You blinked. It’s changed. Pivot.
This post was meant to be written so long ago but this whole blockchain movement shape-shifts at the speed of light. Blink and you are steps behind and can’t even catch up to write a blog post.
If you’re not yet familiar with blockchain technology (it can be very nebulous for many), the premise is quite simple. Synonymous with distributed ledger technology, it equates to automatically-recorded electronic data records (a series of 1’s and 0’s in the case of Bitcoin, the original and most famous use case). Enabling it eliminates the need for a middleman (like the government or a bank) to authorize the records.
It was December, 2018, the markets were exploding with Bitcoin frenzy and initial coin offerings (ICO’s) offered the promise for a gold rush that even the luckiest 49er couldn’t fathom. The 90’s internet boom was upon us, and everyone was tokenizing (converting to digital shares) and netting millions from the masses for their world-changing project.
I had been a managing partner in a fast-growing SaaS startup that I helped launch in Trak Software (for you sponsorship marketers out there, think of it as having your day back). The opportunity arose to take on a C.O.O. and Head of Fundraising role (but also taking the lead in finance, sales management and deal vetting, research, and go-to-market duties) at a crowdfunding group that had birthed an upstart project after pivoted itself to accommodate accepting cryptocurrency for the instant settlement and decentralized prospects that blockchain tech provides with huge, demonstrable upside. I had a lot of friends that went into finance successfully and had always had an eye on what’s next and after all, every industry was about to be disrupted and we could be at the epicenter.
In December, I volunteered my time unpaid to “train” long hours. The time was now. Over the holidays including Christmas Eve and Day, I devoted myself to formulating and editing version after version of the “white paper” – the business plan of the industry and key to a successful token sale. New, amazing white papers came out with the mindset of a new, disrupted future. Every industry, new models, protocols and structures. Grand ambitions with incentives to get in early and win big – (like everyone was doing, average ICO return was 1720% while dreams got funded). There are too many big wins to count like Polymath, EOS, Blockchain Capital, Stellar, Crypto Kitties (right?) or any 2017 ICO in general to the tune of $6 billion raised digitally.
There was a frenzy over who could be novel, first, most appealing and successful in cutting out today’s central power to change tomorrow’s standard. Globally, countries were trying to turn to decentralization to thwart the corruption that had ran them into the ground for years by the greedy, bribed politicians and empirical rulers.
But who would take down “the man” on behalf of the world?
If you’re unfamiliar of how the movement started, let’s rewind to the financial crash of ’07. I was coming out of college and like many, had no idea what was happening. Essentially, all the banks were selling collateralized debt, packages of garbage loans on houses, cars, etc. performed all over by shady or naive financiers to other financiers and packaged into investments. Housing prices skyrocketed, real estate will never fail!
Until it did. Hard.
What people didn’t realize was that the exorbitant interest rates they signed the 1st or 2nd mortgage for didn’t quit. When they lost their job, and all of a sudden they were under-water, their house was worth less than they owed on it and poof. It was gone.
The banks all owned these CDO’s (collateralized debt obligations), yet no one truly seemed to know what they owed or how unstable it could become. They were too busy leveraging what they (thought) they had on hand or in-pocket and were too busy leveraging that credit well beyond what they should have. They were too arrogant and uninformed to read the tea leaves and the result was, the largest financial crash in U.S. feeding the rest of the world’s history since the great depression.
In the midst of it emerged Bitcoin, founded by the enigma Satoshi Nakamoto, a system of binary code of 1’s and 0’s, mined by believers (stored on a local drive for returns). Bitcoin could be sent to digital wallets anywhere with no bank needed to reconcile.
Sadly, however, the mainstream media was too stuck up its own ass to realize what it meant and the first use case most everyone knew about was Silk Road, the marketplace made famous by the drug trade. That was the last association people had, not the fundamentals of creating an instantaneous, world where math was the answer and you didn’t need a middleman to register and record the transaction as the blockchain revealed all. The power could now be out of the hands of the corrupt and given back to the people.
Fast forward ten years. More and more people had caught on to the point of the Bitcoin market price going up hundreds if not thousands of dollars per unit. No one had seen anything like it. And Bitcoin fed every other spawned cryptocurrency and blockchain project behind it symbiotically, including Ethereum, the 2nd biggest currency and a protocol that every new ICO project was built on (ERC20 Standard) which itself shot up beyond $10,000 per ETH unit.
Our original founder missed the dot-com boom and was hell-bent to not miss another wave, working around the clock and expecting me to do the same. The software in place was compliantly-designed after the JOBS Act of 2012, where companies could go to the masses to fund their projects in exchange for equity or tangible benefits of sorts. Think Kickstarter, except instead of handing out hats or T-shirt for cool ideas, they’re handing out a piece of the company.
Compliance is the key word in all of this. We had it, they need it.
Our “token flow” model enabled us to take a piece of the companies we helped launch, and to launch ours, we would give up not only some of our equity, but a representative % of these token flows that we took in from issuers. Being guided by our resident crypto advisor, who had started mining Bitcoin in 2011 when it was a worth a few bucks per, we were targeting a hundred million dollar raise of which we would bring in some of the top established “whales” and players to the family to launch us and partner with their established game-changing tech platforms. I was in charge of coming up the proformas, and even in the most conservative of scenarios, this was a can’t miss investment scenario (vetted by my critical-eyed veteran VC and private equity advisors that I brought in to add strategic value).
In exchange for giving these hungry issuers the platform to launch their dreams that would check off the compliance x’s and o’s, we would take a setup fee, and small % of cash and tokens from each company. The rush was on to get it and we held the keys.
We were about to hit it big. All we had to do was go live with our go-to-market materials and plan and start soliciting investments.
I was brought on to speak at a conference and judge a business pitch competition with the biggest names in the decentralization space in Brock Pierce, his wife Crystal Rose and Patrick Byrne of Overstock and TZero. We were racing, maneuvering, positioning, getting ready to go-to-market and hit go, launching promising projects on their fundraises.
Then boom.
Unfortunately, the government’s lack of legislative clarity on digital securities quelled the momentum. Despite all the positioning, networking, developing, interviewing and screening of the next world-changing companies and projects, FUD (fear, uncertainty and doubt) put a wet blanket on the fire. My blockchain dreams to help usher in a new standard dried up 1.5 years after it started despite all kinds of promise, much like those of many other similar digital pioneers out there (especially domestically).
The premise and possibilities of the technology will, however, continue to develop by big or well-resourced players.
Don’t sleep on the spark.
TRUE NORTH TEAM CONSULTING 