Meet the Blockchain VC

Transcript

hello everyone i'm very happy to start our online seminar meet the blockchain we see we have been able to bring in some very interesting people and interesting projects we have some angel investing we have some calling investors we have some established investors which came from yeah big corporates and we have also mixed from these different regions angels from tel aviv lavalier from florida usa and blockchain valley ventures

from switzerland i'm very happy that we are able to bring in different aspects and different people to our um online event and i think it's important that crypto valley association which understands itself also as a as a player which is independent from geographical location that will bring in all these different people we're very happy um that they share some interesting learnings with us i'd like to start and introduce agathia namiri from i angels from tel aviv a very interesting

company and i think also very interesting if we look at the team of your company out of the 12 team members we have on your website you have nine female founders so this is a very interesting and quite unique aspect maybe just give us a little intro how was this possible that you're so in your company sure sure happy to do that so i angels uh was founded uh seven years ago uh by two female founders shelley hodmoyal who comes from a financial background and was an investment banker for many years both in new york and israel and mo asia

who comes from a technological background and went to the 8200 intelligence unit in the israeli army and then worked at the companies like ibm and sap and amdocs and they actually met in new york during maul's mba and shelley was working there at the time and they had this vision of you know knowing a lot of israeli entrepreneurs uh and their struggle in raising capital and the time that they spend on it and so on and and on the other hand knowing you know the investment side and the investor side and the corporate side of things uh to kind of bridge the gap uh and help founders uh raise money from uh from angel investors and even at later

stages uh more in a more structured way and on the other hand uh allow investors from all over the world uh to participate in what is going on in the israeli tech ecosystem which is uh which is very uh exciting and very dynamic and usually if uh if you don't have feet on the ground and you're not a professional vc and and you want to participate it's pretty hard uh to kind of figure out uh what the good deals are and what the good companies are and uh and uh get in to the most uh sought after uh financing rounds so this this was kind of the idea and uh i mean there wasn't an agenda of

uh of hiring only women uh but uh it came to be i'm i've i'm a partner at i angels i joined almost five years ago uh the most of the people that i hired are women not only we're not prejudiced or anything um but it's really it's really you know not not a specific agenda but we do we do like to promote women and we think it's important and we uh we want to empower and we want to set uh you know precedence and and be an example uh of a successful operation that is led by women and and you know dominated by women yes so i mean you have i angels and i

saw also another company 21 m capital which is right hardly focused on on blockchain technology so please explain us why do you invest in blockchain technology um biggest potential also sure um so so as i mentioned angels was founded seven years ago and and we invest primarily in israeli israeli tech within i angels um but the one thing that uh that leads us throughout our investments and throughout uh since we were founded was that we like to invest in innovations that are or industries that are early on on the innovation curve um blue oceans new innovation new disruption to to markets new markets

that are being existed being created uh and we came across uh blockchain technology pretty early on around 2017 2014 we made an investment in a company called simplex which uh which does fraud prevention for uh crypto and blockchain uh and also in etoro and that's how we became familiar with uh with the industry with blockchain with the technology and we basically fell in love i mean with uh with the ideology behind it with how disruptive it is uh with the potential of it uh in in various um industries not just the financial industry and so uh and so we started investing pretty early

on in 2016. um and then we established 21m which is dedicated as you mentioned to uh to blockchain investment and we have a an actively managed fund juno uh that does uh the same um what we like about blockchain and what we think uh you know the potential the blockchain is an enabling technology so uh so we need to talk about it as a technology rather than an industry in it of its own because it's applicable to many different industries and and i think that's what's interesting about it um if you look at you know the the lowest hanging fruits or which is uh you know the fintech industry or the financial industry

um uh it has massive potential to disrupt to uh to change people's lives uh you know across the board but primarily everything to do with act access to financial uh cap to capital into financial markets to people that are uh that currently don't have access uh serving the underbanked and the unbanked um you know inclusion in that respect so it's um it has massive potential in in those areas but but also in different areas in everything to do with governance uh with how decisions are being uh made within organizations or within communities um so it's you know it's endless uh

from you know from where i'm sitting i think it's endless and we just see the tip of the iceberg yeah then now my question if you invest in this blockchain projects to invest in new protocols in infrastructure projects or also in applications so up until now we we invested primarily in in protocols new uh consensus protocols or innovative consensus protocols like companies like space mesh uh and uh and others um we do we do also invest in infrastructure or anything that has to do with uh um you know enabling uh this technology to

actually be adopted so we didn't we made a few investments in uh uh in those types of things liquidity uh we invested in in a cyber security company that uh that provides a hyper secure solution for um for custody company called gka um and so so a lot of things that still need to to be in place or to be developed for this to actually take off and for applications to be um to be adopted and and applicable and used um but we as we advance you know it's been it's been a few years since we've started investing and as time goes by we see more and more value

uh potential value in in applications so we see the entire world of of uh defy which is being uh which is now you know taking advantage of everything that has been built so far uh these are definitely applications um uh you know exchanges and decentralized exchanges these are just kind of initial applications of this technology so primarily going back to your question primarily blockchain protocols and infrastructure but just it's a matter of time until we invest in in applications it just needs to be the right time for it and do you invest in equity or also do

