Name: Balancing The Ledger: Andra Capital's Haydar Haba Talks Silicon Valley Coin
Uploaded: 2018-08-09
Duration: 10 min 24 s
Description: Silicon Valley Coin, which launched a $1B token sale on July 2nd, aims to democratize venture capital. Managing Partner Haydar Haba gives Fortune the details.

[ MUSIC ] Welcome to Balancing the Ledger where tech and finance intersect. I'm Jen Wieczner. And I'm Jeff Roberts. And today we're joined by Hadar Haba, the managing partner of Intercapital which is in process of doing a one Billion dollar token sale for its coin Silicon Valley Coin. Welcome Haydar. Thank you. Thanks for joining us. So tell us a little bit about what you're trying to do with Silicon Valley Coin. What exactly is this? Yeah, we had a vision about taking large asset classes that are currently unavailable to average investors. Put them in a fund and tokenize them, and using the blockchain technology, and make them available to global investors worldwide, with some kind of liquidity by putting them on global digital exchanges. That's the mission and vision of the company, and we're starting with an asset class which is high tech growth companies. Pre- IPOs. See these are private companies, and creating a fund, and tokenizing that fund, I'm putting in the blockchain using Silicon Valley coin, and we announced that on July 2nd. A $ 1 billion top security token offering. Because right now to get your hands on a hot start up you generally need to be part of a fund, or be very rich That's right. And in your view, by tokenizing it to us it will be more widely accessible? Absolutely, so I used to call it, this is a big boys club only. So if they have to check of $ 300 million and stomach to wait ten years to get your money out, You had no chance to come in these high flying companies that we call them unicorns. And these are all pre- IP, all with a clear path to some kind of liquidity or public markets. But I guess this begs the question, how do you get the tokens then? So the tokens as part of the innovation that we created is requires to I think one, is a smart contracts that give you the ownership in this [ UNKNOWN ] for every You already get one LP position in our Kuman master plan but at the same time it has all the rules and regulation for permissions for global investors to be able to come and buy this token and still in compliance with the security laws and regulation for each country we do the offering. So people who buy your token, what kinds of companies can they expect to owe? I mean, are we talking Uber, Airbnb, some of the companies that are the most highly anticipated to go IPO in the next few years? That's correct. So we create a basket about 20 to 30 year of these blue chip pre IPO companies. We'd like to take companies right after this year round, where the most of the growth cycles are to happened And we exit right after the IPO or exit. We don't keep it when we are in the public market. So if you look at private companies, there was some news this week. Elon Musk tweeted that he wants to take or he wants to take Tesla private. Would you invest in Tesla? I love Tesla, I love Elon Musk, and I think he should definitely consider the blockchain and [ UNKNOWN ] of assets for And by taking it away from short sellers and putting it to something similar to a Silicon Valley coin. We call it the Tesla coin. The Tesla token. Yeah, that's Tesla token, yes. So that's actually a possibility you see as- Not impossible. Yeah, so there- Absolutely. Tokenized ownership. I mean do you see that in general as the future of Stocks? I see this, if you look at over the last 100 years, mankind created all these rules to really back our public stock offering, but there is no instruments to do private offerings for, let's say, private equity or venture funds, or large iconic real estate assets. And I think blockchain will, especially if it's done properly in a compliant, well audited, well reported, and well administered funds can really service the globe in a much better way than our past public offering. Haydar, hang on, skeptics might say when the news came out of Silicon Valley Coin. They're like, This is just another layer, financial engineering. It's money on top of money. But the more you talk about it, it sounds like there's some distinct advantages your token over a strip of traditional kind of share a piece of equity. Can you sort of explain what the advantage of the token is over. Yeah, so the advantages are Really very large number. I give you an example. So when I used to run one of these companies, it used to take 90 days and $ 30, 000 to transfer my shares, my private shares to you for example. And now we can do it on the Blockchain in a matter of seconds Between the global investors and as long as we are in the permission or white list to be able to trade these securities. So in terms of speed is far more advantages, in terms of global reach you don't need to be on a specific trade you can trade it worldwide. In terms of. Creating value and the legal rules and to the smart contracts, this is by far better than anything out there. Does it even make