an innovator, sure. And bullish on the future of the blockchain as a method for fundraising. But he’s no renegade.
“I'm probably the poster child for doing it the right way,” says the founder of TokenFunder, a blockchain-powered financing platform to help startups and innovators raise capital. “Those that left the country to do unregulated ICOs are finding themselves in legal hot water.”
Instead, Wunsche wanted to work with regulators. And more so, he wanted regulators to work with this emerging blockchain economy. “We knew it was a long-term play we were going to take on and we wanted to make sure that Canada was seen as doing it the right way.”
Wunsche is a Chartered Professional Accountant. He’s also an entrepreneur. “I've been in the fintech space for 20 years, I had an exit in the dot-com boom then helped build the first accelerator that ultimately became MaRS,” he says.
When Toronto-grown, blockchain platform Ethereum launched in 2015, Wunsche was a part of a small group of crypto advocates hosting meetups. He helped to found Blockchain Canada and chaired the organization for three years. Amidst it all, ICOs started popping up.
“In the summer of 2016, I realized this is going to be quite a phenomenon and yet (there were) some problems with it,” recalls Wunsche. The lack of disclosure for investors, for example, didn’t sit right with his CPA sensibilities. He approached the Ontario Securities Commission, and at a good time – coincidentally, the OSC was in the process of starting LaunchPad, an initiative to help fintech businesses meet regulatory requirements while also guiding regulations to keep pace with the emerging digital economy.
Wunsche says he knew the regulators needed time to adjust. He also had a feeling they would. So he launched TokenFunder in 2016 to help startups take advantage of digital tokens in a regulatory compliant way as the industry evolved.
“Our long-term vision has been to help with capital raise,” he says. “We don't want to be another crowdfunding platform.”
Instead, the aim of TokenFunder – which became an exempt market dealer capable of issuing securities this year after a lengthy process – is to treat token offerings more like securities.
“You can have an equity offering, a debt offering… we’re bringing capital markets onto the blockchain and allowing for people to invest with cryptocurrency,” he says. Once you’re a digital shareholder, there’s liquidity – you can buy and sell and trade these shares of companies. “It’s pretty exciting what you can do with the technology.”
Wunsche says he envisions businesses using TokenFunder as a means to offer digital shares of a company to loyal customers, an extra buy-in for customers who truly believe in the company’s success.
“We're merging crowdfunding and share ownership with customer loyalty which is something no one else is doing either,” says Wunsche.
It’s a new space, one that regulators are only just wrapping their heads around. “We've created a model that supports all the regulatory side,” says the TokenFunder founder. “You don't have to be a blockchain startup to take advantage of this but you need to be able to do it the right way.”
Photo credit: Cameron Bartlett (www.snappedbycam.com)