you also invest in tokens we invest in both we invest in both and we and we also invest in uh in hybrid models uh so for instance as i mentioned space mesh was a hybrid model where we invested in the equity but at the end of the day uh they're developing a decentralized uh protocol um and by the time that they launched the protocol the the uh the value is already in the in the network and not in the equity of the company so it was a hybrid model um we tend to invest in equity and companies that uh like gkh for instance companies that are doing infrastructure um

or uh or enabling technologies where the token would not make sense and basically when investing in tokens we would need to see a very strong uh token economics or or or a model that justifies um a token may you tell us how far uh uh how much you have invested so far uh we invested tens of uh millions of dollars already in in blockchains blockchain technologies and other enabling technologies how are typically or who is typically your investor is it a private person is it an institution most of our investors are uh are private investors or semi-institutional

investors family offices uh high net worth individuals we we only um service accredited investors uh and basically the vision for us when we just started investing given the fact that uh that we were we already had i angels uh which is an investment platform and the vc uh we knew are the type of investors that are looking for for our added value in this and most of them um need we needed to bridge the gap for them between this new world uh that is being developed and what they you know are used to and which you know they they invest in vc with us but that was already you know a jump from what their comfort

zone is so uh so we needed that to be very um very uh focused on how we we're gonna bring them to uh to this world and how we do the asset allocation uh in this in this asset class uh or between our vc and this asset class uh in a way that uh that suits their appetite and their uh and their risk appetite and so on so how big is your typical ticket size if you invest into a company or a project it's it really depends it really depends if it's an equity investment and equity investments we usually do in israeli companies uh where we can sit on the board and have uh have uh

you know rights as a as a as a shareholder uh so it varies and it also varies um from where we invest we have various pockets uh we have our i angels platform uh which is an online investment platform where investors can pick and choose their own deals we have 21m um which is a similar platform that focuses on blockchain and we have juno capital which is an actively managed fund uh so it depends from which pocket we're investing and and the type of the company and the type of the deal we would feel more comfortable um um making significant equity investments in companies that are based

in israel uh with with token investments it really depends if it's already uh liquid or if it's uh expected to be liquid uh when we just invested it was all or most of it was icos um with a lot of uh risk on it in its structure um and so we take into consideration all of these factors so do you my another question is do you also act as a lead investor are you mostly lead investor or do you prefer co-investing um we're not uh it's not very important for us

to to lead or we i mean if the company already has a lead we're happy to to join uh if we met the company at the time that they didn't have the lead and we're bullish about it we're happy to lead and help them close the round so we do both so my question another question how do startup usually find you i mean do you work to get approached i've seen on your website you have you have a section where startups can approach you or do you prospect yourself we do both um we have on our platform uh startups can can submit their application and they

uh go through our process if they do so and we meet them and talk to them if it's relevant and they kind of um go within our within our process uh but honestly speaking most of uh most of the deals that we've done uh so far and the seven years of i angels were were deals that we ran after so uh companies that we identified through top-down analysis or bottom-up analysis and companies that we you know we got introduced to the founders or we met the founders and thought they were interesting uh or we did research on an industry and decided that we you know want to want to invest in the industry and so we mapped out all of the relevant startups

in the industry and kind of reached out and built relationship even before they were raising rounds um um so yeah so both but mostly mostly outbound thank you interesting can you tell us something about your due diligence process sure um we have a very structured and kind of rigorous let's say the diligence process very similar to uh to our vc investments in eye angels it's not very different when you look at blockchain we obviously uh meet the team numerous times we do our

own market research we look at the tech we consult with with tech experts um if needed uh we do reference uh reference checks back back door reference checks uh we have um we believe that team is one of the most important things uh obviously there needs to be a market and there needs to be a a product that makes sense but the team is probably one of the most important things when you invest so we have developed a leadership assessment questionnaire let's call it with a business psychologist in new york that helps us kind of identify or figure out

um what kind of qualities there are around the founding team uh and how they um you know how they compensate for each other's uh maybe deficiencies or how they uh they uh help each other and that's very helpful it's not like a test but it gives us uh insight as to how they might work together and where they might be challenged in the future um and then you know if it's uh if it's if it's a blockchain investment or a token investment then you have to you have to look at uh what you're investing in whether it's equity then you have to make sure that the company you know would have equity value at the end generate revenues have a business model and so on or if it's a token

then you have to make sure that uh the company company actually needs a token because there was uh quite of the hype back in 2017 where a lot of companies issued token but there was no real justification for it uh so figuring out that there is a justification for the token and that there is some model behind uh the economics of the of the token and uh that it makes sense uh-huh okay and now you told a lot about israel and i mean that you were closed there now my i asked myself do you also invest abroad do you invest in europe did you also already make some investments even here in switzerland um so we um

in i angels we invest in israel uh when we started our our branch uh 21m capital that invests in blockchain we decided to expand the region for our investment or the mandate and so in blockchain we invest outside of israel as well equity investment would be investments would be mostly in israel but token investments uh can be also outside of israel uh we invested over the years uh all over the world in korea in in israel in the us in uh in uh switzerland in various places around the world yeah

so tell us a bit i mean we're running out of time so i go a bit quicker but i wanted to ask you maybe give me some some some some key elements what are you looking for if you if you if you choose a team or a company you invest in team wise but also product wise what what's what what's your focusing well team wise i think it's like in any startup so i won't i don't have to uh you know say too much about that you look for strong teams that get along well together that compensate for one another uh and that have uh proven execution capabilities in terms of product we look for we look for a technological moat uh and

