Funderbeam partners with ChromaWay

Funderbeam, the provider of data intelligence on startups, is planning to launch the world's first syndicated startup investment trading platform which will use the colored coins to record trades. Urmas Peiker, co-founder of Funderbeam, revealed the plans while speaking to IBTimes.

She said, "There is a lot of money available to startups. The investment cycle is heavily front-loaded, however. Once you've invested in an early-stage company, but want to sell your stake, or a sliver of it, what are your options?

"There aren't many. It's cumbersome, costly, emotional, and just feels weird - because it's not yet commonplace. Or if you've missed out on an investment round and want to join in later.

"It's time to upgrade our thinking and ask how it should all happen in the future, and then go ahead and do it."

The company explained in a blog post that the trading platform will bring liquidity to syndicated startup investments, using blockchain technology to verify and enforce trades. To do this, Funderbeam has collaborated with ChromaWay, creator of the world's first colored coins.

Henrik Hjelte, Chief Executive Officer of ChromaWay, stressed that "connecting the virtual tokens to real assets has a lot of subtleties".

He told IBTimes: "While the technology is based on the Bitcoin security model, there are still details about how added protocols work that affect security, and we believe ChromaWay has the best protocol for security and taking advantage of what is really good in terms of blockchain innovation.

"Most complexities are probably on the regulatory side. Funderbeam's domain expertise here is crucial to a project like this.

"We believe that existing laws in many jurisdictions are compatible with innovative technology like this. But it takes some time and know-how to get it right and communicate with relevant authorities," said Hjelte.

When the Funderbeam marketplace launches, users will be able to easily create or join a syndicate (with other legal entities to follow). Members can then trade the syndicate's digital tokens (colored coins), secured by the bitcoin blockchain. This creates an aftermarket that finally brings liquidity to startup investments worldwide, Funderbeam said in a blog post.