Vertalo says the tokenization revolution is coming, and step one is cap tables on blockchain

Quick Take

  • A partnership between Vertalo and Prime Trust is acting as step one to tokenizing already-completed offerings
  • Vertalo puts cap tables on the blockchain, acting as a database for the assets, where investors can view their positions

A partnership putting startup capitalization tables onto the blockchain says it’s providing the first step to the tokenization revolution. Vertalo, a blockchain service provider for private companies, is partnering with Prime Trust to provide a path for startups to tokenize already completed fundraises.

Vertalo looks like Carta, which provides software for companies to manage their cap tables, but with a blockchain bent. It allows investors to see their positions just as Carta does, but uses a blockchain as its record for transactions.

At its core, CEO Dave Hendricks says Vertalo is a cap table using blockchain as its database. The company allows startups to manage their cap tables — which show analysis and breakdown of equity and ownership — on blockchain with the option to tokenize shares at a later date. 

“We can do this with a couple of buttons, to turn their regular cap table into a token,” he said.

Despite ongoing conversations of the possibilities of tokenization in the industry, security token offerings have seemed to slow down, with less news of STOs. Harbor's tokenized construction project, which promised a megadorm with tokenized backing, eventually went under. Rather than jumping immediately to tokenization, Vertalo argues an STO isn't the first step, it's introducing blockchain to equity.

The ability to transform a "paper" asset into a digital asset will be pivotal, according to Hendricks, and even more importantly, to lower the barrier to entry for companies to go digital since Vertalo abstracts the need for a wallet. Companies like Securitize among others require investors to set up a wallet to get involved in a sale. Kevin Lehtiniitty, Chief Product Officer at Prime Trust, said this makes it challenging for traditional finance players to dip their toes into digital. For Lehtiniitty, mitigating the need for a wallet was particularly impressive.

“If you think about crypto, the average