innovation in a market that is ripe for innovation and um and that uh you know that can easily or not easily but be adopted uh in in a relevant time frame can you show a share a story or maybe two stories the best investments or the baddest investments and maybe some findings some learnings you've got out of it well best investments you know most of them are still they still have uh to prove uh and so proof is in the pudding so we'll wait with uh with that i can

i can share that one of our earliest bets um one of our earliest investments was into binance which has proven to be quite quite a good quite a good investment over the years and that goes in into what i was saying before very strong team execution uh you know impeccable almost um very innovative in a market that was ripe for innovation with a product that was uh uh that was uh easy to use used for the consumer and so that's how they uh they managed to to become the biggest and the best uh in what they do

um so definitely uh definitely one of my my strongest convictions from from uh quite early on uh asked about investments you know um you know i i assume everybody had some some bad investments i can't really you know talk about one specific one but um you know i can say that when uh when you have um yeah when when the founders um don't understand the market well enough um even if they're g and all of the people that we invested in are genius geniuses uh but sometimes it's not

enough and you need to also understand the market and where it's going and the dynamics um and we you know we made investments that were in uh in brilliant teams that were building something that was too early for the market for instance uh and they would have they would have needed a lot of capital before it actually became relevant and uh and that that was hard uh in uh in you know in in the market uh uh atmosphere that uh that came about in 2018 and 2019.

thank you agatha that was really great i think you had a very enthusiastic way of explaining what you're doing and it was very interesting and we see i mean really deep down i think i mean if you mentioned investments also as ito or finance and so on i think you're on the lucky side and uh oh congratulations maybe my last question to you do you do you know crypto valley here in zug in switzerland have you ever been i haven't i haven't been yet um uh i we had a a a while back two uh two of my analysts were uh were from zurich uh so they they know you guys

very well uh and we've been in touch for uh for several years i don't know if you know this but we've been in touch for several years and we um you know what way back used to have kind of monthly calls to get updated and uh share share news and deal flow and what we're seeing and uh so yeah we know we know you guys from afar i know you guys from afar so let's try to establish this connection i mean it would love to be here and we maybe would get you later back in into the panel now i would like uh to introduce ibrahim to us from his company lavalier capital management also very interesting

personality as i have seen in the also on the web i mean they're already in the crypto and blockchain market since various years with also another company i remember new mine which is a leader in in blockchain mining infrastructure and um i've seen that your lavalier capital was voted uh now for several times as one of the top performing crypto hedge fund congratulations i think you had also some interesting opinions now on the rise of decentralized exchanges

and on d5 and i hope we will learn something from you also in this respect so maybe introduce yourself ibrahim and let us also know why do you invest in blockchain technology sure hi martin uh thank you i mean thank you to everyone that's tuned in so um i'll just take you away back i started out on crypto back in 2015 uh i was arbitrage trading between exchanges back then the opportunity uh was really good to to make a lot of money very quickly i mean arbitrage isn't the same as it used to be but there's still some opportunity there and then in 2016 i set up new mine which you've mentioned and new mine builds large-scale crypto mining operations predominantly throughout north america

but we do have operations in europe as well and a small amount in asia and um through the people i met through the mining company we ended up setting up lavalier capital which has been around now for two and a half years um and you know i view the the blockchain spaces where the internet was 20 years ago tons of opportunity but there's also a lot of difficulties with navigating it there's a lot of risks and you know a lot of the companies that are around now are not going to be around uh in the next five ten years so a lot of what we do is kind of uh really focusing on the companies that provide value we are you know very slightly different to agree in that agoner i guess is more long term whether investments are a firm we're kind of more of an active trading

firm so a lot of what we invest in it are they talk in fact we can invest in venture capital style but all of our investments today have been in tokens we're very liquid and that we can move all of our funds into cash overnight should we wish um so yeah that's kind of that's kind of a bit about me but i do feel that um there's tons of opportunity in this space um we're very lucky to have it you know in our lifetimes i was unfortunately i missed the uh the internet boom but uh we have blockchain uh instead at least yeah interesting so now you you told your invest only in tokens and not in equity i understand this right now my other question would be how do you invest also in new protocols or is it more like also in established

protocols to invest in blockchain infrastructure also in in in in application providers yeah so uh we can't invest in kind of ventures venture capital star investments for equity but we prefer tokens so we do invest in the very early stages you know some of the protocols that we invested in um you know are very much in their infancy infancy and we um we're kind of quite private with our investments as well you know some of the firms were disclosed they've invested in next company and uh you know this company and this one but we kind of like to stay private and we feel that uh that has worked out for us uh pretty good i mean as you mentioned we were top performing crypto fund on multiple occasions and i feel part of that you know by

not disclosing our investment positions it kind of protects our secret source if you like so uh in terms of the the biggest potential that there is in in the market of blockchain of course it's you know predominantly in financial market in fact thinking about it blockchain hasn't really done much outside of the financial markets today i know there's people working on genetics and um you know courier tracking of inventory and whatnot but really where uh blockchain has the biggest potential uh you know which space has the potential to revolutionize it's very much the financial sector and this year the end of this year and a lot of next year it's been great i believe because um we're seeing a lot of institutional players joining the space and it's very different to 2017 than that

