BLLNR Talks To Daniel Santos Of Digitizing Assets
How and where to invest in the new wave of Cryptocurrency
- First and foremost, as the words cryptocurrency and blockchain are being floated around the business sphere so much at the moment, can you please explain in simple terms what your company is and how it uses this new technology?
We are an international consulting firm with our head office in Singapore. Our aim is to help small and medium sized businesses with a superior and flexible fund raising mechanism and international investor access using blockchain and smart contracts .
- How then do you differ from other companies also using this technology?
We use blockchain technology to disrupt the VC and PE game, giving liquidity and exits to early equity investors and protecting business owners from predatory VC and PE terms . We also allow business owners to clean up their cap table and regain control of their companies .
- How do you work with clients to reap the benefits of this technology?
We help business owners scale up their business and raise millions of US Dollars via creating dividend paying (“equity-like instrument “) or coupon (“bond-like” ) instruments using blockchain technology . We, in essence, digitize assets and fractionalise ownership of equity, assets (e.g. real assets such as real estate or, IP or data) or stake in a company's profits.
The beauty is that businesses can raise money without having to dilute equity. Moreover, we allow business owners to clean up their cap table and regain control of their company by offering early equity investors in their companies with exits via these instruments called “security tokens “.
In short we do the following :
1-Allow business owners to raise money on international markets in certain scenarios without equity dilution
2- Allow early equity investors with exits via security tokens and their associated liquidity
3- Allow business owners to clean up their cap table and regain control of their businesses
4- Provide liquidity, price discovery and transparency on equity prices and ownership.
5- Allow business owners to tap into multiple funding channels
- What one piece of advice would you have for investors looking to get into the cryptomarket?
I would advise investors to only look at asset backed tokens; that is digital assets that have real assets backing their value such as gold , real estate, company’s data (data is the new cash) and IP. An investor that wants to invest in a digital asset needs to be able to understand how to value it. We at Digitizing Assets (DA) can help in educating investors on how to value digital assets.
- Many people have called the cryptomarket a ‘bubble’ – what is your answer to that?
Interesting that you asked that as in July 2017 I was already addressing this question on Fintech news where I said that: “There is a bubble factor and there will be many tears along the way as the market matures and go through the natural cycle of greed, fear, and poor risk assessment.”
Moving on to 2018, I would say that the bubble burst and we saw a much needed correction. The big wave for 2019 will be with security tokens where companies will issue security tokens (tokenised capital markets products) to raise funding and this will present unprecedented investment opportunities and completely disrupt the VC and PE spaces.
- Last year saw major changes in the market with new laws being introduced, how has this changed the environment and has it affected the way you approach investors?
The tremendous returns on cryptocurrencies such as IOTA and Bitcoin, coupled with the fast and furious emergence and growth of ICOs in an unregulated market, has led to a vast majority of non-viable projects sucking up funding, or speculative crypto funds that are managed by inexperienced teams. The result is akin to a Wild West gamblers scenario when these alleged professionals should rightfully be serving as guardians of assets.
With every boom and bust, great opportunities also emerge. During the dot.com bubble era many companies’ worth were erroneously measured by website clicks, yet most went bust. However, great transformative tech companies such as Amazon and Google also emerged from the same eco-scape. The greatest value that the emergence of blockchain and the subsequent ICO market open is the opportunity to improve the traditional capital markets with transparent blockchain, smart contracts and liquidity.
We at DA are now able to provide investors with access to pre-IPO companies and to create exits and liquidity to previously locked markets. One just needs to recall that the investors who reaped the most from Facebook were the VCs who were able to tap into the pre-IPO growth stage of Facebook and cashed out at or immediately post-IPO. The new digital assets market opens up these same kinds of previously restricted opportunities to individual investors, family offices as well as institutions to access the growth of pre-IPO tech companies.
In a move towards greater security, regulation is also being introduced and custody businesses serve as further safety nets. This makes digital assets attractive even for institutional investors who may want to consider them as part of an alternative investment portfolio or as diversification into an uncorrelated asset class.
In the US, companies are now issuing security tokens under the JOBS act. This includes tokenised Reg A+ where companies can raise up to $75 million from retail as well as accredited investors and there is no lock-in periods. In Singapore, we expect MAS to make an announcement anytime regarding digital tokens regulation .
- You have a proven track record of spotting key crypto winners, including the likes of ETH, IOTA and BTC – how to you spot these sound investments and what do you look for?
I use my proprietary valuation model and price discovery mechanisms . The ability to value digital assets is what sets the winners apart.
- With so many changes over the past few years in the environment, what do you think 2019 will bring?
2019 will be the year of digital assets as an alternative asset class and the beginning of a multi-year boom of security tokens .