ISAO: An Alternative Way of Raising Capital for Businesses

What is the always existing need in business? The need for capital for its development is crucial.

The traditional way to get funding is to apply for a loan.
However, it is usually quite difficult for a business to get the loan. Due to the lack of capital,the business grows much more slowly than it could have.

BANKEX offers an alternative way of receive capital for business development — ISAO.

What is ISAO?
ISAO (Initial Smart Asset Offering) is a new way for businesses to raise captial using asset tokenization based on the BANKEX Proof-of-Asset protocol.

Who benefits from ISAO ?
ISAO can be carried out if the following condtions are fulfilled:
The asset is currently generating cash flows. ISAO can not be used for a R&D project.
Presence of a large number of asset owners or decentralized assets.
Standardized end-product, which allows to isolate meta-information when the smart-asset is being created. This allows trading assets with other assets.

The token can be used by a large number of investors to own an asset.
An example would be a shared ownership of a real estate project.
Have control over the sales of the end-product and can quickly and unamiguously measure the characteristics that effect the quality and quantity of the end-product.

Why ISAO is better than ICO?
A lot of business owners see a huge potential in an ICO for raising capital. Business owners understand that such capital has lower cost than a capital from banks or VC. In addition, this way of getting funded has lower management risks as the business owner remains as the decision maker.

Farmers, factory owner, dentists are all considering creating their own tokens. Let’s, why does a Lithium factory in Argentina need a token? There is no need for it. As a token requires blockchain
usage what will involve hiring blockchain programmers, IT infrastructure creation and its maintenance. It is a pointless and very expensive procedure.

However, now there is a new way for buinesses to raise capital just as quickly as launching an ICO yet avoid the complicated technical challegnes.

The procedure ICO — Initial Coin Offering — is more suitable for technical platforms and infrastructures that contribute to the growth of the decentralized economy. For tokenization of real assets in different sectors of the economy ISAO is more suited.

How ISAO works?
In general, 3 entities are involved in the process:
Originator — the owner of an asset.
Supplier — the purchaser of the tokenized asset, i.e investor.
Product owner — the company that creates fintech products as well as provides technology for tokenization, e.g. BANKEX.
Everybody wins: originators are granted with new business opportunities, suppliers can increase their investment portfolio, and product owners benefit from conducting transactions between originators and suppliers.