2017 was a lot of retail money and right now we're seeing a lot of institutional money which is bound to be good for the long-term health of this space so um i'm hoping that over the coming years we're going to see more blockchain applications but it's still going to be predominantly focused on the financial sector [Music] and can you also reveal us to us how big your portfolio or your fund is how much capital you've invested sure so we don't disclose our cumulative aum but we have uh invested well into the millions our average investment size can be you know anything 100 000 or or far more than that you know we had a recent investment which was uh 500 000 out you know we're

typically in the six-figure range in terms of our investments i have seen that your website is only accessible with you know where you have to be registered so i understand you're right it's also only for registered investors yeah so we're only open to accredited investors and the reason we don't uh advertise on our website is we're running uh in the regulatory infrastructure that we've set ourselves under we can't mass market so hence why everything is very private and we need to make sure that people that we're speaking to our accredited investors otherwise we can land ourselves in trouble for you know advertising to the general public so who are typically your investors you

mentioned before now that you're did you see an increase in institutional money are you are you managing funds from family office from private individuals from institutions yeah predominantly from high net worth people um and then small amounts from some institutional players that we've seen interest from so you know three years ago these institutional players were hardly present but now we're definitely seeing a spike in interest from these institutional players so it's definitely a good indicator for you know the long-term health of this space but right now i would say a predominantly high net worth individuals are our investors so probably i mean before i ask

the question how many startups did you already invest is it startups are investing into or is it more established coins it's coins that were invested into but a lot of these coins are of startups so uh not all of them but a lot of them are so in terms of how many we've invested in um you know a few dozen probably we're not out we're not out there taking people's money and allocating it to the top 100 coins by market cap we're very selective in what we choose you know a lot of these coins are worthless they're not going to be around in several years time so we have to have a very extensive due diligence process and we also need to we also like to ensure that the tokens that we're taking positions in we can liquidate

and move out of cash should we want to um so you know again we're we're kind of very different to what aguero was talking about in terms of what they're doing so how do you find these tokens you're investing in which you buy are you also our people approaching you or are you doing your due diligence and searching for them yeah we do we do get approached a fair bit uh by people but uh we typically are the ones that find the projects um and a lot of those investments they don't even know that it's our firm that's holding the positions in their tokens so uh it's very you know we're we're not uh we're very

private in what and what we do so i think that as i mentioned before that's worked well for us so yeah there are there are tokens out there and projects that we haven't invested in but they don't know that it's our firm that's taking that position so how how big are the ticket sizes you're investing in if you choose a token yeah sure so typically uh in the six figures that we like to invest um some of these tokens by six figures i mean a hundred thousand uh over a hundred thousand under a million uh you know some of these tokens even if we wanted to do a bigger investment and we can't because there isn't that liquidity anyway uh you know if you're looking at a market cap coin a coin of five six million market cap there's only so much that you can take

there's only you know such a large position you can take before moving the market you know unless you're going otc so i would say that's kind of where we're sitting for our average ticker size so what require what what's the requirement for you i mean let's go maybe to look a bit deeper into the due diligence what what requirement the token has to me before you invest you mentioned before you have to be able to liquidate it does he have to be on an exchange or what's what's what's what's what's the yeah usually we like to get tokens that you know tradable a lot of exchanges um and then a lot of it comes down to the team you know a lot of investing in general if you look at most investors the first thing they look at is the team you know what the credentials of the team

that's why if you're a young entrepreneur and you don't have a track record and be quite difficult to raise that's the obstacle that you have to try and work towards overcoming you know by having your first successful company so a lot of what we focus on is kind of the team the market liquidity the amount of exchanges that we can purchase the coins on that the tokenomics um that that whether these tokens have any true value most tokens don't that's something that we really focus on the the tokenamic model is very very important for us for our investments so i think this lead me to another question that now you mentioned the true value i think that's a very interesting term now in tokens how do you define this true value or where where do you see give us

some examples maybe from tokens where you think they have a true value yeah sure so you know one of my favorite tokens personally is ethereum and i really like ethereum because you can actually you know use erc20 tokens to build stuff on a lot of these decentralized finance applications are being built on ethereum so ethereum is something that has a lot of uh you know a lot of value um the tokens where i don't like i don't like investment in them i don't like investing in them are ones where you know it's essentially a pump and dump you know it's the founders trying to sell their coins and make loads of cash and screwing over the investors and unfortunately we saw a lot of that happening with the ico hype of 2017 and it really hurt the market there are

a lot of unethical players and i think a lot of people are now far more cautious with what they're putting their money into in the crypto world and that level of caution is good it needs to continue so you know a lot of it comes down to the the ethics of the founders you know other founders really interested in building a token and a product that is uh worthwhile and that's going to have true value are they simply looking to you know make some quick cash and um you know usually it's a lot of these uh founders are looking to make some quick money but you know sometimes you do find these gems where they're genuinely invested in their product and the long-term applications of it i think i have already asked you the question but i want to dig a bit

deeper how do you find now the right coins for you are you also approached by promoters of coins or by sponsors of coins are you doing or are you just before you mentioned many uh projects or spawn so they don't even know that you're investing in in in your token explain us a bit more how uh also let's say if we would have a project which thinks or which is convinced about if how can they approach it do they have any chances if they approach you or is it just to come completely you know from your side you're you're looking for these uh tokens yeah absolutely so if there's uh if there's a project that they're

