As the Initial Coin Offering (ICO) hype is waning, more projects
are exploring the idea of Security Token Offerings (STOs).
“With a [coin offering] that’s clearly a security (like a stock
or bond), every business with a new idea can tap into the growing
pool of liquidity provided by crypto markets. If you’re running a
small company, you just sell a part of the company through a token
offering. That offering can come with the promise of dividends,
voting rights for token-holders and, most important, accountability
to investors,” according to Juan Villaverde , an econometrician
and mathematician, team lead at Weiss Ratings, a veteran firm
dedicated to analyzing investments.
Therefore, even traditional businesses have launched STOs .
Now, a Lithuanian ice cream shop chain called Soprano is dipping
into the world of STOs as a means to raise capital to finance
their expansion into Europe. They have already been operating in
Lithuania for 18 years, and now they have just concluded their
first investing round, led by Antanas Guoga, Member of European
Parliament, a serial entrepreneur, investor, and backer of
Cryptonews.com , and local entrepreneur Vytenis Mažiulis, both
bringing equal investment.
The network, comprised of seven shops operating in Vilnius, Kaunas
and Klaipėda is soon starting its second funding round, which will
be done in the form of an STO. The business currently has 46
employees and EUR 1-2 million turnover, and is looking to expand
into Latvia, Estonia, Poland, Germany and other countries.
Cryptonews.com talked to Antanas Guoga about what the next steps
are.
Please tell us more about the second round of investing. This is
the one that’s going to be an STO?
Yes, it’s going to be a European STO, so we can be sure it’s
legal. We’re looking to raise EUR 5 to 8 million, but most likely
just EUR 5 million, because that’s all we need. We already have
all the technology, we have a great ice cream brand and we plan to
expand all over the world. It’s a really profitable business, and
we plan to do this similar to paying royalties. It’s very simple:
people will get a percentage of sales, we planned around 2%. If you
have the token, you get the royalty paid directly to you.
When is this all taking place?
We’ll have something online within the next 30 days. If people
want to be on a list, they can send us an email. In short - it’s
going on right now.
Everyone can participate, right? It’s not going to be a private
sale?
Yes, that’s the plan.
Will you mandate any advisers or consultants for the STO?
We’re not planning it, but we’re open to everybody. It’s more
of a trial - we have a lot of demand from private investors that we
set a good example for the industry, show that we can deliver a
regular return to investors.
At the moment, we’re not really looking. If someone comes and
says, “You know, I love ice cream and I want to participate,”
then we’re open. But we’re not actively looking for advisers.
Why choose STO as a means to raise capital?
I'm a big believer in the industry and I really want to bring great
projects that people from all over the world can invest into and
can participate in. It is really cool to put some real businesses on
the blockchain and deliver it to people through royalty fees. You
can even pay people daily, or however frequently you like. The
smart contract allows you to just pay the dividend and it comes
directly. The business is thriving, so it can afford the payroll for
people who have contributed to it.
So it is a royalty, not a dividend?
Yes, it’s a royalty. I think that by European laws, EUR 5 - 8
million can be enough for established businesses to get extra
capital and pay a royalty, so people have a real asset to hold. It’s
also really reasonable to pay them - imagine getting royalties on
Tesla, or whatever it is that people are making and need a bit of
capital to take the business further.
And the participants will be getting 2%?
Yes, at the moment. It’s not finalized, but that’s our main
idea. If we sell an ice cream for three euros, that’s six cents
going towards the people holding tokens. It’s very easy, very
transparent and very simplified.
How do you plan to spend the raised capital?
It's purely going into expansion. We want to be able to show the
books and show how the business is going. Using blockchain and
cryptocurrencies brings that to the next level. Of course, you can
also reward people for using an app and making purchases, you can
give them Soprano tokens, include traceability into everything
they buy etc. People can scan the barcode and trace their product.
On top of that, they can automatically get credited with some
Soprano coins. And I think Soprano can be a huge brand.
You and Mažiulis have already invested in this business. How much
did you pay and what stake did you acquire?
Around EUR 500,000. We basically now own the whole business, and
we just closed the deal. The previous owners are staying on board
for some of that.
Where are you guys expanding?
We’re going all over the world. We’ll be using a franchise model
to open our own stores, to become recognized. Soprano is actually
a dominant brand here already.
Anyone who wants to be part of the Soprano chain can apply for a
license?
Send us an e-mail if you’re interested! If you’d like to invest
or advise, let us know, or become the first with franchise rights
for the blockchain ice cream. It’s really easy to set up.
What about revenue this year compared to last year?
