The Pomp Podcast - #260: Andy Bromberg on How the Crypto Economy is Withstanding the Coronavirus Crisis

Episode Date: April 4, 2020

Andy Bromberg is the CEO of CoinList, a trusted platform for running compliant token sales. In this conversation, Andy and Anthony discuss crypto companies being pandemic proof, how investor communication has to change, what the difference in city-by-city responses has been, how Coinlist has been growing, and what is next for them over the coming months. =============================== BlockFi allows you to keep your crypto, put it up as collateral, and receive a USD loan funded directly to your bank account. Go to try.blockfi.com/get-50/?ref=pomp50 to get started with BlockFi today and earn up to $50 in BTC when you create an interest account and make a deposit of $250 or more. =============================== TaxBit is a refund-maximizing, cryptocurrency tax software you can depend on. Visit taxbit.com/invite/pomp and receive 10% off your tax plan today by signing up for a free trial. ===============================

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off The Chain, simply the best podcast in crypto. Let's kick this thing off. Andy Bromberg is the CEO of CoinList, a trusted platform for running compliant token sales. In this conversation, we discuss crypto companies being pandemic-proof, how investor communication has to change, what the difference in city-by-city responses has been, how CoinList has been growing, and what is next for them over the coming months. I really enjoyed this conversation with Andy, and I hope you do as well. But before we get into this episode, I want to quickly touch on the two sponsors for today. The first is BlockFi. BlockFi is running an awesome special right now, where if you put $250 into their interest-bearing account and hold it there for three months, they'll give you $50

in Bitcoin for free. That's right. Put $250 in, hold it for three months while you earn interest, and they'll give you $50 in Bitcoin for free. Pretty no brainer. You can use the link in the description to sign up to get this offering. The second sponsor is Taxbit. Taxbit helps you pay your taxes. That's right. If you go to taxbit.com slash invite slash pump, you'll get 10% off getting your taxes paid with a single click. They basically hook into all your exchanges, suck in the data, you hit generate report, and it automatically generates a report exactly what the IRS needs and tells you what you owe or what you're going to get back. So head on over to taxbit.com slash invite slash Pomp and get your crypto taxes paid today. All right, let's get

into this episode with Andy. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. I've got Andy here with me, who is in Phoenix right now uh thanks for doing this man thanks for having me yeah for sure you uh this is your second time uh coming on the podcast so uh we'll skip overall the uh the background uh maybe just give us kind

of an overview of uh coinless today and an update as to like where you guys are since the last time we talked yeah i know that was quite a while ago um and coinless has changed quite a bit uh back then our business was rock and sales for the top crypto projects and that remains the core of the business today. So starting with our first one back in 2017, Filecoin, we've done a whole bunch since Blockstack, Algorand, Nervos, and many others. Most recently, Solana ran their auction last week, which was very successful. We can talk about that a little bit. We've got some others coming up, including Celo. So that's still our core business. Since then, we've added a bunch of other business lines. And the biggest one coming up now is the CoinList Trade Exchange.

there's trade, primarily those that we've ran sales for, but also other crypto assets. And we've turned that on. They're starting to roll that out more aggressively. So from here forward, CoinList will be doing token sales, but also letting people trade crypto assets liquidly on the CoinList exchange. That's what we're focused on.

Got it. And so with that exchange, is the whole thought process that basically there will be any asset that can be exchanged there? So like more of a competitor, like the Coinbase's, Binance's, Gemini's of the world, or are these very specific types of crypto assets that will be traded? Yeah, so we will list those large cap ones like the Bitcoin, Ethereum, because people want to trade those. And if they're on our platform, you might as well let them. But the focus for us is going to be much more on the assets that we ran sales for.

