The idea is that if a startup involves tokens as a form of equity, investors can request that some of those tokens be set aside for them. Then those tokens can 1) be converted to cash without needing to find an acquirer or go public 2) be used to capitalize on negative non-public information about a company without it being insider trading. In addition if the company has a traditional exit the tokens can also be sold, allowing investors to profit twice.
The narrative in the article is that investors are pushing startups hard to incorporate a token pool into companies that have no need for one, in order to take advantage of these benefits. Being able to cash out tokens without an exit based on non-public info drastically reduces the risk and increases the upside. So investors can put money into many more long shot companies.
This seems very bad. It's centralizing tens of billions of dollars in the startup ecosystem around one technical concept that only has utility to the investing class. They can conveniently say it's about community and decentralization, when really it's a crude tool to reduce their investing risk.
If I had to guess, they will end up slowly reinventing the traditional investing system with all of the rules and regulations that come with it. But that will take years, and a lot of the investor class will benefit from low risk / high reward in the process. At least the smart ones will.
There is no productive innovation for society here. Only a new way for the rich to play with numbers until they get even richer.