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Angel Investing & Blockchain - Angels Nest BIM Yucatan

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.

Boris Mann

November 10, 2017

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  1. Angel Investing & Blockchain Angels Nest • Merida • Nov

  2. Boris Mann • First Startup Accelerator in Canada • Seed

    investing • National Angel Capital Organization (NACO) • Open Angel • Frontier Foundry
  3. What is a blockchain? IBM Blockchain 101

  4. Three Definitions of Blockchain • Blockchain as Innovation • Blockchain

    as Public Chain • Blockchain as Ethos Credit: Lisa Cheng, Co-founder Vanbex / EtherParty
  5. Audience Interview

  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
  7. Bitcoin was the first blockchain • Created in 2009 •

    All other “coins” copied the Bitcoin code • Very complicated: C++ code & miners
  8. Top 5 “Coins” by Market Cap via http://CoinMarketCap.com

  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
  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
  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
  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.”
  13. What is an ICO?

  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
  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
  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
  17. Blockchain in Mexico

  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
  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
  20. Total Funding by Country (US excluded) Jamie Burke, Outlier Ventures,

    CoinDesk / Coinbase
  21. Opportunities for Blockchain in Mexico • Remittance • Mobile Banking

    • P2P Lending • Microfinance • Provenance
  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
  23. How should angels invest in blockchain companies?

  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
  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)
  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
  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
  28. Boris Mann • @bmann https://frontierfoundry.co

  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
  30. “Do you want to be a crypto cowboy or a

    pig farmer?”
  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.”
  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