So think about a Filecoin or a Solana or a Celo coming up. And the reason for that is actually really compelling. When you participate in a token sale before the token's liquid, which is how these sales on CoinList happen, at some point the token goes live. And it's typically this really messy process where you're going to get your tokens. So you, you know, sent $1,000 to some crypto project, and then a year later the project goes live and you have to generate a wallet. They reach out to you, they collect the wallet address, they send you the tokens to that wallet. It's really messy. it's a lot of copying and pasting of wallet addresses, which is scary for people to do,

and rightfully so. And so what we've developed instead is a really seamless process, where when you participate in one of these great projects on CoinList, then one day you just get an email that says, hey, your tokens are ready. If you want, we'll just drop them into your CoinList wallet. And so you can just say, okay. And then one day you'll get an email that says, hey, your 100 Filecoin tokens are now in your CoinList account. Just log in with the same username and password you used when you bought them and so there's no distribution process there and then the natural next step from that is to say and if you want to buy more or you want to sell the token bought just hit the button right here you're already on the coinless platform your tokens are already here no need to move them

around just transact and so our focus is going to be on trading for those assets where because we ran the sale all the users really easily have the tokens right there already and we can let them transact seamlessly instead of dealing with the token distribution process. Gotcha. And then what type of investors are you seeing either participating in the initial token sales or do you think you'll see on the exchange? Are these more traditional funds? Are they individuals, family offices? What are you seeing there? Yeah, it's hard to characterize because it's such a broad range. So a typical token sale will have hundreds or maybe over a thousand purchasers, people buying into the sale. And those range from a larger number of small dollar

investors. The small dollar investors could be random crypto fans anywhere over the world, or someone who works in technology and invests a little bit or works in the space and invests a little bit. And you start stepping up and you see crypto funds or crypto specific funds investing in token sales. And then you step up even higher in terms of dollar amounts and you see large venture funds, traditional hedge funds, family offices, endowments. So you get this spectrum. And unsurprisingly, it's a larger number of smaller dollar investors, and then a small number of really large investors. And that's what ends up coming together to make a token sale successful. Because for most of these projects, they have a dual goal with their

token sale. One, bring capital in to fund the development of the project. But two, distribute their token really broadly to a wide array of stakeholders. And so you want to hit both of those goals and get both sides of that distribution. Got it. That makes a lot of sense. And then in terms of where those investors are located, are these mostly U.S. based? Are you still seeing a lot of activity from Asia or kind of a good mix? Total mix. Yeah. So and again, it's hard to characterize. It depends so much on the community of that individual project. say that it varies from 70 30 u.s non-u.s to 30 70 u.s non-u.s um so you know we've got a natural user base in the united states by virtue of being an american company um but we have tons of users

from outside the u.s and in some sales that actually outweighs in fact for some of the sales that we run u.s users are not even allowed to participate so in those ones obviously it's 100% ex-US, but when they are, it varies between 70-30 each direction. And for the non-US participants, I would say it's mostly Asia and a pretty even split between Southeast Asia and Eastern Asia, and then a bunch of European investors, and then others scattered around the world. Got it. That makes sense. And I guess one of the things that I've been spending a lot of time thinking through, you're running one of these companies, and then obviously talk with a lot of other founders, is this idea that like crypto companies are pandemic proof. And this

speaks to one, the way that they work, right? So kind of a lot of remote work, the way that they communicate, they're based on a global basis. So they're kind of used to time zone differences and things like that. But then also, in times of global instability, there tends to be a lot more activity and interest in crypto and kind of digital assets in general. And so those companies are benefiting from the uncertainty as well. Or, you know, one, are you seeing that? And two, maybe elaborate a little bit on kind of like how you view the idea of like pandemic-proof companies? Yeah, I am absolutely seeing that. And I would actually take it a step further and think about it first from a philosophical lens that people building crypto companies, working in

crypto companies supporting this crypto movement are proponents of decentralization. I mean, that's what this is all about here. And you can talk about that in very practical terms, but I actually think it starts with epiphany that people have when they get interested in this space, which is the value of decentralization. Decentralization is a paradigm for everything, that perhaps some systems can be more effective when they are decentralized, when they're distributed, when they work by encouraging collaboration of a disparate set of entities instead of mandating it from a central authority. And so I think a lot of people in crypto, that switch has flipped. And they've said,

