March 21, 2018 | Webinar

Unlocking the Mysteries of Blockchain and Cryptocurrencies

Rohit Kulkarni 00:03

Hello, everyone. This is Rohit Kulkarni from SharesPost. Thank you for joining us today, and we are going to kick this off in a couple of minutes. So please stand by and I’ll be right back.

[silence]

Rohit 02:01

Okay. We are going to go ahead and get started. Happy first day of spring, everyone, although I hear people on the East Coast may not feel that way. Anyhow, good morning, everyone, to people joining us from San Francisco Bay Area or the West Coast. And good afternoon to anyone who’s on the East Coast. On behalf of everyone here at SharesPost, I would like to welcome you to today’s webinar. I am Rohit Kulkarni. I am the managing director of the Private Research Group at SharesPost. Among other things, I oversee SharesPost’s website content, data, and research group.

Rohit 02:39

Today, I’m very excited to have with us Travis Scher. Travis is a young and a hot guy in a very young and a hot sector right now. He leads the venture capital and new cryptocurrency investments in Digital Currency Group, DCG. I believe it is one of the most prolific investors in the Blockchain space. And they have investment over 110 Blockchain companies in more than 30 countries, including in current portfolio companies are Coinbase, Ledger, Ripple, ShapeShift, and many, many more. And they also invest in cryptoassets: Bitcoin, Ethereum Classic, Filecoin, Zcash, so on, and so forth. And they also incubate and acquire businesses. They have a company called CoinDesk, which I personally rely on a lot of Blockchain news, research [inaudible], and events as such. So I’m very excited to pick his brains on a very relevant and a very hot topic, Blockchain, Bitcoin, ICOs. And I’m pretty confident that the collective knowledge of all of us, as a group, is going to definitely rise like a price of Bitcoin, at least up until December, how it went, in the next 25 minutes. Anyhow, Travis has graciously put together a presentation which he will walk through. Let me know if you need a hard copy.

Rohit 04:09

And before we jump into the main part of this webinar, in case somebody is joining us for the first time, SharesPost is a financial services, a Fintech company. We believe we are bringing together shareholders and individuals and institution investors to create liquidity within the private tech group asset class. Here are just a few companies that we have from back to then. We have been around for more than eight years now. And SharesPost Research is a group that we started about 18 months back, and we have published a whole bunch of research to Forbes. On your screen, you will see a few relevant research supports on Blockchain and crypto that you would find interesting, including some webinars. I like the one right now that we have hosted, for a click kind of download as such. We publish a lot of white papers. As I said, we do a lot of webinars. Last month, we did a webinar on tax reform, which again is fairly topical for many investors in the private markets, and so on and so forth. We try to stay on top of market commentary. It’s a unique time here in Silicon Valley, having the [inaudible] today-- or yesterday, having the Dropbox IPO tomorrow. It’s a very, very electric time here in Silicon Valley, I would say.

Rohit 05:54

Again, I’ll keep this brief. In terms of what we understand about Blockchain, we have a real expert here, so I won’t take away too much of his time there [inaudible]. But Blockchain, it is a smart contract, it is a distributed ledger, and it’s many things to many people. Cryptocurrencies are the first kind of application of Blockchain technology as such. Each currency has its own technical capabilities as their own kind of algorithm, and distribution, and decentralized nature. But unless they’re in a bit of a [rock?], cryptocurrency as an asset category has emerged and has essentially have been fairly active over the last eight to 12 months, if you will.

Rohit 06:44

I feel it’s also called as initial coin offerings. A lot of early stage companies are offering to raise money with this approach. We believe that the amount of capital raised via ICOs have exceeded the amount of capital raised by private companies, particularly in the early stage. See that the [inaudible] and probably [inaudible]. More than $3 billion already invested in ICOs globally and 2018 year to date, just a couple months in. But the chart on that bottom, the right most is just two months data, is already kind of on track to exceed kind of half of last year. So yes, we are-- kind of appears they’re to stay as the [inaudible] of concern. So I’ll stop right there. A lot to talk about and a lot to discuss. Travis, the mic is yours, and you’re good to go.

