Transforming Private Companies into Public Tokens: The Hecto Approach

Hecto is trailblazing a revolutionary approach in finance by creating the world’s first tokenized pre-IPO index. This index comprises seven highly valued private companies, allowing investors unprecedented access and transparency to these otherwise inaccessible markets. CEO Ultan Miller discusses the mechanics of this innovative platform, addressing potential market risks and future expectations.

Key Takeaways

Hecto has developed a tokenized pre-IPO index on the Canton blockchain, linking to seven significant private companies.
The “Hectocorn” term refers to private firms valued over $100 billion, which represent a new wave of innovation.
The platform aims to provide institutional-grade controls and transparency to the tokenized investment landscape.
Hecto does not foresee a significant AI or tech bubble bursting in the near term, viewing current market dynamics as a structural shift rather than speculative excess.
The index allows for dynamic composition changes, ensuring continued value and liquidity for token holders.

Transforming Private Companies into Public Tokens - 1

Hecto’s Innovative Approach to Pre-IPO Investing

For many years, the most valuable tech companies have remained out of reach for retail investors. Typically, these investors gain access only after a company goes public, while institutional players quietly trade in private markets, leaving valuations to a select few insiders. Ultan Miller believes those days are numbered.

As the CEO of Hecto and a managing partner at the FCA-regulated digital asset advisory firm Saxon, Miller operates at the intersection of venture capital, crypto infrastructure, and institutional finance. With a background in advising over $300 million in blockchain and fintech deals and investing millions in early-stage technology, he is now set on a mission to transform how mega-cap companies are valued and owned.

Hecto is launching a groundbreaking product known as the world's first tokenized pre-IPO index, built on the Canton blockchain, which is backed by major Wall Street players. This index groups exposure to seven of the highest-valued private companies globally—OpenAI, SpaceX, ByteDance, xAI, Stripe, Tether, and Anthropic—into a single on-chain token.

According to Miller, these companies are referred to as “Hectocorns,” defining an era marked by AI-driven, capital-intensive innovation, with valuations exceeding $100 billion.

The concept is simple yet revolutionary: while public markets have historically told a generational story, today’s important companies often remain private long before they go public. Tokenization, Miller asserts, fills the gap in accessibility.

Understanding Token Structure and Mechanism

How does one create a token for seven Hectocorns?

The token offers exposure to a diverse group of seven late-stage private companies, with set weights and clear valuation methods. Investors generate the token by depositing capital into a specific vault, whereupon the protocol issues a token reflecting the performance of the entire basket. Utilizing Canton ensures privacy, permissioning, and regulatory compliance—features not found in conventional public blockchains.

Operationally, the token acts as a programmable wrapper around a diversified pre-IPO investment, secured by the Canton ledger. This allows investors to engage with multiple high-growth companies via a single token while meeting the legal and operational standards institutional investors expect.

Addressing Market Stability and Predictions

Is your team concerned about a potential AI/tech bubble in 2026?

Miller's belief is that there isn’t an imminent AI or tech bubble poised to burst by 2026. Instead, this market cycle is seen as a fundamental shift driven by tangible revenue growth, productivity enhancements, and enduring institutional adoption of AI and other advanced technologies. Volatility may occur, but the fundamentals differ from previous bubbles built on speculation.

A potential IPO of SpaceX could also provide crucial liquidity to late-stage private markets, enhancing price discovery and setting benchmarks for public companies, which would ultimately benefit investors.

On a broader level, the team's outlook is optimistic, anticipating favorable conditions driven by liquidity and supportive monetary policies that typically benefit riskier, long-term investments.

Flexibility in Token Composition

Can new companies be integrated into the index?

Yes, the index maintains a dynamic yet rules-based and transparent structure. If a company, like SpaceX, exits the index after a liquidity event, the proceeds are utilized to buy back index tokens from the market, thereby enhancing the value for the remaining holders. Token holders have governance rights, allowing them to vote on any changes to the index's composition.

Evaluating Concerns about Specific Companies

Regarding xAI: Critics highlight risks linked to its substantial investment in GPUs, which may not retain value. Is this a valid concern?

From Hecto’s viewpoint, the dynamics at a single company level are not the primary focus. The Hecto index is structured as a passive investment tool, designed to provide broad exposure to advanced AI and tech companies, minimizing risk tied to individual operational decisions.

Investments in computing power are viewed not as liabilities but as necessary capital for AI development. Hecto's diversified token approach mitigates risks tied to company-specific issues, enabling participants to benefit from the upsides of technological advancements while reducing individual risks.

Future Outlook for the Tokenized Index

What are the expectations for this token in 2026?

Expectations for 2026 center around macroeconomic factors rather than immediate narratives. The team believes markets will react more to global liquidity conditions and U.S. Federal Reserve policies rather than isolated sector fears. Factors supporting a favorable environment for high-quality assets—like easing financial conditions and improved liquidity—suggest that a diversified Hectocorn index token will perform well.

Late-stage tech and AI firms generally thrive when capital becomes more accessible. The construct of an index reduces volatility, making 2026 a potentially advantageous period for this passive, quality-filtered technology investment, assuming positive global liquidity trends continue.