Revenue grew by about 30%, because the summer in Europe lasted
much longer and was much stronger than usual. Obviously, ice cream
is a seasonal business. However, we’re expanding into Soprano
coffee too, to enter the coffee market on the blockchain as well.
It’s going to be really exciting without risking a lot of money.
It’s going to be a lot of fun to take on the biggest brands in
the world using cryptocurrency and the blockchain.
What’s the forecast for 2019? Do you expect more growth?
I do think we’ll get more growth due to the publicity, as top
portals in Lithuania are writing about us. So, just from Lithuania,
it’s still a huge amount of growth that can generate serious cash
flow and profit on a monthly basis.
How much can each participant invest? Can I just go out, give you
EUR 5 million and be the only one?
No, no. We will obviously have a cap. We want people from all over
the world to participate. I guess we’re talking about
contributions of EUR 500 or similar, that would be ideal. Those
EUR 500 might be worth a fortune in seven years or so. Obviously,
there’s no guarantee, but we really want the industry to have
great projects that can deliver real money, so others can see the
business grow and learn from it.
So when is this all taking place?
We’ll have something online within the next 30 days. If people
want to be on a list, they can send us an email. We’re open to
both that and any advisers. In short - it’s going on right now.
Do you have any STO plans regarding other businesses you’ve
invested in?
We do! I think we’ll bring them in one by one, see how the
legalities function. Obviously, there’s a lot of markets with much
stricter regulations. But it really seems to be making progress
now, and I think STOs are the future, they can even empower
venture capitalists to invest. The beauty of STOs is that they have
liquidity - your money is not locked for any amount of time, you
have a contract and you can trade straight away. I think that’s
the future of the financing world. There are still a lot of hurdles,
especially legally, about which markets you can target. Still,
Europe is definitely the jurisdiction for STOs, because we don’t
have the draconian security laws that America has. America will be
off the books, as they’re very difficult and expensive to do.
On the legal side, what’s the biggest roadblock to STOs?
The biggest roadblock is that a lot of markets are closed. You have
to look at each jurisdiction one by one to figure out the laws.
Still, a lot of markets are already open for STOs. It’s just that
many countries don’t have the security laws necessary. You want
markets that are easier to target - and that’s another beauty of
blockchain, you can save money on expensive lawyers and get funds
to entrepreneurs, and people trust you. This way, we can deliver
more projects that can change the world and have people participate
in them. When you have royalties, that changes the game. You’re
making everything fair for the contributors and investors.
are exploring the idea of Security Token Offerings (STOs).
“With a [coin offering] that’s clearly a security (like a stock
or bond), every business with a new idea can tap into the growing
pool of liquidity provided by crypto markets. If you’re running a
small company, you just sell a part of the company through a token
offering. That offering can come with the promise of dividends,
voting rights for token-holders and, most important, accountability
to investors,” according to Juan Villaverde , an econometrician
and mathematician, team lead at Weiss Ratings, a veteran firm
dedicated to analyzing investments.
Therefore, even traditional businesses have launched STOs .
Now, a Lithuanian ice cream shop chain called Soprano is dipping
into the world of STOs as a means to raise capital to finance
their expansion into Europe. They have already been operating in
Lithuania for 18 years, and now they have just concluded their
first investing round, led by Antanas Guoga, Member of European
Parliament, a serial entrepreneur, investor, and backer of
Cryptonews.com , and local entrepreneur Vytenis Mažiulis, both
bringing equal investment.
The network, comprised of seven shops operating in Vilnius, Kaunas
and Klaipėda is soon starting its second funding round, which will
be done in the form of an STO. The business currently has 46
employees and EUR 1-2 million turnover, and is looking to expand
into Latvia, Estonia, Poland, Germany and other countries.
Cryptonews.com talked to Antanas Guoga about what the next steps
are.
Please tell us more about the second round of investing. This is
the one that’s going to be an STO?
Yes, it’s going to be a European STO, so we can be sure it’s
legal. We’re looking to raise EUR 5 to 8 million, but most likely
just EUR 5 million, because that’s all we need. We already have
all the technology, we have a great ice cream brand and we plan to
expand all over the world. It’s a really profitable business, and
we plan to do this similar to paying royalties. It’s very simple:
people will get a percentage of sales, we planned around 2%. If you
have the token, you get the royalty paid directly to you.
When is this all taking place?
We’ll have something online within the next 30 days. If people
want to be on a list, they can send us an email. In short - it’s
going on right now.
Everyone can participate, right? It’s not going to be a private
sale?
Yes, that’s the plan.
Will you mandate any advisers or consultants for the STO?
We’re not planning it, but we’re open to everybody. It’s more
of a trial - we have a lot of demand from private investors that we
set a good example for the industry, show that we can deliver a
regular return to investors.
