Table of Content
- 1 What is a Smart Company?
- 1.1 1. What is Korporatio?
- 1.2 2. Smart Companies – Please tell us more
- 1.3 3. Interesting. Can you give us some specific examples of why people should use this solution instead of a traditional company?
- 1.4 4. Incredible – so basically, what you’re saying is virtually anything illiquid could be tokenized through the Smart Company model?
- 1.5 5. I’m pretty blown away by all of this. Correct me if I’m wrong, but this would mean an individual tokenizing themselves would then do this by issuing their personal token?
- 1.6 6. So, how about today then – you mentioned the model can work for startups and bigger companies as well. Do they have to be blockchain related?
- 1.7 7. Beautiful. And final question – if you could have your message delivered to everyone in the blockchain space today, what would you say?
What is a Smart Company?
Running a media company in the Bitcoin/Crypto space is tough. Finding finance within a decentralised industry is REALLY tough. Fortunately, we have survived the bear market and won the respect of some investors. In our search for the best and most cost-effective way to bring shareholders into the company we came across Stefano Covolan and his company Korporatio. Yes, there is some irony in using the Ethereum blockchain to issue shares after being a Bitcoin website for three years but we are very confident in the product Korporatio offer.
Along with Andrea from Fvtura, a social impact fund also utilising Korporatio, we sat down to learn more about the company. We have filmed extensively with both Stefano and Andrea this year and you can learn more about the benefits of Korporatio in our series ‘The Real Cryptos‘ and the amazing things happening with Fvtura. Be sure to subscribe to our youtube channel to learn more.
Here is my interview with Stefano from Korporatio
1. What is Korporatio?
In a nutshell, Korporatio enables real companies on the blockchain. We streamline all things corporate governance into a few clicks on a digital dashboard, all governed by smart contracts on Ethereum. In essence, we have created a completely new legal company type called the Smart Company (SC) that enables business governance to be completely streamlined: no paperwork, no endorsement nor replication, no middlemen.
2. Smart Companies – Please tell us more
So, the easiest way to understand a Smart Company is to think of them as a hybrid between any limited company type and a Decentralized Autonomous Organization (DAO). So your company has a full legal identity and benefits from all the features that come with a blockchain-powered solution such as speed, costs, transparency and verifiability.
For instance, corporate transactions in a traditional company require multiple steps, time, paperwork and costs. Performing these same steps via our dApp, every corporate event happens as soon as Ethereum’s block for the specific transaction is confirmed, in real time. This opens up the potential for completely rethinking corporate management, reducing human error and most importantly, increasing speed, accuracy, efficiency and efficacy.
However, what really sets Smart Companies apart from legacy companies is the ability to convert corporate shares into tokens. These are registered on the blockchain as Ethereum ERC-20 tokens modified for security laws, and carry information that makes them unique to each organization (tracks the history of their movements, without interfering with the legal validity of the share).
3. Interesting. Can you give us some specific examples of why people should use this solution instead of a traditional company?
The model offers different benefits depending on the size of the company we are considering. A Startup that is raising funds will probably have to execute multiple shares transfers based on the number of investors they are able to find. Each transfer requires signing multiple documents, coordinating with lawyers and incorporation agents and could easily cost hundreds or even thousands of dollars per transfer. A Smart Company allows all of this to be automated, executed in a matter of minutes (instead of weeks) and cost you just a few cents. We believe this makes founders’ lives much easier.
As the dashboard is a dApp and everything is transparent, investors can view the company cap table whenever they want, without having to ask information from anyone, this could help investors to analyze the performance of their portfolios in a clearer and faster way.
Let’s assume now we have a bigger company, with a board created by multiple individuals (or companies). Every board meeting would need to happen in person, or online, and this means having to coordinate with all parties. With a Smart Company, voting can happen directly online without the need of having everybody available at the same specific time. Members can vote for a specific decision directly on the dashboard. This helps the company management to be, once again, faster and easier than the traditional way.