a difference? If you can tokenize a company's shares does it even make a difference if your are private or public? Public? That's a really good question. In my view, twenty years from now, these private and public will go away and we're only going to have one high quality tokenised ( g ) offering for these private, And there will be- Amazon coin- That's the future. But, for this to work there's a fair amount of technical sophistication you need the, probably the PCs are ready for this, to build a wallet but you also need the banks, the lawfirms and the rest of the ecosystem And the exchanges, so where will the trading farms be? Will it be NASDAQ or Coinbase or- We are in a starting place. We spent two years building all what you're indicating, you know, top tier auditor, and in our case we chose Deloitte and a fund administrator Apex, which is [ UNKNOWN ] and DLA is one of the best security legal firms. So it took times to get these high quality service providers to be part of this new generation I call of securities that we are offering. Also in terms of compliance reporting, we choose the best to be able to Deliver of high quality token offering to the market. And I start calling it this is a growth coins of the future. So, these are not coins backed by scarce city like Bit Coin and others, these are backed by real growth assets that are for every dollar you invest you get one LP position, Or share into this basket of these [ UNKNOWN ] And the exchange part of it, is that coming later or? Yeah so they've changed it upcoming right now there is several that are in final stages and you're gonna see in the next couple months mostly people like Nasdaq, Coinbase, [ UNKNOWN ] and several others [ UNKNOWN ] in Malta Australia coming, and turn the market. These are security exchanges that will be able to trade security tokens between global investors, and [ CROSSTALK ]. Silicon valley coins- Yeah, absolutely. As a security. We're talking to most of these people. What a lot of the exchanges have shied away from, doing what's called a security token because of the SEC See rules and people are afraid that could invite more regulation. Why are you leaning into that? Because the clarity came about a month ago from the SEC Chairman that said more coins should be security tokens. And we took that path from early on two years ago by defining our coin to be a security token because we believe this utility Game is going to be over very soon for most of the ICOs. And that's why we decided to take the security path. And now we're seeing most of the exchanges going away utility. Even like Coinbase, they went under, broke their dealer license, they're going to apply with therma and. And make it a security exchange, and we can see a lot more of these coming. And when are the tokens coming? The first report said they were just gonna be 500 million at some point this summer, but sounds like that's not quite right. When are the tokens actually [ CROSSTALK ]? So we announced on July 2nd through our private placement memorandum that we have a $ 1 billion offering. And the next two to three months we're gonna do our first closing, and we're going to deploy the capital into 20 to 25 companies that we already have, and to our IC committee. And the nav value of these coins will increase in price, and then when we do the second closing Few months after that you're gonna see appreciation and offerings .>> When will the tokens be in the wild ?>> I think it's in the next two or three months you see a full investment and >> At first they'll be restricted to creditor investors >> Yes .>> A year from now will be in the U. S. at least we'll be able to send >> Yes. In the U. S. it's only offered to qualified investors. With one year in lockup, and globally we're offered in over 50 countries to permitted investors and these permission roles are built in the smart contract and will be offered to these global investors. And we started the offering July 2nd. Yeah, and you've also engaged your offering to global investors. You're also looking for opportunities to invest in companies that are outside of the US. Some if these startups and pre IPO companies? Absolutely, so as long as it's growth tech companies, we're seeing some great companies coming out of China. Such as DJI and Ant Financials. I mean, there is plenty of great companies and very high growth coming out of China. So we're taking a closer look at those, but the majority of the companies that we're looking at are Silicon Valley growth tech companies [ UNKNOWN ]. Yeah, so it sounds like Silicon Valley coin but it's going much broader than actual Silicon Valley. That's right, that's right. Thank you so much, Hadar, for joining us. Thank you for your time, thank you. I'm Jen Wieczner. And I'm Jeff Roberts. For more Balancing the Ledger, please go to Fortune. com. We'll see you next time. [ MUSIC ]

Balancing The Ledger: Andra Capital's Haydar Haba Talks Silicon Valley Coin

Finance

Silicon Valley Coin, which launched a $1B token sale on July 2nd, aims to democratize venture capital. Managing Partner Haydar Haba gives Fortune the details.