{"id":14706,"date":"2018-07-16T18:09:05","date_gmt":"2018-07-17T01:09:05","guid":{"rendered":"https:\/\/foundersnetwork.com\/?p=14706"},"modified":"2018-11-25T18:01:07","modified_gmt":"2018-11-26T02:01:07","slug":"blockchain-startups-sheri-kaiserman","status":"publish","type":"post","link":"https:\/\/foundersnetwork.com\/blockchain-startups-sheri-kaiserman\/","title":{"rendered":"Is Blockchain Right for Your Startup?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">In 2013, <strong><a href=\"https:\/\/www.linkedin.com\/in\/sheri-kaiserman-8390081\/\">Sheri Kaiserman<\/a> published the <\/strong><\/span><strong><a href=\"https:\/\/www.scribd.com\/doc\/188644617\/Bitcoin-Intrinsic-Value-Wedbush-Report-December-2013\">first Wall Street analysis<\/a><\/strong><span style=\"font-weight: 400;\"><strong> of Bitcoin\u2019s value<\/strong>. And while \u201cThe report didn\u2019t explicitly recommend buying the cryptocurrency, it did say huge gains were possible\u2014 and investors who dove in that day have seen a more than <\/span><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2018-03-20\/wall-street-bitcoin-pioneer-quits-wedbush-for-blockchain-startup\"><span style=\"font-weight: 400;\">600 percent return<\/span><\/a><span style=\"font-weight: 400;\">.\u201d 5 years later, Kaiserman left her position as Wedbush Securities Inc.\u2019s Head of Equities to co-found <\/span><a href=\"http:\/\/www.maco.la\/\"><span style=\"font-weight: 400;\">Maco.la<\/span><\/a><span style=\"font-weight: 400;\">, a blockchain-focused investment fund and advisory firm.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On our <\/span><a href=\"https:\/\/foundersnetwork.com\/platform\/\"><span style=\"font-weight: 400;\">members only forum<\/span><\/a><span style=\"font-weight: 400;\">, we\u2019ve noticed several discussions between founders asking if they should be incorporating blockchain technology into their product. So, <a href=\"https:\/\/foundersnetwork.com\/\">Edge<\/a> tapped Sheri\u2019s expertise for a breakdown of the blockchain landscape from a founder\u2019s lens. <strong>Read on for her thoughts on:<\/strong><\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">5 major implications of The Blockchain<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Why founders need to know how the blockchain will impact their startups<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">How to determine if blockchain technology is right for your startup<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">What blockchain investors are looking for<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">An assessment of the hype around the technology<\/span><\/li>\n<\/ul>\n<h3><b>5 Major Implications of The Blockchain<\/b><\/h3>\n<h4><b>It Significantly Reduces Costs and Increases Accountability<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">Being able to have one accounting ledger that all involved parties access and trust will\u00a0<\/span><span style=\"font-weight: 400;\">eliminate the duplicative processes and costs involved with each party needing\u00a0<\/span><span style=\"font-weight: 400;\">to maintain their own accounting ledger. \u00a0This will also increase transparency\u00a0<\/span><span style=\"font-weight: 400;\">and therefore accountability.<\/span><\/p>\n<h4><b>It Saves Time<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">Since all parties are utilizing a shared ledger, there is no need to reconcile anything between counterparties. \u00a0Settlement for any transaction can be immediate. Additionally, with the transparency enabled by blockchain, the tracing and tracking of anything is more transparent and efficient. \u00a0All involved in a supply chain will understand where the goods are, where they came from, know the history of the experience of the journey of those goods and benefit from the streamlining of manual processes. \u00a0Let\u2019s look at Walmart as an example. They have been working on a proof of concept with IBM for tracking pork they buy from China. If there\u2019s an issue with a tainted batch they have sold in any of their products and they need to find out where it came from, it previously would have taken them a week. With blockchain technology, it takes them minutes.<\/span><\/p>\n<h4><b>It Fosters Financial Inclusion<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">There are two billion people out there that don\u2019t have bank accounts. And yes some are millennials that don\u2019t trust banks, but many of them can\u2019t get bank accounts because it\u2019s not cost effective for banks to service low account balance customers. <strong>With blockchain, everyone who has a smartphone and an internet connection can access the financial system.