raising um then we will definitely consider it um if you if they email us at info lavaliercapital.com what i'm trying what i was trying to say there is that typically when we're approached by a project the calibre of that project is not necessarily as good as projects that we approach so um you know generally speaking our investments have been imported in products that we found but that does not mean that we're not open to exploring investment opportunities when someone reaches out to us i mean the crypto space is small and you know always encourage uh you know people to reach out you know even if we don't end up investing then maybe i can connect to someone that will or someone that could help you launch your product you know it's we're all in it it's all in our best interest to work

together to help the adoption and the maturation of this space i think it's clear quite interesting and also in line with what agatha told us just before that also her most promising projects are the ones they were looking for and not and not uh and not projects which approached them directly and i think that's an interesting learning also for investing also potential entrepreneurs who listen to this so they have really to be uh to get on the map so that they are also flying from the front from from the investors now another question i mean region wise are you agnostic are you very open do you invest in projects from

all over the world or do you have certain preferences yeah so we we don't have a preference for us it's more about the quality of the project as opposed to the location we've messed with projects that are all over the world um we don't we don't have a particular focus for us this is a very decentralized distributed technology with developers from all over the world and we like to have the same ethos with our investments maybe also this question which i asked also already before what do you want to see you also responded it up to a certain extent but i want to take a bit deeper what do you want to see

in a company's product and what do you want to see in a company's team i mean if you even if you look at the if you look at the token investment also do you consider the team of being of the same importance as if you invest into equity what do you want to see there how do you assess between team product and what are the most important qualifications they need to meet yeah so one of the things that i see unfortunately a lot of teams don't spend enough time on the tokenomics of their project and this is the this is the bit that you should not rush at all um because a lot of it is going to determine whether you you hit the what you're trying to raise or not um so i would always recommend kind of looking at the economics of

popular competitors uh considering you know taking input from investors you can you can easily change to economics giving feedback so once you go out there if you're trying to raise as a project don't go out there and hit up every single investor at once you know approach a small amount get feedback build on that and then um you know reach out to more people because you only get one shot with a lot of these guys so your first shot has to be your best shot so if you're trying to raise have a very methodological approach of you know have a list of here here are the 200 investors in the space i'm going to approach 10 i'm going to get that feedback build on that and you know then approach 20 etc interesting thank you maybe also for you um

ibrahim tell us what is your best project and what is your worst investment or best investment worst investment yeah so um i can't we can't disclose so because of regulatory restrictions we can't disclose individual investments but um uh you know we've had more good investments than we have had bad investments so what i can say so that's why uh we've kind of had those great returns last year we did um something like 80 netflix so far this year as of the end of last month we've done around 300 net of fees um but you know what i do really love about being a blockchain investor is kind of how innovative this space is and uh you know it moves so fast so one year in

the crypto world can be uh like 10 years in the traditional sector so it's definitely a very exciting sector to be a part of and i don't think a lot of us foresaw uh you know obviously no one for saw this pandemic was gonna happen but this this the coronavirus you know one of the positive things come out of it is that it caused a lot of maturation in the digital asset world and it would have maybe taken three or four years to get to where we are now so you know this is one of the silver linings that's definitely come out of this pandemic that's interesting and this i would also like by the way then from the other speakers from leo and also from agata what she thinks about the coronavirus the

impact on blockchain investing maybe we have a few minutes at the end of the presentation and we can discuss also this question which obviously is uh is an important question especially at the current times maybe also for you ibrahim last question how do you know or perceive crypto valley do you already have some some some some connections with it yeah i actually have a few friends in that are part of the association and uh i know you guys are doing a lot for the crypto world in switzerland and not just that but also internationally so um and i've also been to the crypto valley so it's good to it's important to have these associations because a lot of

uh a lot of the development new technology happens through connections and you know you guys are definitely playing hard enough thank you ibrahim i think it was very interesting what we've learned from you and also it's interesting even though we almost asked the same question to agatha and to you i mean we see you're in the different field i think different aspects and i had some good learnings i wish you all the best also to do and you found also in the future now um leo from blockchain valley ventures is also with us um we are door-to-door almost so it's a it's it's it's it's good it's

good to have you here on this on our meeting maybe please explain us and i would beat where blockchain value venture how are you closer to to to agatha or to ibrahim and explain us with what you're doing and then my question please tell me why you invest in blockchain technology yeah excellent thanks very much martin and a pleasure to be here with everyone today so thanks for taking the time um yeah by way of background i mean bvv blockchain valley ventures what we do is is very much aligned more along with agatha and the i angels approach with the exception that we are a pure focused blockchain group uh i would say so we are um fully

dedicated to the technology and the opportunities that this presents uh and i think the reason we do this um is basically because uh we're so excited about it right there's so much happening there's so much to offer and really we took the decision two and a half years ago when we were setting up bbv to basically dedicate ourselves fully to the opportunities that this brings and really within that though um have really focused and segmented our niche within the industry so unlike ibrahim who's more on the token investment side where we're very excited that's happening and i think uh bitcoin prices uh a fantastic development for everyone and gets people excited about this space again but we are ourselves not touching tokens and secondary market activities where pure private market activity

um and focused on early stage venture capital and later stage transactions in the space and that's really our focus and basically you know the reason why we got into this space was i think you know as you know martin and many people here from the crypto valley association i think one of the things that we have strongest here in switzerland is obviously the financial center and the ecosystem and a lot of the players who are you know instrumental to the adoption of this technology whether we like it or not happen to be situated around this vicinity in this valley and i think that was really the main motivation to come from the the traditional swiss financial industry as many of my partners have done to really come in and be fully dedicated to bridging