Travis Scher 08:26

Thank you, Rohit. Well, hello everybody. It’s great to be chatting with you all today. So yes, so what I’m going to do is first I’m going to introduce myself and the company that I work for, so you all know who’s speaking to you. Then we’ll talk a little bit about ICOs and token sales which have sort of taken the worlds of finance and technology by storm over the last year, so. Then we’ll talk about investing in Blockchain startups. That’s what I spend most of my time on. And lastly, because I think this is an area that’s been much in the news in the last month plus, we’ll talk about, at a very high level, the regulatory situation around these cryptoassets, and around Blockchain companies. And how different governments around the world are approaching this, what some of the issues are, and what the general outlook is?

Travis 09:33

First off, I just notice there’s an error here. So I’ll tell you who we are and then I’ll tell you what the error is. So Digital Currency Group is a company. So we’re not a traditional venture capital fund. We’re not wannabe new crypto hedge funds. We’re just set up as a company. And the reason we’re set up that way is that we do a bunch of different things. So we incubate businesses, we have acquired businesses and will buy more businesses in the future, we make venture capital investments, and we invest directly in cryptocurrencies, cryptoassets. So we really have elements of a hedge fund, venture capital fund of a private equity fund, and an incubator. So we sort of style ourselves as a budding Berkshire Hathaway or SoftBank, or IAC, or Naspers, or somebody like that. And so we have three buckets of assets. We have wholly owned subsidiaries and this is where the error is. So here it says that our subsidiaries have $700 million in annual revenue on the slide. Where they had a kick-ass 2017, but they’re not quite there yet. I think the number is closer to 70.

Travis 10:49

So the first bucket we have are-- we have three subsidiaries today. So we own CoinDesk, which is a company we bought a couple years ago. They’re the preeminent media and events platform in the industry. They host big conferences and they have one coming up in May called Consensus, that’s two and a half days in New York. Great event to check out for anybody who’s really interested in the space. We own Genesis, which is a digital currency broker dealer. And we own Grayscale, which is digital currency asset manager. So they are the sponsor of eight digital currency investment products for credit and investors of the most well-known of the Bitcoin investment trust, which is the first publicly traded Bitcoin investment vehicle in the US trades under the ticker symbol GBTC.

Travis 11:36

And most recently, they have announced the basket product called the Digital Large Cap Fund, which is I think is super interesting. Really attractive investment for folks who think this is going to be multi-trillion dollar asset class, but don’t know exactly what assets to invest in. Those business we own 100% of. And then I spend my time on these second two buckets of assets. So our venture portfolio, where we’ve invested in about 115 companies in 30 different countries, we’re primarily key stage investors, although we follow on and we’ll write bigger checks as companies mature. And then we also invest directly in these tokens or new cryptoassets or cryptocurrencies, whatever you want to call them. So this is just a snap shot of most of the companies in our portfolio grouped by category. You can see that we’ve, through the use case for this technology, we’ve probably invested in at least one company that’s testing it out.

Travis 12:41

So first, I’m going to talk about ICOs and token sales. So many people ask, “What is an ICO? How would you define it?” So I define it as the sale, typically the crowdsale, although more recently, people have been doing a lot of private, accredited-only sales, Blockchain-native the digital assets. And what those assets typically do is they can further write to participate in some network or to use a product or service. They’re not equity. Although, you can create cryptoassets that are equity. Nobody has really done that yet. They’re not debt. The holders of these assets don’t have traditional legal rights. And in fact, it’s not clear in some cases if they have any rights. But we’ll circle up on regulation at the end. The fact that they’re not debt or equity explicitly doesn’t mean that they won’t be deemed securities which could raise a whole host of issues for these things.

Travis 13:42

So these are a couple slides I prepared really last November, so they’re a touch out of date. But I just want to put into context how crazy this ICO mania has gotten. So these are the 10 biggest Blockchain venture capital rounds ranging from 2015 through 2017. Look at how long these companies were around at the time that they raised money and the amounts that they’ve raised. They raised about 700 million in total. Then as of last November, these were the 10 biggest tokens sales. And you’ll see here that they raised twice as much as the 10 biggest Blockchain VC rounds and 8 of 10 of them were in development for less than a year at the time that they raised money. So these were basically really futuristic seed-stage projects in most instances that were raising Series B, Series E type money. So that raises a whole host of issues. But first, let’s explain why this is happening.

Travis 14:5

So the first reason that this took off is that in 2017, it became much easier to launch your own cryptoasset. The reason it became easier is that previously, what you needed to do to create your own new cryptoasset was to spin up your own Blockchain which would have required you to either copy Bitcoin’s code or Ethereum’s code and then onboard a bunch of nodes who are the miners and the network who will dedicate a bunch of computing power and thereby secure the network.

