Evgeny Kabanov, Head of Rainier AG Russia, has over 20 years of entrepreneurial experience in crypto economy, trading and finance and many years of successful experience in creating and managing multi-disciplinary teams, as well as extensive expertise in Investment Relations and solid knowledge of development of Smart Contracts. In an interview to Invest Foresight, he detailed the targets Rainier AG has set for itself in Russia and globally.
What is Rainier AG’s core business and where is it active geography-wise?
Rainier AG offers investment attraction services in medium and large businesses with the help of STOs – Security Token Offerings. This is a new method that combines well-tested financial instruments with economic innovations. An STO is the conversion of company shares in a digital form which opens up a possibility to trade them on exchange platforms all over the world, far beyond a single country or a single exchange.
Ultimately, STOs open up great perspectives for companies as they help to solve the problem of financial resources deficiency and optimize and digitize important business processes by using a blockchain pipeline.
As for the business of our customer companies, from the practical point of view, we provide a full support of a project starting its own STO. Our cooperation with leading brokers, law firms, tech teams, marketing and PR agencies in the US and the EU allows us to develop solutions specifically for the tasks of the customers’ business – with all its industry peculiarities and trends in mind.
How an STO differs from an IPO?
As a matter of fact, an STO is not really that different from an IPO (Initial Public Offering). In both cases, a company has to abide by a number of requirements, disclose full information on its assets and finances, conduct due diligence, develop marketing and commercial strategy plans, file an emission Prospectus. Other general requirements include the company’s guarantees’ fulfillment after an STO/IPO is accomplished, and the disclosure of accounting in due time.
The main difference between STOs and IPOs is actually hidden within the companies in need of investment attraction. An initial public offering is a lengthy process which includes a wide range of intermediaries and each phase requires substantial monetary investment. Additionally, IPOs have a definite link to specific states and exchanges, and this narrows down both the company and investors’ opportunities, to a certain extent. The path of IPOs is difficult; it is applicable mostly to large corporations with multi-million turnover in the last few years.
Today, an IPO is a process that is more understandable to executives and top management, as one might say, a beaten path that has been walked by many companies and there are certain lessons one can learn from their experience.
To conduct an STO, one needs to spend a lot less money and time; also, intermediaries accompanying the process are not necessary. This way of investment attraction suits prospective startups, mid-tier and high-tier businesses that cannot start an IPO. For instance, STOs can be started by companies that did not have high turnover figures until recently yet have all preconditions to increase their market share. One more difference here is that tokenized (digitized) shares can be traded worldwide online, just like in the future to receive dividends with minimal expenses for these operations. The path of STOs is new for the Russian realia, but it already allows taking advantage of access to global investments.
Why Rainier AG decided to come to Russia?
The Russian market is special in many regards. There are many fast-growing companies attractive for investors (mineral companies, for example), these companies have fully realized their potential in a certain niche or a certain market, and now they need additional resources to enter world markets.
Additionally, in comparison to some European and Asian countries, Russia has much less bureaucracy, and the path towards the product implementation is much quicker – this is yet another advantage for potential investors.
Who are prospect customers of Rainier AG as STO provider in Russia?
Potential customers are medium and large businesses and perspective startups from completely different business directions and fields. For example, today we are supporting companies from such industries as agriculture, telecommunications, education, restaurant business, mineral resources mining, oil & gas, aerospace engineering, entertainment.
We also actively support fintech companies. GeniePay, one of such companies, is a payment processing startup engaging with both fiat and cryptos (Bitcoin, Ethereum, Litecoin, Bitcoin Cash, DASH, etc.) To date, the company has received the first $500K. The system will work with the help of a new payment terminal and a wallet app, plans also include GeniePay brand debit cards. All technologies will be applied on a completely legal basis. Currently, we are also attracting investors to one junior gold mining company. To date, about $10 mil has been raised, and funding continues.
Rainier AG ecosystem: what are its major advantages? Is it country-specific?
Rainier AG is developing an ecosystem designed to unify fiat money and cryptocurrencies in a single integrated financial instrument. This ecosystem will include 1stX, an international STO platform and package solutions created in cooperation with DiMM, a cryptocurrency platform, and MIGOM, a European banking service. The customers of this service will also be able to invest in our projects.
All these ecosystem products will contribute to the world’s financial infrastructure, make cryptocurrency more available to the general public, simplify investment attraction for various projects and make them more transparent and easier to understand.
What are the requirements for projects to be admitted to STO Exchange?
To place digitized shares on 1stX STO platform, a company must disclose: a package of documents including its audit reporting over the last two years; a scheme of all affiliated firms’ and beneficiaries’ relations; the description of this company’s key team members; a White Paper or an Executive Memorandum with detailed project info; a roadmap and the token data.
Any customer company must also have everything in order when it comes to its website, social media networks, its marketing in general; all of this makes chances for a successful fundraising campaign significantly higher.
1stX auditors scrutinize the information on all customer companies, check investment calculations and research the business of the firm that has applied for listing. Projects with bad potential or negative reputation are likely to drop out.
We also provide consulting services for the companies in the preparation of a package of documents, and together with colleagues from the USA and Europe, we accompany the project in the process of preparing for STO.
What are the performance targets Rainier AG has set for itself in Russia?
Of course, the primary efforts are now to secure our own niche on the Russian market and to tell our potential clients about 1stX. STOs are a new business vector and today only people close to the blockchain world are familiar with them. This is why we are going to work hard to raise the level of our audience awareness.
At this moment, for instance, we are organizing a conference in cooperation with CryptoValley, a Swiss association. It’s good to remind here that we, too, are members of this organization. The event to take place on 28th November in Moscow is themed The Advantages of STO Market In Comparison to Classic Venture Investments.
How does STO fit in the Russian legislation?
So far, in the Russian legal realia, such a concept as Security Token Offering does not exist. The main legal framework allowing the project to enter the STO is the permission of the US Securities and Exchange Commission (SEC) or the European regulators’ permission.
The issue of linking STOs to Russian reality is currently still under development. Moreover, the main attention in the discussions so far is paid more to cryptocurrency. In any case, our company primarily attracts foreign capital by cooperating with the regulators of those countries in which the projects are planned to be located, so there is a reason to believe that there will be no problems with conducting STOs in Russia.