uh the the traditional and emerging financial world so to speak and i think that's really our main focus uh on how we do that yeah um i think agatha and abraham told us before that still i mean fintech is probably the lowest hanging fruit in blockchain investing and maybe tell us also what is your opinion on the biggest potential for blockchain blockchain investments yeah look and i think it's a shared view uh so i think we're already drinking the kool-aid on this call so to speak um more than 50 of the companies we track are fintech and this is really the focus one i think what we separate out is is really horizon two opportunities of fintech so not necessarily a new digital bank uh

which is innovating and streamlining operational processes but really what are the banks or infrastructure of the future uh when you don't need a bank right and i think the companies who are working on building that infrastructure and technology is really the focus of where we see you know the venture capital investments are longer term um higher risk investments in the space uh uh you know justify the time that we spend doing and beyond that i would say i mean at the end of the day it comes down to data uh information security privacy uh all relates to to information at some point and how we manage it and i think uh for things which are not directly related to to fintech financial services or crypto it's really about how people are managing securing information do you invest in new protocols also in

blockchain infrastructure projects in applications you told us you're focusing on your blockchain now where where do you situate yourself within this space yeah so look i mean we're agnostic uh in theory um in practice i'll tell you uh being a more plain vanilla vc in the blockchain space comes with with certain strings and expectations of how things work and i mean it's worth noting that the industry is still very early stage in terms of the types of companies the level of revenues that they're achieving and the type of business models that they're operating and i think with that as a venture capital investor and the kind of more standard uh generic threshold you have becomes very difficult to look at things

you know differently in this space with the mandate that we have so you know to be very honest we look at everything we have done 9 out of 10 investments into business applications and i think that's really where we feel more comfortable and more able to to really stand behind i think what is that future horizon 2 opportunities of financial services for example and identify those those pockets of opportunity thank you can you tell us also how the size of your board for you and and and how much cap people have you've invested yeah so we've done uh ten investments uh several of which

um we've we've doubled down on uh so we've deployed just over five million into the early stage space so typical ticket sizes are between 250 to 500k we're actually in the process of raising our second fund to continue doubling down on on the winners so to speak and get to the next level as the industry is maturing but we're very much focusing on initially the seed series a opportunities and now moving to the series a b opportunities over the next two three years perfect and do you also do you always act as lead investor or also or are you also co-investing yeah so this is an important topic for

us i mean we are technically a co-investment co-investment fund buyer by choice right so we we typically always insist on having co-investors uh that doesn't mean that we we won't lead and obviously um have done i think most of our transactions we either took a lead or co-lead role so we're very open for this uh but obviously we like to to be in the game together with with partners who are able to provide uh typically what is geographic diversity as well as strategic value-add so i mean even here in switzerland one of our investments is algotrader which is a swiss fintech business and portfolio company of credit suisse venture funds so these are the types of deals that we end up uh liking and really coming together with some of the strategics from the

industry and bringing them into the let's say the bad world of digital assets in blockchain and also here for you how is it do you look for startups or do startups approach you and you invest into them how is your process and your preference preference here yeah look i mean it's it's a very open topic right it's a bvv we are a venture fund and we also do m a and transaction advisory in the space so we are our whole usp is that we know end to end we track the industry all the seed stage to late stage companies and our whole idea is that we are deal makers and the kind of centerpiece of this ecosystem

as a financial partner and i think bringing that together it's important that we know basically all of the operators from the early stage space all the way up to the later stage so our outreach process is very proactive we spend a lot of time engaging with the ecosystem around us we use uh and the support of data information providers um companies who track uh track this professionally as well so uh we track up to ten thousand companies globally through the tools that we have and uh it is definitely a combination of personal network of course on on most of the deals we've done have we've been invited to to co-invest with them uh but certainly not out of scope or out of opportunity that people approach us and i think it's

um it's more about knowing what's going on around you and whether it's an investment today or in two years that's been the case as well over the last two and a half years we certainly like to be involved and aware of what everyone is up to in this ecosystem and also for you do you have some some some preferences regarding regions your investor are you all over the world yeah so we actually opened up our singapore office so most of my time now i spend in singapore happen to be back in switzerland now for the ski season so to speak but normally our focus really is on the european asia connection i think you know the route between switzerland as the crypto valley and the financial center as well as singapore doing many of the

similar things in asia let's say excluding china i think you have two dominant hubs which present a great opportunity to bridge uh many aspects of this ecosystem which i think is unique which is the you know the financial ecosystem as well as many of the more um speculative um players and participants who who are part of this for the crypto upside opportunities and you know these are all relevant parts of the industry and we certainly like to engage with and be connected to everyone it's very interesting and that's what we try here also to do also today and i think that's what how we see us as cva really try to connect people without with just the personal intention to move the space forward and not just promoting

one company but promote different companies and uh and also different regions now please also let me know a bit what are you looking if you look at at the company you want to invest the team the product how do you assess this yeah look i think i mean we've already talked about the team and i think it's obviously a fundamental aspect of it uh but for me really what's the core differentiator is that going back to this topic of horizon 2 opportunities so it's more not something that we might see in the next 12 months as a serious development but really an evolution which we think is inevitable so moving away from uh large infrastructures servicing many customers through centralized means but

