By
Bhushan Akolkar
April 25th, 2024
SEC-approved Long-Term Stock Exchange set to enable companies raise funds using traditional means and empower investors committed to long-term success.
With the development of blockchain and digital currencies, companies have got access to a wider number of ways to raise capital and tools to attract investors. In particular, Initial Coin Offerings (ICOs) and later Security Token Offerings (STOs) have quickly become popular.
To promote projects in these ways, companies apply to stock exchanges. However, investments in such cases are made in the short run only. To enable companies to raise funds through traditional means and popularize long-term thinking among market participants, Long-Term Stock Exchange (LTSE) has been founded.
Long-Term Stock Exchange: Solution for 21st-Century Companies
Long-Term Stock Exchange (LTSE) is a relatively new U.S. stock exchange designed from the ground up with a vision to help companies create lasting businesses and empower investors committed to long-term success. LTSE has been created by Eric Ries, an influential entrepreneur and startup adviser.
As Cointelegraph has reported, LTSE will mandate companies that list on its exchange and shareholders to adopt a set of corporate governance principles based on long-term thinking. They include publishing key indicators of future growth and limit emphasis on quarterly predictions and linking executive pay and bonuses to projected performance over the coming decade. Moreover, the LTSE team is planning to establish a structure that allows investors to keep their stake for longer in order to generate more voting rights.
Eric Ries said:
“For the next generation of what we like to call ‘modern companies’: What are their values? They want to be able to build an institution that can last; they’re not focused on trying to play the beat and raise game; they want to know who their long-term shareholders are.”
The LTSE team believes that by encouraging newly created companies with long-term growth potential go public early, they can stimulate everybody to share in the newly created wealth.
LTSE will launch in the near future. According to Ries, he already sees interest in the exchange both from private startups and some companies that are already public.
LTSE Receives Approval From SEC
On May 10, the Long-Term Stock Exchange has received approval from the Securities and Exchange Commission, which means it can operate as a US national securities exchange. According to the press release, the approval enabled LTSE to conduct listings and authorized the company to operate a fully automated electronic platform for the buying and selling of shares.
Zoran Perkov, the exchange’s chief executive, commented at that time:
“We welcome the approval, which advances our vision of a new way of being public for a generation of companies that aspire to build their businesses and generate value for decades to come.”
Eric Ries said:
“One of the powers of having the regulatory approval is that we’ll soon be able to formally solicit companies to list with us. We don’t have a traditional customer pipeline. On the other hand, we have deep relationships with these companies. That’s also our job, to find ways to be helpful to them.”
LTSE: Influence On The Crypto Industry
LTSE strongly believes in their success as they plan to work with companies in a variety of industries using widely acceptable investment tools, which may result in opportunities for mutual growth of crypto sphere and other fields and attract the attention of more traditional market players to the blockchain.
There is also a possibility that LTSE will allow early-stage companies to get access to public funds when expanding their activity. However, its offering may be limited to just companies in the US, since the exchange is basing its operations there. Moreover, for smaller foreign companies that turn to the crypto market for funds, there may be too many listing requirements. That’s why for them STO is still the best option to get long-term growth capital from public investors.