<\/strong><\/span><\/p>\n<h4><b>It Makes the Internet More Secure<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">Right now there are so many issues with security on the internet, and blockchain can help it become a more trusted infrastructure. And that\u2019s really exciting, especially when you\u2019re thinking about the Internet of Things and machine to machine transactions. Cybersecurity threats are scary and blockchain helps with authenticating whoever or whatever is interacting to make sure something on the network isn\u2019t corrupt. Or having transparency and provenance of a part coming for a military plane and knowing it hasn\u2019t been tampered with. <strong>The ability to trace, to have provenance, to authenticate identity, and have transparency online and along a supply chain will lead to less fraud and online vulnerabilities.<\/strong><\/span><\/p>\n<h4><b>It Solves Global Issues<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">There are are 1.1 billion people around the world who do not have any form of identity. This means they don&#8217;t have access to many services and basic human rights that come with being able to prove who you are. <strong>The blockchain solution for identity will include self sovereign identities<\/strong>. As a user, you\u2019ll be in control of all the proofs of identity that have been issued to you and no one will be able to take that away from you. \u00a0Also, for those in developing countries, they can build a whole repertoire of interactions with people who know them and use that to establish a relationship with a company that has no prior experience with them. Eventually, people will be starting life out with their birth certificate on the blockchain. Refugees will ultimately have access to be able to prove who they are. <\/span><\/p>\n<blockquote>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">&#8220;With blockchain, everyone who has a smartphone and an internet connection can access the financial system.&#8221;\u00a0<a class=\"ProfileHeaderCard-screennameLink u-linkComplex js-nav\" href=\"https:\/\/twitter.com\/Sherikaiserman\"><span class=\"username u-dir\" dir=\"ltr\">@<b class=\"u-linkComplex-target\">Sherikaiserman<\/b><\/span><\/a><\/span><\/p>\n<\/blockquote>\n<h3><b>Why Founders Need to Know How The Blockchain Will Impact Their Startup<\/b><\/h3>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Most businesses are starting to realize they have to understand what blockchain is and how it will impact their business, whether it\u2019s from a cost savings standpoint or a revenue potential opportunity. <strong>There are some businesses that are going to be totally disrupted by blockchain<\/strong>. If those companies don\u2019t educate themselves on what it truly is and don\u2019t conceive a strategy for how to blockchain enable their business, which is at risk of becoming extinct, they are in trouble. Those are really interesting projects we love to take on.<\/span><\/p>\n<blockquote>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">&#8220;Most businesses are starting to realize they have to understand what blockchain is and how it will impact their business.&#8221;\u00a0\u00a0<a class=\"ProfileHeaderCard-screennameLink u-linkComplex js-nav\" href=\"https:\/\/twitter.com\/Sherikaiserman\"><span class=\"username u-dir\" dir=\"ltr\">@<b class=\"u-linkComplex-target\">Sherikaiserman<\/b><\/span><\/a><\/span><\/p>\n<\/blockquote>\n<h3><b>Is Blockchain Technology Right for Your Startup? Do These 3 Things To Decide:<\/b><\/h3>\n<h4><b>Understand the Technology<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">First, make sure that you understand what blockchain technology is and how it is connected to cryptocurrencies. Also understand that there are different types of blockchain: public and \u00a0permissionless, private and permissioned, and hybrid. <strong>Understand that Blockchain is not right for every business.<\/strong><\/span><\/p>\n<h4><b>Consult an Expert<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">Second, have what I call a \u201cconceive session\u201d with an expert to help develop ideas for how blockchain technology can positively impact your business from a cost savings and efficiency standpoint to potentially creating an additional revenue generating model.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">My recommended reading on the topic is <\/span><span style=\"font-weight: 400;\">B<\/span><span style=\"font-weight: 400;\">lockchain Revolution<\/span><span style=\"font-weight: 400;\"> by Don Tapscott and Alex Tapscott, as a starting place to understand the vastness of how blockchain technology can ultimately impact the world. <a href=\"https:\/\/www.coindesk.com\/\">Coindesk.com<\/a> is a great resource to get educated. Also, anytime you hear about something of interest, Google or YouTube it! There is so much information out there about all of this.