I am pro-decentralization. I believe in the power of a decentralized set of incentives to drive great performance. We've seen that with Bitcoin. We've seen that with other crypto assets. And so that then becomes a mentality. And what that then leads to is all these practical effects, these effects like being really comfortable with remote work or a partially remote team. being really comfortable with instability happening in certain parts of a sector and not letting that disturb the whole balance of it. And so I think it starts with that mentality,

but then absolutely on a practical level, a lot of crypto teams are distributed, even if your team itself is not distributed. So CoinList is typically based between San Francisco and New York. We've got offices in both places. Everyone we work with is all over the world. We work with issuers and investors

that are all over the entire globe. And so we're used to working in a decentralized way, even if our team is in one place or two places, you know, we have calls on at odd hours with people in every different time zone. We're used to that paradigm. And so that certainly is true. And I would agree. I think a lot of the benefit, and we can talk more about this too, a lot of the benefit

that we've been pitched for crypto and that we pitch for crypto is benefits in time of instability, that it can function as this transnational, you know, safe from issues in any single place, sort of asset based in technology. And so I think that the people that are in crypto, the users, the investors, the members prepared for these times of instability, and in fact, see it as an opportunity, and a chance to really demonstrate what crypto is good for. So it does feel like both crypto companies on a very practical level are pandemic proof or pandemic resistant, but also the industry as a whole and what we're working on feels pandemic resistant as well. Yeah. Has anything changed for you guys and how you're actually kind of

operating internally? Anything you guys have done differently because of this? You know, obviously the team's gone remote and people are working from home and we've built some processes to support that and making sure that people are are comfortable um and productive uh and also happy uh which is i think a really underrated point for a lot of people you know everyone thinks once you're remote how do you make sure that everyone's still communicating and productive and getting uh everything done and make sure they have the tools to do that which is undoubtedly important um but there's a second piece too that you know it's for us we really enjoy being in the office and when you don't have that it can be hard and so you know

how do you make sure that everyone feels really good and is happy and is is talking to everyone just even socially and encouraging that so we've we've built some stuff around that and are working on that but in terms of our planning from a business perspective it stayed pretty much on track I mean we again we ran the Solana auction you know last week and it was great and people participated and it sold out and it was a really successful offering in the pits of all this craziness um you know we've got the cello uh auction coming up and it's still on track we're you know launching more and more feature exchange and uh and for us it's just a matter of marching forward again because uh you know we're not working in the hospitality

space um and if we were we would be changing our plans and i you know feel awful for for friends who have had to do so in a space like that. But again, for crypto, if it is resistant at some level, let's keep marching forward and try and use this to not grow. Yeah, it's really interesting, kind of this balance. I feel like it's become cool to have to work from home and kind of remote culture. And there's a lot of benefits for it, obviously.

But there is still this element of the social component of going into the office, the camaraderie, the, the kind of human interaction. And I know there's a lot of companies are trying to figure out like, how do you build some of that into products or allow for the serendipity of an office and things like that. But, but I do hear a lot of founders saying it's like, we have the capabilities of doing remote work or work from home if people choose to do that. But we also see the benefit of in, you know, kind of everyone coming together. And it sounds like you're kind of like right down the fairway on balancing those two things yeah it's you know and i think you can

build a great company in any direction there's lots of evidence um with that but part of it is just the team that you end up building the people that are working together and and uh and for us that social interaction is important and um and helps people stay fired up and focused on the on the work at hand uh and and well aligned with each other and so yeah we've had to figure out how to how to work with that i mean what we we've been doing these virtual happy hours where everyone gets on zoom and hangs out with each other actually this week we we realized we should really make it a happy hour so we we sent everyone on the team uh a little bit of money to go out and buy a drink of choice and uh and you know sit there all together on this on this happy hour

um and so it's just those little things that i think can can make a little bit of a difference and get everyone excited about you know being together even in some more limited virtual way I love that. Any update as to what people went and bought? We'll find out early next week. We just, those dollars just went out. We'll find out. Everyone's keeping us surprised until we get on the call.