At the moment, we’re not really looking. If someone comes and
says, “You know, I love ice cream and I want to participate,”
then we’re open. But we’re not actively looking for advisers.
Why choose STO as a means to raise capital?
I'm a big believer in the industry and I really want to bring great
projects that people from all over the world can invest into and
can participate in. It is really cool to put some real businesses on
the blockchain and deliver it to people through royalty fees. You
can even pay people daily, or however frequently you like. The
smart contract allows you to just pay the dividend and it comes
directly. The business is thriving, so it can afford the payroll for
people who have contributed to it.
So it is a royalty, not a dividend?
Yes, it’s a royalty. I think that by European laws, EUR 5 - 8
million can be enough for established businesses to get extra
capital and pay a royalty, so people have a real asset to hold. It’s
also really reasonable to pay them - imagine getting royalties on
Tesla, or whatever it is that people are making and need a bit of
capital to take the business further.
And the participants will be getting 2%?
Yes, at the moment. It’s not finalized, but that’s our main
idea. If we sell an ice cream for three euros, that’s six cents
going towards the people holding tokens. It’s very easy, very
transparent and very simplified.
How do you plan to spend the raised capital?
It's purely going into expansion. We want to be able to show the
books and show how the business is going. Using blockchain and
cryptocurrencies brings that to the next level. Of course, you can
also reward people for using an app and making purchases, you can
give them Soprano tokens, include traceability into everything
they buy etc. People can scan the barcode and trace their product.
On top of that, they can automatically get credited with some
Soprano coins. And I think Soprano can be a huge brand.
You and Mažiulis have already invested in this business. How much
did you pay and what stake did you acquire?
Around EUR 500,000. We basically now own the whole business, and
we just closed the deal. The previous owners are staying on board
for some of that.
Where are you guys expanding?
We’re going all over the world. We’ll be using a franchise model
to open our own stores, to become recognized. Soprano is actually
a dominant brand here already.
Anyone who wants to be part of the Soprano chain can apply for a
license?
Send us an e-mail if you’re interested! If you’d like to invest
or advise, let us know, or become the first with franchise rights
for the blockchain ice cream. It’s really easy to set up.
What about revenue this year compared to last year?
Revenue grew by about 30%, because the summer in Europe lasted
much longer and was much stronger than usual. Obviously, ice cream
is a seasonal business. However, we’re expanding into Soprano
coffee too, to enter the coffee market on the blockchain as well.
It’s going to be really exciting without risking a lot of money.
It’s going to be a lot of fun to take on the biggest brands in
the world using cryptocurrency and the blockchain.
What’s the forecast for 2019? Do you expect more growth?
I do think we’ll get more growth due to the publicity, as top
portals in Lithuania are writing about us. So, just from Lithuania,
it’s still a huge amount of growth that can generate serious cash
flow and profit on a monthly basis.
How much can each participant invest? Can I just go out, give you
EUR 5 million and be the only one?
No, no. We will obviously have a cap. We want people from all over
the world to participate. I guess we’re talking about
contributions of EUR 500 or similar, that would be ideal. Those
EUR 500 might be worth a fortune in seven years or so. Obviously,
there’s no guarantee, but we really want the industry to have
great projects that can deliver real money, so others can see the
business grow and learn from it.
So when is this all taking place?
We’ll have something online within the next 30 days. If people
want to be on a list, they can send us an email. We’re open to
both that and any advisers. In short - it’s going on right now.
Do you have any STO plans regarding other businesses you’ve
invested in?
We do! I think we’ll bring them in one by one, see how the
legalities function. Obviously, there’s a lot of markets with much
stricter regulations. But it really seems to be making progress
now, and I think STOs are the future, they can even empower
venture capitalists to invest. The beauty of STOs is that they have
liquidity - your money is not locked for any amount of time, you
have a contract and you can trade straight away. I think that’s
the future of the financing world. There are still a lot of hurdles,
especially legally, about which markets you can target. Still,
Europe is definitely the jurisdiction for STOs, because we don’t
have the draconian security laws that America has. America will be
off the books, as they’re very difficult and expensive to do.
On the legal side, what’s the biggest roadblock to STOs?
The biggest roadblock is that a lot of markets are closed. You have
to look at each jurisdiction one by one to figure out the laws.
Still, a lot of markets are already open for STOs. It’s just that
many countries don’t have the security laws necessary. You want
markets that are easier to target - and that’s another beauty of
blockchain, you can save money on expensive lawyers and get funds
to entrepreneurs, and people trust you. This way, we can deliver
more projects that can change the world and have people participate
in them. When you have royalties, that changes the game. You’re
making everything fair for the contributors and investors.
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