And if you don’t get all those nodes, then your network isn’t really secure. And the fact that it’s a Blockchain is really relevant and the asset really shouldn’t have much value. But it’s hard to get those nodes unless miners believe that an asset is going to have value. So it was very hard from the ground up to create these assets, but what changed was that people came up with a way to create these tokens that effectively live on top of Ethereum and they’re called ERC20 tokens. And what that meant, if anybody who wanted to create a new token didn’t have to spin off their own Blockchain, they could use tried and tested code to create a new asset that had whatever supply they wanted to give it, whatever ownership structure they wanted to create, and then they could, using Ethereum smart contract, enable those people to do a bunch of different things with those tokens.

Travis 16:26

Another thing would be sort of a flywheel effect where Bitcoin and Ethereum started going up in value a lot, and the early holders of those projects wanted to replicate their success again, so they wanted to invest in early new cryptoassets. And so what you had were these-- what people in the community call Bitcoin or Ethereum wells who had a ton of money and new currency, just piling it back into new projects, rationally or not. Then I think more probably, there are two things that are going on which explains why this is happening now. One is, I think a lot of the big ideas behind decentralization and privacy and autonomy, really started to capture the imagination and resonate with people all around the world less. So I think what’s going on with Facebook this week illustrates beautifully how these big ideas are resonating with people and new technology needs to be developed so that humans can maintain their freedom, going forward. It’s that profound and that’s getting a lot of people excited.

Travis 17:39

The last thing is, I’m not necessarily the most qualified person to speak on this because I’m not an expert in other asset classes, but my understanding is that all asset classes are extensive now. There’s just a tremendous glut of capital all across the world. Certainly, see this in the venture capital market more generally. And there just aren’t that many attractive asset classes to put it in. So the total market capital, all cryptocurrencies today is like $350 billion, nothing compared to the size of the stock markets, and the bond markets, and the real estate markets. So it’s still super early on them. There’s plenty of capital. It’s easy to work here.

Travis 18:24

So as we look at this sort of booming ICO. So we have actually taken a much more cautious, skeptical approach than many others who are focused exclusively on this space. The reasons are, not that we’re not excited about this potential of this technology, but one, because we think there’s still a tremendous amount of regulatory risk. So it is possible that many of these ICOs that happened in the past or will happen going forward will be deemed-- or the tokens themselves will be deemed securities. And that means that many of the sales that were done, were done non-compliantly. And it could mean that the buyers end up, they’ll have rescission rights, so they can demand that the issuers return their money, which could create a kind of a snowball effect, whereby the issuers have to sell the crypto that they raised to pay back the purchasers of the tokens which drives prices down further, which could create a crash. Additionally, it could make it very hard to trade these things going forward.

Travis 19:34

Next is, despite all the hype and the excitement, we just haven’t seen any real adoption of the applications that are being built using these new tokens. I do think they will come, but it’s still very early because a lot of pieces of the infrastructure still need to get built. Third, I mentioned earlier that these projects are raising an extraordinary amount of money and I think that’s a big problem. I don’t think it’s a good thing that really small teams with not a lot of experience are raising 50, 100, 200 million dollars because A, that leads to just a lack of discipline. We’ve seen this in the companies we’ve invested in on the venture side. And B, it absolutely reduces motivation. I mean, it actually takes a truly exceptional human being to want to stay motivated to create something that is going to be very hard to really make work once they have $50 million in the bank. And no shareholder is beating them over the head to turn it into something. They have these token holders who don’t really have rights. So the motivations are skewed.

Travis 20:47

Also, government structures are weak. As I alluded to [inaudible] what rights the token holders have. It’s really not even clear, some of these projects shut down after a year or two when they realize it’s not feasible and they just spent a small fraction of the money. It’s really not clear that the guys behind these projects can’t legally walk away with the money. I mean, their argument is they pre-sold the product and that product might work a little bit, but people knowingly bought it and this was revenue to them. That’s how they’re treating it for tax purposes. And so I’m not even talking about fraud, which there has been and will be plenty of, but even good-faith folks who can’t make their idea work. I mean, what are they going to do with all this money that they’ve raised? And what rights do the token holders have?