Last but not least, blockchain is enabling distributed ownership of assets, or in general offering liquidity on illiquid assets. Some famous examples of projects working in the space are around distributed ownership of real estate or arts. A smart company deletes the barriers of a specific sector and expands it to everything: arts, real estate, IPs, copyrights (music, images and books), wine and whiskey collections, sports players, influencers, etc.
Imagine your dream is to start a travelling vlog channel but you don’t have the resources to do it, a Smart Company offers you two solutions:
- You can create a company and put your videos as assets of your company and shareholders will be able to own a part of those materials and therefore they are entitled to a part of the revenue;
- You can have yourself as an asset, in this way the shareholders will be entitled to own a piece of the profits not only of what you have produced in the past but also of what you will produce in the future. This can be applied also to sponsor content you will produce that is not directly related to your vlogging channel.
4. Incredible – so basically, what you’re saying is virtually anything illiquid could be tokenized through the Smart Company model?
Good point. Actually, we already have clients who incorporate ‘themselves’ through Smart Companies. Some of them are sports athletes, others are social media influencers – what connects them is their individual talent that has been difficult to convert with a digital presentation before. This is quite interesting considering real use cases because our clients are often even more creative than we are!
Now, the reason people tokenize themselves is simply because again, this opens the door to another realm of possibilities: entrepreneurs can tokenize their business ideas, freelance designers have access to a global pool and own their own data as intellectual property produced, athletes can get fronted with investment against their future revenue and songwriters can distribute their work with direct fan engagement without the conventional hassle of copyrights and middlemen.
None of these ideas is new per se, but as you can see, this enables us to shift from the so-called old power (institutions, top-down power) to new power, where we’ll be able to redefine value across industries through sharing profits, ownership of content, perpetual innovation with audience and monetizing with better accessibility, liquidity, transparency and verifiability. We’re still in the early days with all of this, but this is very much the future we’re envisioning, empowering source origins to directly engage with their end users.
5. I’m pretty blown away by all of this. Correct me if I’m wrong, but this would mean an individual tokenizing themselves would then do this by issuing their personal token?
What we do through our Smart-model is that we issue a unique 4-letter symbol to your company, regardless. So in that sense yes, you’ll have your own token. What people choose to do with their tokens will obviously determine the use and value of it. There is no specific rule of what type of company the user must create, but the coolest part of the model is that you can place inside it, literally anything you wish.
That’s a fair question, and an important one because this is exactly what we’re trying to educate people about it. You really don’t need to be involved in the blockchain space to set up a Smart Company. Ultimately, we are a tech provider for all things corporate governance – meaning, everything from fundraising to shares transfers and voting to treasury management can be run through our digital dashboard. That’s it. It’s all governed by smart contracts on Ethereum Main net, but as a user, all you need to do is click on a few buttons. And the rest will be automated, from your first download of the dApp to the final documentation of a business transaction.
And really, it’s not just that. Think of how much our work is already changing. Companies and teams are becoming increasingly more remote, digital and cross-border all the time. Let’s take digital nomads for instance, it’s a whole group of people running their projects and businesses from virtually all over the world. We don’t have universal guidelines and frames for these types of structures, so many nomads and freelancers actually end up being legally quite vulnerable, in lack of better and more convenient options. And we’d really like to change that.
Here’s the thing – Smart Companies as a legal model is suitable and versatile enough to serve countless different types of business models and operations. As a tech platform, it is a paperless, borderless and hassle-free way to navigate. And, last but not least, we’ve been able to shave off more than 99% of the time and money our global average user base would use on incorporating businesses and singular transactions. This is a radical difference for those on a constant move, and who value resourcefulness over resources.
7. Beautiful. And final question – if you could have your message delivered to everyone in the blockchain space today, what would you say?
Running a business is already a difficult challenge, and somehow, the world is doing an incredible job of making things even harder for us. We want to give everybody the right state of mind and tools to focus only on making things happening. Forget entry barriers to try making a living with your dream, just go for it, and let the market decide.
Get in touch with Korporatio and create your own Smart Company!