<\/span><\/p>\n<h4><b>Learn about Tokenomics<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">Third, once you learn about Tokenomics, determine if having a token economy can benefit your business model. \u00a0More and more existing businesses are also starting to look at tokenizing their equity to do a capital raise.<\/span><\/p>\n<blockquote>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">&#8220;I recommended reading <\/span><span style=\"font-weight: 400;\">Blockchain Revolution<\/span><span style=\"font-weight: 400;\"> by Don Tapscott and Alex Tapscott\u00a0as a starting place to understand the vastness of how blockchain technology can ultimately impact the world.&#8221;\u00a0<a class=\"ProfileHeaderCard-screennameLink u-linkComplex js-nav\" href=\"https:\/\/twitter.com\/Sherikaiserman\"><span class=\"username u-dir\" dir=\"ltr\">@<b class=\"u-linkComplex-target\">Sherikaiserman<\/b><\/span><\/a><\/span><\/p>\n<\/blockquote>\n<h3><b>What Blockchain Investors are Looking For<\/b><\/h3>\n<h4><b>Equity + Tokens of Companies Solving Real Problems<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">At Maco.la, we\u2019re looking to invest in the equity of companies that are providing the tools and services that enable the broader adoption of blockchain into the global economy. \u00a0Additionally, we look for opportunities to invest in disruptive business models that are being built by proven management teams. <\/span><\/p>\n<h4><b>About Tokens<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">There are different kinds of tokens and for simplicity sake I will narrow the discussion to utility tokens and security tokens. \u00a0A utility token gives rights to interact within a particular network\/company and is also used as an incentive to align the interests of all stakeholders. \u00a0<strong>For security tokens, I would like to make two clarifying distinctions to clear some confusion:<\/strong> There is a difference between a security token offering and a security token. A security token offering refers to the way any token is sold to investors; the token sale must be done in accordance to SEC securities regulations. \u00a0A security token represents some form of ownership and is akin to traditional investment securities. <\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>Typically, companies issuing tokens will retain a percentage of them on their balance sheet<\/strong>. \u00a0As an equity investor, Maco.la also gets exposure to the token via the company\u2019s retained token ownership. \u00a0Additionally, we are happy to buy equity that has been tokenized and will also accept any kind of token as a supplemental position to our equity. \u00a0<\/span><\/p>\n<blockquote>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">&#8220;At Maco.la, we\u2019re looking to invest in the equity of companies that are providing the tools and services that enable the broader adoption of blockchain into the global economy.&#8221;<a class=\"ProfileHeaderCard-screennameLink u-linkComplex js-nav\" href=\"https:\/\/twitter.com\/Sherikaiserman\"><span class=\"username u-dir\" dir=\"ltr\">@<b class=\"u-linkComplex-target\">Sherikaiserman<\/b><\/span><\/a><\/span><\/p>\n<\/blockquote>\n<h3><b>Is Blockchain Overhyped? <\/b><\/h3>\n<h4><b>Hype + Capital = Innovation<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">I think <strong>new technologies often get overhyped, and as a result bubbles form.<\/strong> But that\u2019s all part of the healthy evolution of a new technology\u2019s lifecycle. <strong>The bubble allows so much capital to flow in to fuel the development of the technology<\/strong>. And then when it gets crazy silly, the bubble bursts, which is not fun. But just take a look at internet stocks from the dotcom bubble. They went up thousands of percents, then crashed and lost 90% of their value. <strong>Now look at the value of the companies that survived that crash\u2014 their value is 10X greater than it ever was.<\/strong> And I see the same thing happening with crypto. Maco.la typically won\u2019t invest unless proofs of concepts have already been done with several customers and the company is more than just a whitepaper representing a napkin idea. \u00a0Clearly, as in the dot com bust, it is important for these companies to have enough money to survive through the downturn.<\/span><\/p>\n<h4><b>It is Still Early<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">With blockchain, we are still so early. When you look at the how long it actually took for the internet to develop that helps put things in perspective. \u00a0However, because of the existence of <\/span><span style=\"font-weight: 400;\">the Internet, new technologies develop much more quickly.