Travis 21:41

And lastly, we do think that the prices of these things and the valuations are completely insane and out of whack. People are still figuring out how to value these assets because they don’t have cashflows in the way that traditional stocks and bonds have. But the fact that companies that couldn’t raise a dollar, literally a dollar of venture capital, are easily raising $25 million in ICOs, I think speaks loudly enough about kind of where prices are today. So now--

Rohit 22:16

This is Rohit [dear?], sorry to interrupt. Early on slide, as in, couple of clarification questions about no adoption of DApps yet. As in, couple of questions came in. Can you just draw that out a little bit more? As in, what are these-- [inaudible] DApps?

Travis 22:36

Yeah, sure.

Rohit 22:36

And why better yet after that? What are you waiting for?

Travis 22:40

Sure. So decentralized applications are Internet-based applications that have no central intermediary. So in a sense, Bitcoin is a decentralized application of some sort of money for [inaudible] business. Whereas something like Venmo is a centralized application because you’re relying on Venmo, and PayPal, and your bank to validate transactions. Here, the validation is done in a decentralized fashion. You can imagine, for example, a decentralized version of Uber where you have a protocol that matches drivers and riders, and sets the price algorithmically and automatically. And the payments are done solely peer to peer using some sort of Blockchain-based network. And somebody builds a front end, either that maybe they can monetize it or maybe they don’t. Maybe they just build it on behalf of the drivers. And what you end up with is Uber without Uber. Which from an economic perspective would mean Uber is no longer taking a cut. Which could mean that riders get rides more cheaply, and drivers can capture more revenue. Plus, a company like Uber can’t change the rules of the game on them super quickly. So that’s an example of a theoretical decentralized application.

Travis 24:21

There are hundreds of other ideas that people have come up with, literally hundreds. The reason we haven’t seen any adoption yet, there’s a lot of reasons, but I think the primary reason is that a lot still needs to be built for something like what I just described to work. You need to build a protocol that actually works and then you need to build a front end that is basically as good as Uber, even though there’s no company behind it, and how those things get developed and built is not clear. What you could have is you could have a company do an ICO for an Uber coin, raise money that way, build out first the protocol to connect drivers and riders directly, and then use the proceeds to build out the front end to incentivize people that come onto that network. And then the folks who created this could benefit from appreciation of the token which might go up in value as demand for that service increases over time.

Travis 25:29

So the reason stuff like that hasn’t seen adoption, one, is it’s really hard for decentralized organizations or the teams behind these projects to build products that are good as centrally controlled organizations are. Two, Blockchains today, there are amazing pieces of technology, but they are still relatively slow and cannot handle high [inaudible] in the way that centralized databases can. So there’s a lot of solutions being built around that. But suffice it to say that we’re sort of in the dialogue era of Blockchains. They still don’t compete with centralized systems in any way shape or form from a scaling perspective and from a speed perspective.

Travis 26:21

The other reason that we haven’t seen adoption I think is-- in the example I just described for you, you have to onboard-- first to really take off, you have to onboard thousands and then millions of people into this new token economy where perhaps in that example, they need to be comfortable using an application specific volatile cryptocurrency day-to-day transactions. And the mass market is nowhere near ready for that. And I’m not sure they actually ever will be. So it might be that you end up getting these decentralized applications that don’t have native cryptocurrency, like an Uber coin, but you build a decentralized Uber that where the payments are done using either Bitcoin, or Ether, or a cryptocurrency that is tight to the dollar. So yeah. So that’s a little bit about decentralized applications.

Rohit 27:20

Okay. Great. Sure. Your inbox is going to be filled with our people trying to build an Uber coin, if it’s not already done. I have to go [inaudible] after this call. Actually, one kind of two-part question. I see a few on online as well. As in, one macro and one micro. In terms of ICOs and raising capital, and you showed on a couple slides, we also track with data the amount of money that we see they’re investing and the amount of money that companies that are using via ICOs, particularly on the early stage. So do you see kind of a zero-sum game involved between how early stage [inaudible] we see that able to invest in this as a category versus kind of the crowdfunded way of using ICOs, as in-- is that, as a VC, three clear kind of deceleration or impact declines in the amount of capital that early stage VC they’re deploying over the last 12 months? And coincidentally, we see ICOs take off. So as in, it could be coincidental or it could be a cause and effect. Do you have a viewpoint on that?