really moving into you know what does the world look like when people are able to you know in a structured and trusted way lend money to each other rather than going through a an intermediary and this is really where we see the opportunities and i think the d5 space is many things um you know i'm very critical of what's happening on that front as well but i think the underlying momentum behind it which is the enablement and facilitation of of credits amongst people and peers i mean this is a positive development and as that becomes more structured and matured and we certainly expect there to be you know two or three key winners that emerge from that as it did with uh let's say the rise of bitcoin itself and the way that exchanges such as finance as ibrahim

mentioned i have done oh sorry agar mentioned have done very well and we think that there are pockets of opportunity within that underlying momentum shift as well i have an interesting question also which i've received from the public and the question was do you how do you consider intellectual property positions of a project when they say deciding to make an investment maybe agatha you could afterwards also quickly respond directly to this question after uh yeah yeah look i mean i p um as i've learned the more time i spend in this uh in the early stage space and community i think at the end of the day these are technology businesses and

aside from the software and the code that's been uh developed to run applications you know what are the real value and assets of a business and you know we're going through through several exits and discussions around this at the moment and and you see very clearly uh the importance of not only having ip but having effectively protected that ip uh and look this looks very different um depending on what part of the the chain you're in so to speak if you're a blockchain protocol infrastructure it's obviously very different from a enterprise software front-end application that runs a blockchain on the backend for for security purposes and so to speak so i think uh happy to follow up with that person and talk more about this but uh at the end of the day ip is is one of

the most if not the most valuable asset in a software business and that remains equally relevant in the blockchain space agata what do you mean to this if they may ask um well i agree with leora that um that it you know that it's very important and when you asked earlier what we're looking looking for and companies i i one of the things i said is that there needs to be a technological moat or there needs to be significant innovation that is hard to to imitate but it's very different um with you know with an equity company that is doing something in the infrastructure the enabling technologies

like custody for instance or cyber versus an open source [Music] protocol decentralized protocol obviously a decentralized protocol that wants developers to come and develop on top of it and be part of the community and so on and so forth uh does not really have uh protected ip in terms of uh in terms of patents and so on so it it it differs from one uh one type of investment to to to another to the other um there are companies that need to be ip protected especially enterprise software companies sas businesses uh that sell into uh into company into

larger companies or as their service um these would usually be equity investments uh token investment they see less less of uh less of a patent issue there needs something something different technology is something more scalable thing um to be some other significant advantage thank you so leo i wanted to come to your last question i mean you're based here in crypto valley in switzerland just at the heart of it now maybe your opinion where do you see the potential

luke martin i mean just as you said i think you know switzerland has a unique role uh both uh you know in the financial industry and globally in terms of its approach to international trade and i think that's what we're really about here when when it comes to blockchain so i don't think any company has been successful in just capturing uh a niche play in their own market i mean everything by default the coin bases finances etc in fact have reached the scale and attained what they wanted to do let's say in in facilitating let's say transactions in the way that they do many of the other protocols and so forth that are coming through um we'll do things similarly and they're set up in the same way so really i mean crypto valley i think is is a great

base for um creating opportunities and bringing people together uh but ultimately i mean this is uh one not a big enough market to actually you know reach a critical mass unless you're purely focused on the b2b space and if you look at where the adoption is of of blockchain and digital assets on the b2b front uh it is difficult to reach that um and then you know in practice i think going forward there's a reason why you guys are also looking globally and trying to be that pioneer of bridging ecosystems and i think that's very much the mindset and opportunity i mean this is decentralized technology and the whole purpose and point of it is to to manage things in that way and i think that's very much in line with the values here and certainly how we see

ourselves as a swiss based but very much globally focused uh venture firm thank you yeah i think i mean what is maybe not yet this cost here but also for the other participants it's interesting i think in switzerland uh without now becoming too much geographical because i know we have a global audience but still i think it's important to mention that from the beginning of the coming year first of january 21 we will have a very solid framework here in switzerland regarding crypto assets so i think i mean the digital paper of value is now something which is broadly accepted and protected and i think that's a very

important step regulatory clarity that people know where we can i think this is anyway something which agatha mentioned it before and you mentioned it and ibrahim if we talk about defy etcetera i mean all these wonderful projects we can have but the legal framework is not ready to accomplish it and so i think even if technically we would have some wonderful solutions to provide to the people still we are in a very regulated market and we all i mean especially also the three of you you all we all we're here for accredited investors which obviously

it's quite a high threshold and which is also difficult let's say for simple people to invest in very interesting projects and i think and i'm happy that here in sweden the uh by the way unanimously went through parliament this this this law here without any voice of opposition so i think it's something very interesting and i will have will have an impact this leads me to the last question i think we could open the the the the form so that all um participants here are visible i have one thing i mean we talked about that now or i explained about the situation

here in switzerland i had a question from one of the attendees of our meeting how is it do you in the the for you do you also assess u.s projects or is it i mean we have still lots of on clarity in the us which where we know i mean if we can be we can have very negative impacts so how how is it for you how do you see and do you invest in the us with blockchain technology or or don't do this will be the first question i won't ask it again and then the second question with maybe which you could also respond we discussed it briefly now

we're in this sad situation of coronavirus said i mean it's not something probably we have to touch as good or bad it's just here it's here it's here to stay at least now for the next few months how and we have seen i mean the financial markets have been turmoil and and and changed some company gained a lot other one lost a lot and how do you see uh the impact of the kohuna beers on our industry so i'll answer the uh the first question because i've already mentioned about corona so i'll let the other guys take care of that but um as a

