Pennsylvania's State-Backed VC Firm Is Tokenizing an Investment Fund

Ben Franklin Technology Partners of Southeastern Pennsylvania, one of four regional outposts formed by the Pennsylvania Department of Community and Economic Development in 1982, launched the Global Opportunity Philadelphia Fund, or GO Philly Fund, in February with $15 million committed.

Unlike Ben Franklin, which receives funds from the Commonwealth of Pennsylvania and is restricted to investing in the companies based in the Greater Philadelphia area, GO Philly is planning to raise funds globally while focusing primarily on the Philly area-based companies, Scott Nissenbaum, Ben Franklin's chief investment officer and a managing partner of GO Philly, told CoinDesk.

Working with the California-based token platform Securitize, GO Philly is looking to raise another $35 million by selling GO Philly Fund tokens to accredited investors.

"GO Philly Fund has been a trailblazer, not only in the blockchain space, but also as an impact fund," Securitize CEO and co-founder Carlos Domingo told CoinDesk via a spokesperson.

Built on top of the ethereum blockchain, the GO Philly Token will be available for purchase by accredited investors at $0.50 apiece, in dollars, bitcoin or ether - but the minimum buy-in is $250,000.

The $50 million fund was created in partnership with a publicly traded IT company, EPAM. GO Philly raised more than $15 million pre-launch: with $5 million from Ben Franklin, $5 million from EPAM and the rest from investment firms including Fulton Financial Corporation, SRI Capital and Provco Group.

These investors have already secured their bags of GO Philly tokens, with the first batch being sold on Feb. 7.

GO Philly is expecting to sell 100 million tokens in total, including the portion already sold.

The token holders' money will fund GO Philly's efforts and earn them a profit if the supported startups flourish.

The advantage of the token model, he said, is that, if an investor wants to get out, it's easier to sell a token than a limited partnership in a venture fund, given that GO Philly is going to create a secondary market for such tokens in the future - though the legal structure of that future entity is not yet disclosed.