Travis 28:41

I don’t think that the two are connected at all. I think that the vast majority of strong entrepreneurs with viable business ideas are still pursuing equity capital for their businesses. I think that there’s a whole host of folks who are doing ICOs who couldn’t raise venture capital and who certainly couldn’t raise venture capital for the ideas that they’re doing ICOs for. I think that the slow down in VC is just kind of a natural cyclical thing. After probably too much money rushing into the early-stage markets people not-- bunch of funds, not seeing the returns that they wanted, there’s just less being deployed there. Yeah.

Rohit 29:42

Okay. And then one micro question is about kind of trends that you’re seeing in ICOs in the last, call it, say three months or maybe the most four months. As in, are you seeing any kind of inflection points or any change in trajectory in terms of how people are viewing this?

Travis 30:04

So when this kicked off in late Q1, early Q2 of 2017, people were doing open crowd sales online anonymously without-- they basically set up a website and give their wallet address and say, “Send us your Ether and we’ll send you back this new coin.” What you’ve seen since then is there are many more private sales to accredited investors only getting done and fewer of these big open crowd sales. I think that is A, because more institutions investors have gotten interested in this space. B, from a regulatory perspective, it’s a safer approach, right? So if you do a fully open crowd sale with no KYC, you can get in a lot of trouble for doing an unregistered sales securities to unaccredited investors. Also, you have money transmitter, [inaudible] issues as well. Whereas if you do a private sales to accredited investors only, it’s possible that the token will eventually be deemed to security and you’ll bump off again a bunch of different issues. But those two which are probably the most serious for issuers or at least the ones that they personally can potentially get in the most trouble for, outside of stuff like fraud of course, those you get around. Another thing is these sales are just-- they’re definitely a little more borderly now than they were.

Rohit 32:00

Okay. Super. And then yeah, please go ahead. Two more mini sections to cover, so sorry for interrupting.

Travis 32:06

Okay. What time does this end, Rohit?

Rohit 32:11

We have 10 to 12 more minutes. Yeah.

Travis 32:14

Okay. Okay. So this is just a slide on what we’re looking at and excited about on the VC side, investing in equity companies. So traditionally, we’ve been very focused on investing in the infrastructure in this space and we continue to do so. So a lot of those are exchanges and wallets, right? Basically, the companies that are creating the on-ramps and off-ramps for digital currency and making it possible for people to hold and use this stuff. So we’ve invested in almost 20 exchanges all over the world, including companies like Coinbase, and Circle, and Kraken, and dozens of others, and the wallets, stuff like Ledger, which make hardware wallets and Blockchain.info which is a web-based wallet. We believe that that’s kind of one of the first pieces that needs to get built. And as people speculate, those companies are going to see tremendous traction. And it’s somewhat agnostic as to which cryptocurrencies succeed as well.

Travis 33:20

Other stuff that we’re interested in is custody solutions for big enterprises and big holders. For example, VCs are interested in investing in these assets. And of the key questions asked is, “Well, how do I hold it?” Right? Basically, Blockchain networks are incredibly secure, but the endpoints are possible to hack. And if somebody breaks into your computer and has access to your cryptocurrency wallet and they send your cryptocurrency, those transactions are irreversible and so it’s gone. And some of these wallets are good for retail folks, but they’re just not that good for enterprises. So like VCs who are moving into this space and big financial institutions that want to buy a lot of Bitcoin, they need better custody solutions. And so there are a bunch of companies now that are building those.

Travis 34:19

We have long believed that Blockchains, one of their first use cases decides kind of a digital of all this case and the speculation is across border payments. So we continue to invest in companies that are making it possible to use Bitcoin or other assets to send money internationally in a way that [inaudible] use for individuals. So there are companies like Oberon, Veeam, and BitPay, and a bunch of others doing this. I think a lot of the interest is then just on Fintech applications. But I think over the longer term, Blockchains are going to completely offer some of the business models in a wide variety of industries. Stuff like healthcare, and energy, and supply chain, etc. So we’re excited about those applications as well.