u.s base hedge fund uh there are if if the if the project in the crypts project the blockchain project whatever it is is complying with u.s laws then there are no implications for us to invest in it um the the issue is that the u.s has been very ambiguous um and quite strict on on crypto projects and to a certain extent rightfully so because they're trying to protect the interests of investors um but because of this um stringent requirements to operate in the us it means that a lot of crypto projects have chosen other jurisdictions and parts of the world to operate in you know a lot of europe uh middle east and asia

so there are less projects that to invest in in the us for sure but if if if you're going to operate in the us as a crypto project as long as you're complying with the laws there are no issues it's only when you try and you know bypass the laws the problems are going to come and you're going to scare away investors so stick to the laws and this will be the best thing for the long-term health of your company i've already uh commented on uh what i think the chronovirus has done for the space which i think is it's been very good for the maturation of the space but i'll let um i get to comment on that she likes um corona and i don't know i think uh i think it's a

bit early to say uh obviously you know we're witnessing a bull run i don't necessarily know that it's uh attributed solely to corona there are many other factors uh that work the work on it um aside from uh from the pandemic uh i do think that um the injection of enormous amounts of capital and uh the printing of of billions of dollars um you know drove people to look for uh assets that are uncorrelated or unaffected by it uh bitcoin being one of them and i think uh it may be

maybe uh contributed to the growth in bitcoin there are other contributors uh the hacking event and uh and the institutional players coming in and so on so um overall it seems to have to have had a good a good effect i think i think also the fact that people um you know are getting used to uh to technology maybe more than in the past they're working remote they're getting used to zoom even people you know maybe uh maybe other generations are getting used to uh to being more technological doing shopping on shopping online uh ordering their uh paying online for things i think

that may be uh maybe a contributes to uh to better adoption of uh of uh of crypto and other means of payment so i mean i would assume that it has a positive effect i'm not sure that uh all of this uh recent bull run is attributed to uh to corona yeah i mean not too much to add i think on corona side i think it's it's been well captured would you say on the us i mean obviously i have you know many different perspectives on this because especially now in the d5 space i think most of the projects and companies and momentum which are moving mountains let's say in this space either asia or u.s basin

i think there's huge opportunities there uh one of the the bigger challenges you mentioned martin was around regulatory topics and i think this has been one of the bottlenecks from you know things really exploding um even more so than they have been this year and i think that's you know really even for us as a legacy kind of um swiss-based fund manager um advising out of a luxembourg vehicle i mean we don't even have that's a legacy problem nothing to do with blockchain but we don't even have the the right to invest in u.s companies due to tax treatment of of this of this fund structure that we run and i think these are some of the the challenges that you have um trying to adapt you know very traditional fund models and fund structures that you have in europe in the venture space to capture global market opportunities

but definitely would never write off or rule out the us and their opportunity here and once they do eventually figure out how they will regulate this space and actually do things their way i'm sure there will be another another frontier of opportunities opening up thank you all the three of you now i tell i told before it was the last question but it was not i know we run late and will be finished soon but maybe just give me two three words or phrases what did you learn tonight from the other speakers what one thing that's very apparent is

that it's actually quite a tough question to finish on but uh how different the other two funds operate to us but i think that's very good because diversity is important and you know different people need to invest differently and hit different angles of the market so um you know i'm glad that connected with the other speakers um and yeah i said that's it that's the main thing i've picked up on i would you have to say more okay can the other guys help me out i think ibrahim i'll i'll help you out here and say from my side my biggest takeaway is that it was possible to do a 300 return uh during this year so i think i need to really reevaluate where and how i'm spending my time because i think um you know as bullish as i am on the space i don't think our

venture portfolio is going to achieve quite the same returns this year so that's a good a good takeaway for me thank you very much we appreciate it i mean uh yeah d5 has definitely been a big factor in that uh but yeah i mean hopefully we can beat it next year but it's a it's a high target to be uh well yeah my takeaway may be from uh from this discussion and it's uh it's always the feeling that i have uh after these panels is that even after uh 2018 and 2019 which were very you know difficult years for the industry uh there are people you know that uh that are not new to this that you know

that overcame uh these years and are still here and still believe in this and still uh are bullish on investing and uh and still uh still have uh you know a thesis and uh and an agenda and uh you know happy to happy to see that thank you you know i think for me my learning was that i mean as as also ibraheem told it very different approaches to invest still very convincing all of you and i think we just are really and probably this corona the iris was cut alisato into the new world which started already 30 40 years ago

with the internet but which was kind of the surface it didn't it it took many years to go really to to infiltrate society and also behavior of people this happened now with this kind of devices we have at hand now and probably the next year is this trend will go on and will become even more important basically the digital transformation will touch many points of our personal lives and i hope and i think we all should support a technology which gives freedom to the

people which is decentralized also in a solid way uh systems which are also resilient enough to absorb shocks and and which gives freedom to the people and with this i would like to close our event today i'm very happy uh that you were willing to participate and i thought it was really great what you what we had but we have been able to learn from you thank you thank you very much and i hope we keep in touch and i hope that we'll soon also have the opportunity to meet each other

in person thank you very much much appreciated thank you thank you very much martin thank you very much i'll see you later nice to meet everybody bye-bye thanks for all who listen to us i hope you enjoyed it come again we tried to do this more often and all the best and merry christmas bye bye