Angel Investing & Blockchain - Angels Nest BIM Yucatan

725e3e8f63148459cdbb84f4d673d0ad?s=47 Boris Mann
November 10, 2017

Angel Investing & Blockchain - Angels Nest BIM Yucatan

A mix of intro to Blockchain & crypto-currencies, plus ICOs, how angels should thinking about investing, and opportunities for Mexico.

Presented at Angels Nest / BIM Yucatan.

725e3e8f63148459cdbb84f4d673d0ad?s=128

Boris Mann

November 10, 2017
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Transcript

  1. 2.

    Boris Mann • First Startup Accelerator in Canada • Seed

    investing • National Angel Capital Organization (NACO) • Open Angel • Frontier Foundry
  2. 4.

    Three Definitions of Blockchain • Blockchain as Innovation • Blockchain

    as Public Chain • Blockchain as Ethos Credit: Lisa Cheng, Co-founder Vanbex / EtherParty
  3. 6.

    Describing Bitcoin as Money over IP “Blockchain is going to

    disrupt business models the same way that VoIP disrupted the telephony market. ” — Pantera Capital, Blockchain Letter, Nov 2017
  4. 7.

    Bitcoin was the first blockchain • Created in 2009 •

    All other “coins” copied the Bitcoin code • Very complicated: C++ code & miners
  5. 9.

    Ethereum includes smart contracts • Crowd sale / coin offering

    in 2014 • Created as a new coin, went live in 2015 • In 2016, forked into ETH and ETC • Includes smart contracts — which are really apps — that run on the blockchain
  6. 10.

    Ethereum Tokens • Ethereum defines ERC20 — a token standard

    • An explosion of tokens — no C++, no mining • 2017 becomes year of the ICO - $2B+ raised
  7. 11.

    Blockchain as access to financial infrastructure “Developers and start-ups who

    wish to build financial products do not have open and unfettered access to the world’s financial infrastructure. While Ethereum doesn’t provide access to that infrastructure, it does provide a different infrastructure that can be used to, for example, create and execute a financial contract.” 
 — Adam Ludwin, Chain, A Letter to Jamie Dimon
  8. 12.

    “33/ You could argue that investing in Ether is betting

    on the total economic value of all the tokens built on top of Ethereum.”
  9. 14.

    Initial Coin Offering (ICO) • aka Token Generation Event •

    Define a token and an economic model, sell it to global participants • Pay with crypto online through a website, get coins / tokens • $2B raised in 2017
  10. 15.

    Security vs. Utility • Many ICOs attempt to classify as

    utility tokens • Increasingly, many are being labeled as securities • Utility tokens are being traded on exchanges
  11. 16.

    ICO Regulations • China has cracked down completely • SEC

    has an enforcement group • Crypto friendly areas such as “Crypto Valley” in Zug, Switzerland • Every country playing catch up on regulations
  12. 18.

    Mexican Fintech Stats • Debit and credit cards are used

    regularly by only 18% of the population • Large usage of pre-paid credit/debit cards • 135K convenience stores (7 Eleven, Oxxo) where people deposit money • ~54% of the population don’t have a bank account
  13. 19.

    4 Major Exchanges • CEX.io - credit card, ACH bank

    transfer, SEPA transfer, or AstroPay • Bitex - AstroPay • Bitso - SPEI Transfer, Oxxo or 7-Eleven • Volabit - 7-Eleven, Farmacias Benavides, Farmacias del Ahorro, or Extra
  14. 21.

    Opportunities for Blockchain in Mexico • Remittance • Mobile Banking

    • P2P Lending • Microfinance • Provenance
  15. 22.

    Can Mexico use Blockchain to leapfrog? • Blank canvas to

    implement new models • Along with adoption of smart phones and banking, can leapfrog straight to decentralized applications
  16. 24.

    Types of Blockchain Investing • Hedge Fund: Many people are

    investing directly in Bitcoin, Ethereum, and other coins, in a sort of “crypto” hedge fund • Pre-Sales: Early access to ICOs through pre-sales, often with a SAFT (accredited investor only) • Angel: More traditional angel investment in the company directly
  17. 25.

    Simple Agreement for Future Tokens (SAFT) • Modelled after the

    Y-Combinator Simple Agreement for Future Equity (SAFE) • Instead of equity, get tokens at a discount when the ICO happens • Just as risky as any other form of early stage investing — opportunity for very early liquidity (~6 - 12 months)
  18. 26.

    Assessing a blockchain company • White Paper • Network Economic

    Model • Is it any different than reviewing any other company? • Challenge is absence of an informed angel investor community
  19. 27.

    Blockchain Take Aways • Blockchain will interact with many industries

    — fintech, supply chain, law, copyright • It is both a technology and a movement • Regions outside of the US may benefit more and have an opportunity to leapfrog • We are very early in the cycle — you need to put the time in to understand, research, and participate
  20. 29.

    Frontier Foundry • Building a platform to work with Regulated

    Tokens • Initial target market is powering Debt Pools on the blockchain: Canada, Kenya, Korea • Close the finance gap for SMEs http://frontierfoundry.co
  21. 31.

    Vinay Gupta • Programmable Blockchains in Context https://medium.com/humanizing- the-singularity/by-the-end-of-this-article-youre-going-to-understand- blockchains-in-general-and-ethereum-a-next-e11df6a1d7cf

    • What does Ether $100 mean? https://medium.com/humanizing-the- singularity/what-does-ether-100-mean-bb58522f781e • “A smart contract is a tool for changing the world.” • “direct communications between people, which are capable of storing and transmitting economic value.”
  22. 32.

    References • IBM Blockchain 101 https:// www-01.ibm.com/common/ssi/cgi- bin/ssialias?htmlfid=XI912346USEN& • Letter

    to Jamie Dimon, Adam Ludwin, https://blog.chain.com/a-letter-to- jamie-dimon-de89d417cb80 • Pantera Capital Nov 2017 https:// medium.com/@PanteraCapital/vcs- missing-97-of-the-trade-blockchain- letter-november-2017-e02abd27c47f • What is the value of a token?, Sizhao Yang @zaoyang https://twitter.com/ zaoyang/status/ 901099062254030848 • Jamie Burke, Outlier Ventures, https:// www.slideshare.net/jamie9010/ investing-in-blockchain-startups-a- guide-for-angels-vcs, Slide 21