Travis 35:13

So touched on a lot of regulatory stuff over the course of this. There’s dozens of specific regulatory issues that touched this stuff. But what I’ll just talk about briefly is the fact that different governments all over the world have taken very different approaches to how they want to freeze Bitcoin and ICOs. So countries like China that have aggressively cracked down. So they basically shut down all the digital currency exchanges late last year because they want to make sure that Bitcoin is not being used for capital controls. They also outlawed ICOs because there was actually an extraordinary amount of fraud in some of the smaller cities in China around ICOs. By the way, Fred Wilson had a great quote a few years ago where he said, “Anything that China bans, invest in.” So examples of that include stuff like Google and Facebook over the years.

Travis 36:24

So then you have countries like Japan on the opposite end of the spectrum that have said, “Look, this technology is going to be revolutionary. Cryptocurrencies are going to change the world. They’re coming. We don’t want to be left behind because the governments and the regulators feel scared and threatened. We want to support innovation.” And so they actually created a licensing regime whereby the big exchanges in Japan can get licensed and regulated and show that they have the right security procedures in place, that they have the right KYC procedures in place, etc, etc. And so these changes there are doing extraordinarily well because of that. Companies like Korea have been kind of in the middle just because the situation locally has been a little different. So they really saw a crazy speculative mania last year. So yeah. Why don’t I pause there? We don’t have that much time left. I’ll take a few more questions.

Rohit 37:30

Okay. And when would you put-- you have a couple of bullets there about SEC, and the IRS, and the US-specific regulatory state of affairs. So as in, if you are monitoring something in particular, what is that, from a regulatory standpoint? As in, in terms of how the evolution of regulatory state of affairs would be over the next 12 months or so, particularly in the US and a couple of other geographies?

Travis 38:01

Yeah. So I think that in the US, the SEC has started to crack down on ICOs. I think that a lot of these cryptoassets will, unfortunately, eventually be deemed securities, even though they’re really a completely new type of asset. And it would be best if the regulators were-- definitely did everything they can to suss out and prevent future frauds, but didn’t bring the hammer down on innovation. But it does look like that they’re poised to come down pretty hard this year. And so I think that the ICO market is going to slow down a lot. On the other hand, I mean, it’s pretty clear at this point that Bitcoin and other assets that aren’t going to be treated as securities, ones that are more like commodities, are legal. And that they’re going to be allowed to proliferate. That the companies that interact with them are going to have to abide by state and federal regulations as they apply to other financial companies, but that’s happening. I think that another thing that will be interesting to watch is a lot of people made a lot of money last year in cryptocurrencies and the IRS is going to be keen to make sure that they get their share of that. So folks better report their gains.

Rohit 39:32

Yes. Actually, coincidentally, we had kind of explored a webinar last month where this came up in terms of what changes in the new tax reform affect the people who own cryptocurrencies. I think there is something as-- I’m not a tax expert or an accountant, but [inaudible]. But the summary was that cryptocurrencies will not be allowed in what the IRS calls it like-kind exchanges, which in other words, use [inaudible] one currency and buy another-- using the same kind of capital, so that becomes a taxable one. So--

Travis 40:15

Yeah. By the way, they never really were. It never was clear that when you traded Bitcoins for Ether, that that was not taxable, but what kind of exchange. It probably was always taxable, but now it’s very explicit.

Rohit 40:33

Yep. Yep. Yes, indeed. I think there are a few questions which are kind of more I feel related, as in, around the kind of growing, kind of need to have regulated ICOs. And do you see kind of building blocks or any specific movements in the ecosystem around that?

Travis 40:59

Well, there are platforms for viewing these sales compliantly. So for example, there is a company called CoinList, which offers compliance tools and front end and they do marketing in some cases for compliant ICOs. There are folks who are launching or converting what are known as ATSs, Alternative Trading Systems, which are license exchanges, but not national exchanges that can trade securities. So things like GDAX, like Coinbase, and Kraken, and Poloniex, and Bittrex, none of these guys have their ATS license. Meaning, if any of the tokens on those platforms are deemed securities, they can get into trouble.

Travis 41:47

So some of these folks, like Circle, which is a company we’re investors in, bought Poloniex and they said publicly that they plan to get their ATS for Poloniex so that Poloniex can allow for trading in tokenized securities. There’s a whole host of questions around whether or not the, one, token is treated as a security. There’re actually any benefits for it being on a Blockchain. I mean, a lot of the benefits have to do with the fact that if you have something like Bitcoin, I can do whatever I want with it, nobody can stop me. And by the way, nobody even has to know that I’m holding it. So once you have tokenized security that comply with all the SEC’s rules, at least in the US, it’s not-- there may be some benefits to that, but it’s not totally clear that that’s going to be in order of magnitude, gain, and efficiency.

