Fad or revolution? Utility or security token? Blockchain or bust?
These questions and many more were asked and answered by an expert panel that included legal mavens, a long-term investment banker and blockchain gurus. More than 100 startup founders and potential investors jostled for a decent seat in the trendy coworking space, Co, to hear the panel talk about Initial Coin Offerings (ICOs) and other blockchain-related investment topics.
After an introduction, including welcome words from HaTCH’s own partnership manager Oonagh Grace, the panel (moderated by Duane Morris & Selvam’s MD Krishna Ramachandra) got straight down to business covering topics such as the different classes of token assets that might be offered and how to view the various blockchain-based investments. There was a mythbusting air to proceedings as blockchain entrepreneurs, Floyd D’Costa and Karthik Iyer, Co-Founder of Investacrowd, Alice Chen, investment banker turned Principal of Vigilant Assets, Jonathan Chan, and Chairman of Duane Morris & Selvam, Leon Yee, got real about the opportunities and risks and covered expectations of people who viewed anything related to blockchain as the next big thing.
The assembled crowd grabbed a beer or a glass of bubbles and learned the following:
ICO shares two letters but nothing else with IPO; Initial Public Offerings are based on buying shares in companies that have achieved levels of growth or revenue that make them attractive enough to be listed on a public exchange (along with all the scrutiny that brings). ICOs are usually for unproven businesses to raise funds in a different way than the usual VC route. They offer a very different kind of potential return.
There are various different kinds of tokens: security tokens are backed by another asset that could be traded (a share in future profits, for example) and utility tokens are based on future access to a company’s product, such as a cup of coffee from a coffee shop.
The market is very new and general levels of understanding and awareness are uneven; there were some in the audience learning blockchain basics and some preparing for their own ICO.
It may be the wild west but it’s not unregulated. MAS is actively involved in licensing various parts of the blockchain value chain and is keeping a keen eye on the developing industry.
It may all seem new, intricate and jargon-fuelled (fungible assets, anyone?) but we shouldn’t write it off.
The question was asked "Fad or Revolution?" and ultimately the answer was “Both!” If you want to invest in shares of a company, do so. If you want to taste the future, and all it (possible) offers, make sure you don’t invest more than you can afford to lose.
As usual for a HaTCH happening it was a hot ticket and we look forward to seeing you next time. We’re bringing in some Silicon Valley talent later in the year to share market-making strategies and we’ll keep you updated on dates and times for future events.