<\/span><\/p>\n<h4><b>By the Numbers<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">The market cap for the whole sector is around $255B \u2014 contrast that to the market cap of just Amazon which is $880bb. Any one particular coin could look overvalued but the fact of the matter is<strong> the market as a whole is still in its infancy.<\/strong> <strong>The outstanding question for me is how much of the value will accrue in the equity vs. the tokens.<\/strong> \u00a0Look at the difference in one of the highest valued equity based blockchain businesses, Coinbase. The last valuation was cited to be $8.5bb. But the valuation of bitcoin network as measured by the price of its token is $110B. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">The token is part of the technology protocol and having value accrue to the token democratizes access to successful investment returns vs having the success being mainly enjoyed by the founders and the elite investors who had access to investing. <strong>I think the ones who are really going to win are those who aren\u2019t greedy and are able to build entities that will survive beyond the life of the founder.<\/strong><\/span><\/p>\n<blockquote>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">&#8220;I think the ones who are really going to win are those who aren\u2019t greedy and are able to build entities that will survive beyond the life of the founder.&#8221;\u00a0<a class=\"ProfileHeaderCard-screennameLink u-linkComplex js-nav\" href=\"https:\/\/twitter.com\/Sherikaiserman\"><span class=\"username u-dir\" dir=\"ltr\">@<b class=\"u-linkComplex-target\">Sherikaiserman<\/b><\/span><\/a><\/span><\/p>\n<\/blockquote>\n<h4>Sheri will be sitting down with our LA Chapter of founders on July 19th, 2018 for an intimate roundtable on blockchain technology and an assessment of the investment landscape. If you are a founder, <a href=\"https:\/\/www.eventbrite.com\/e\/la-roundtable-ft-blockchain-investor-sheri-kaiserman-founder-macola-tickets-47032091251\">please RSVP here to join.<\/a><\/h4>\n","protected":false},"excerpt":{"rendered":"<p>In 2013, Sheri Kaiserman published the first Wall Street analysis of Bitcoin\u2019s value. And while \u201cThe report didn\u2019t explicitly recommend buying the cryptocurrency, it did say huge gains were possible\u2014 &#8230; <\/p>\n<div><a href=\"https:\/\/foundersnetwork.com\/blockchain-startups-sheri-kaiserman\/\" class=\"more-link\">Read More<\/a><\/div>\n","protected":false},"author":31,"featured_media":14707,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_price":"","_stock":"","_tribe_ticket_header":"","_tribe_default_ticket_provider":"","_tribe_ticket_capacity":"0","_ticket_start_date":"","_ticket_end_date":"","_tribe_ticket_show_description":"","_tribe_ticket_show_not_going":false,"_tribe_ticket_use_global_stock":"","_tribe_ticket_global_stock_level":"","_global_stock_mode":"","_global_stock_cap":"","_tribe_rsvp_for_event":"","_tribe_ticket_going_count":"","_tribe_ticket_not_going_count":"","_tribe_tickets_list":"[]","_tribe_ticket_has_attendee_info_fields":false,"footnotes":""},"categories":[7171,144],"tags":[7158,1348],"table_tags":[],"class_list":["post-14706","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-startup-investing-and-funding","category-tech-startup-advice","tag-blockchain","tag-los-angeles"],"acf":[],"featured_image_data":{"src":"https:\/\/foundersnetwork.com\/wp-content\/uploads\/2018\/07\/1_IWIQaQL56RDZ2MMrScGzAg.png","alt":"Blockchain Sheri Kaiserman","caption":""},"_links":{"self":[{"href":"https:\/\/foundersnetwork.com\/wp-json\/wp\/v2\/posts\/14706","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/foundersnetwork.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/foundersnetwork.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/foundersnetwork.com\/wp-json\/wp\/v2\/users\/31"}],"replies":[{"embeddable":true,"href":"https:\/\/foundersnetwork.com\/wp-json\/wp\/v2\/comments?post=14706"}],"version-history":[{"count":0,"href":"https:\/\/foundersnetwork.com\/wp-json\/wp\/v2\/posts\/14706\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/foundersnetwork.com\/wp-json\/wp\/v2\/media\/14707"}],"wp:attachment":[{"href":"https:\/\/foundersnetwork.com\/wp-json\/wp\/v2\/media?parent=14706"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/foundersnetwork.com\/wp-json\/wp\/v2\/categories?post=14706"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/foundersnetwork.com\/wp-json\/wp\/v2\/tags?post=14706"},{"taxonomy":"table_tags","embeddable":true,"href":"https:\/\/foundersnetwork.com\/wp-json\/wp\/v2\/table_tags?post=14706"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}