Rohit 42:50

Okay. Super. I think, we do have a ton of questions, Travis. I’ll probably email you them later and if and when you feel like responding to them, that would be awesome. But we will wrap it up right now. I want to be very careful of your time and everybody else’s time online. So again, Travis, thank you for the time today. And thank you to everyone who joined us in. As you will see on the screen, my contact information is there. So before we wrap up Travis, any last comments or any last thing that you would want to add?

Travis 43:27

No. Thank you all for listening. If you want to keep track of what we’re up to, you can follow us on Twitter, it’s @DCGco or you can follow me @TravisScher.

Rohit 43:38

Okay. Super. I think there’s a good news here that what we have seen in 2017 is that, in some respects, kind of a proof point that the technology we are all excited about does indeed have a huge potential. It is still nascent and there are many things in the works, so there’s the upside thing to be. Many of you have requested access to this webinar presentation. I see a bunch of emails in my inbox. We will follow up with the link of the presentation in the next few days. Thank you so much for joining us again today. We are always looking for topics and speakers like Travis. And if you know anyone or anybody who wishes to volunteer, send me an email. So we’ll wrap right here. And so [in behalf of?] SharesPost, thank you very much. Have a great spring ahead. Thank you.

CONFLICTS:

This report is being published by SharesPost Financial Corporation, member FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management, LLC., an investment adviser registered with the Securities and Exchange Commission, are wholly owned subsidiaries of SharesPost, Inc. SP Investments Management, LLC is the investment manager of the SharesPost 100 Fund, a Registered Investment Company, and other funds. These entities and funds (hereafter “SharesPost”) does, seeks to do business with, owns and/or seeks to own positions in the companies covered in this research report. Consequently, investors should be aware that SharesPost has a conflict of interest that could affect the objectivity of this report. This report was originally prepared and distributed to institutional and certain private clients of SharesPost Financial Corporation. Recipients who are not market professional or clients of SharesPost Financial Corporation should seek the advice of their own personal financial advisors before making any investment decisions based on this report. None of the information contained in this report represents an offer to buy or sell or a solicitation of an offer to buy or sell any security and no buy or sell recommendation should be implied, nor shall there be any sale of these securities in any state or governmental jurisdiction in which said offer, solicitation or sale would be unlawful under the securities laws of any such jurisdiction.

This report does not constitute an offer to provide investment advice or service. Registered representatives of SharesPost Financial Corporation, do not (1) advise any member on the merits or advisability of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax or transactional advisory services. Information regarding companies in the SharesPost 100 List available on the website has been collected from or generated from publicly available sources. The availability of company information does not indicate that such company has endorsed, supports or otherwise participates with SharesPost. Company “thesis” are the opinions of SharesPost and are not recommendations to buy, sell or hold any security of such company. Investors should be aware that the SharesPost 100 Fund (the “Fund”) may or may not have an ownership interest any of the issuers that are discussed in the report at any given point in time. Accordingly, investors should not rely on the content of this report when deciding whether to buy, hold, or sell interests in the Fund. Instead, investors are encouraged to do their own independent research. Before investing in the Fund, Investors are cautioned to consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus with this and other information about the Fund, please visit www.sharespost100fund.com. Read the prospectus carefully before investing.

ANALYST CERTIFICATION:

The analyst(s) certifies that the views expressed in this report accurately reflect the personal views of such analyst(s) about any and all of the subject securities or issuers and that no part of such analyst(s) compensation was, is, or will be, directly or indirectly, related to the specific views contained in this report. Analyst compensation is based upon various factors, including the overall performance of SharesPost, Inc. and its subsidiaries, and the performance and productivity of such analyst including feedback from clients of SharesPost Financial Corporation and other stakeholders in our ecosystem, the quality of such analyst’s research and the analyst’s contribution to the grown and development of our overall research effort. Analyst compensation is derived from all revenue sources of SharesPost, Inc., including brokerage sales.

