“With interest rates near zero for the better part of a decade and no end in sight, capital has been desperately searching for returns, but has always overlooked one of the largest sectors of the economy, small and medium sized enterprises,” he stated.
“One reason for this is that it’s really difficult to invest $10 billion in a diverse portfolio of corner bakeries! It’s currently much easier for a large investor to rely on reporting and governance standards to which large, public companies are held,” Williamson added.
SMEs as new frontier for idle capital
Williamson argued that blockchain can be deployed to offer SMEs access to the same financial tools that are currently only available to large firms.
“Step one on this journey is to deliver certainty to cap tables and corporate actions, aligning investor interest with the interest of the small business owner,” he asserted.
“While SMEs have historically been the largest driving force in GDP growth and job creation, there has been a long term shift to larger companies over the past decades, partially due to the ability for large companies to access capital markets efficiently.”
“The other half of the equation is bringing certainty to investors, allowing them access to a sector of the economy they have previously been shut out of and realigning broader market incentives to support all of the economy, not just the part that is currently driving returns.” Williamson added.