DISCLAIMER:

This report does not contain a complete analysis of every material fact regarding any issuer, industry or security. The opinions expressed in this report reflect our judgment at this date and are subject to change. The information contained in this report has been obtained from sources we consider to be reliable, however, we cannot guarantee the accuracy of all such information. Any securities offered are offered by SharesPost Financial Corporation. SharesPost Financial Corporation and SP Investments Management, LLC are wholly owned subsidiaries of SharesPost, Inc. Certain affiliates of these entities may act as principals in such transactions. Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative and involves a high degree of risk and should only be considered a long-term investment.

You must be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and you should complete your own independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or other investment advice. Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment. SharesPost, the SharesPost logo, My SharesPost, SharesPost Index, SharesPost Investment Management, SharesPost 100 Fund, and SharesPost 100 List are all registered trademarks of SharesPost, Inc. All other trademarks are the property of their respective owners.

Contact

For information on research and analysis

Rohit Kulkarni
Managing Director
Private Investment Research Group
(650) 300-5128
Email
CONFLICTS:

This report is being published by SharesPost Financial Corporation, member FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management, LLC., an investment adviser registered with the Securities and Exchange Commission, are wholly owned subsidiaries of SharesPost, Inc. SP Investments Management, LLC is the investment manager of the SharesPost 100 Fund, a Registered Investment Company, and other funds. These entities and funds (hereafter “SharesPost”) does, seeks to do business with, owns and/or seeks to own positions in the companies covered in this research report. Consequently, investors should be aware that SharesPost has a conflict of interest that could affect the objectivity of this report. This report was originally prepared and distributed to institutional and certain private clients of SharesPost Financial Corporation. Recipients who are not market professional or clients of SharesPost Financial Corporation should seek the advice of their own personal financial advisors before making any investment decisions based on this report. None of the information contained in this report represents an offer to buy or sell or a solicitation of an offer to buy or sell any security and no buy or sell recommendation should be implied, nor shall there be any sale of these securities in any state or governmental jurisdiction in which said offer, solicitation or sale would be unlawful under the securities laws of any such jurisdiction.

This report does not constitute an offer to provide investment advice or service. Registered representatives of SharesPost Financial Corporation, do not (1) advise any member on the merits or advisability of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax or transactional advisory services. Information regarding companies in the SharesPost 100 List available on the website has been collected from or generated from publicly available sources. The availability of company information does not indicate that such company has endorsed, supports or otherwise participates with SharesPost. Company “thesis” are the opinions of SharesPost and are not recommendations to buy, sell or hold any security of such company. Investors should be aware that the SharesPost 100 Fund (the “Fund”) may or may not have an ownership interest any of the issuers that are discussed in the report at any given point in time. Accordingly, investors should not rely on the content of this report when deciding whether to buy, hold, or sell interests in the Fund. Instead, investors are encouraged to do their own independent research. Before investing in the Fund, Investors are cautioned to consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus with this and other information about the Fund, please visit www.sharespost100fund.com. Read the prospectus carefully before investing.

ANALYST CERTIFICATION:

The analyst(s) certifies that the views expressed in this report accurately reflect the personal views of such analyst(s) about any and all of the subject securities or issuers and that no part of such analyst(s) compensation was, is, or will be, directly or indirectly, related to the specific views contained in this report. Analyst compensation is based upon various factors, including the overall performance of SharesPost, Inc. and its subsidiaries, and the performance and productivity of such analyst including feedback from clients of SharesPost Financial Corporation and other stakeholders in our ecosystem, the quality of such analyst’s research and the analyst’s contribution to the grown and development of our overall research effort. Analyst compensation is derived from all revenue sources of SharesPost, Inc., including brokerage sales.

DISCLAIMER:

This report does not contain a complete analysis of every material fact regarding any issuer, industry or security. The opinions expressed in this report reflect our judgment at this date and are subject to change. The information contained in this report has been obtained from sources we consider to be reliable, however, we cannot guarantee the accuracy of all such information. Any securities offered are offered by SharesPost Financial Corporation. SharesPost Financial Corporation and SP Investments Management, LLC are wholly owned subsidiaries of SharesPost, Inc. Certain affiliates of these entities may act as principals in such transactions. Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative and involves a high degree of risk and should only be considered a long-term investment.

You must be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and you should complete your own independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or other investment advice. Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment. SharesPost, the SharesPost logo, My SharesPost, SharesPost Index, SharesPost Investment Management, SharesPost 100 Fund, and SharesPost 100 List are all registered trademarks of SharesPost, Inc. All other trademarks are the property of their respective owners.