I'm sure there'll be some show and tell. You're a brave man. I don't know whether to be fearful of what people are going to buy or excited. We've got some good folks on the team. yeah so um you you are uh normally based in san francisco and then you're in phoenix now maybe give us an update just from like what are you seeing actually on the ground in those two cities um around uh coronavirus and kind of the the reaction um and maybe how it's affecting businesses in both those areas yeah yeah so it was interesting i i was actually in new york

most recently um until about a couple weeks ago we're recording this on april 3rd here um and uh And it was mid-March when I left New York. And so that was right when New York kind of shut down, when everything, all the restaurants closed. And I think what I saw there was this like densely packed city that was recognizing how dangerous it is to be densely packed when there's a pandemic and shutting down. And so, you know, from our team there and from friends there,

it's just a, it's, it's a odd dynamic to be in a city where so much of what makes the city, the city is everything going on there and then not having anything going on. And so it feels, you know, from, from talking to people there, it's, it's challenging time to be there. Certainly in San Francisco, where I, I also, I live, you know, I'm hearing a very similar thing that it's, it's largely shut down. The, the, the virus has not impacted San Francisco as much as has New York yet. But San Francisco was early on shutting down a lot of things and out of an abundance of caution. And again, not as densely packed as New York, but certainly still kind of city scale and city packed. And I came to Phoenix and it's interesting here because, well, there's

certainly a shelter in place now as of this week and restaurants are shut down or only doing delivery. A bit more of a spread out city for a lot of parts of the city. And so the impact has not been felt quite as severely. There's also relatively few cases of the virus. So it's shelter in place like San Francisco and New York, but by virtue of it just being more spread out, I think it has less of an impact on people's daily lives uh you know people are out running biking uh doing what they would would normally do it's just now people aren't going to the office as of this past week um but uh yeah it's interesting i think that the question for me is where we'll clear up first and kind of open back up um and is it going to be a place like san francisco or new york that took

really aggressive measures early on is able to kind of contain the virus and opens up first while everyone else is kind of battling this longer tail of it um or uh or is it a place like the impact was never felt that severely in the first place and they're able to kind of open the doors back up before the the more dense cities do um so it's uh it's an interesting time and interesting to kind of see the the contrast between these different places yeah the contrast between san francisco and new york is really interesting to me because uh san francisco definitely took it much more seriously much sooner. I had a couple of friends who came to New York, and this is probably right about like second week in March or so. And one of them made

a comment that basically was like, I can't believe that no one here is even talking about this. Like Grand Central is packed, the subways are packed, like nobody is even aware of this. And at that point, I think San Francisco maybe hadn't completely shut down, but was like moving in that direction pretty aggressively. And then here in New York, it took another week and a half or so before people said, hey, maybe I shouldn't go, you know, on the subway, or I shouldn't go stand around, you know, hundreds of other people at once. And so, you know, I don't know really why that is. But it just was a very distinct difference between the two cities for sure. Yeah, no, I, I also I also don't know why that was. I have hypotheses that, you know, San Francisco has a high concentration

of people that are, that are highly attuned to these sort of sorts of kind of global events. And New York probably actually has a higher raw number of those people by virtue of being much bigger. But in terms of the concentration and density of people that are paying attention to potential risk factors and everything else, I think that you could make the argument that san francisco has a higher higher density in the population so the alarm started to sound and uh and people looked at that and said you know this is uh this is concerning and um and advocated for some some action to be taken um and there's also an argument that you know at the time obviously the the virus was concentrated in china um and san francisco is much closer and

or travel there and so uh so it could be too that there was just kind of more information flow or more obvious concern there coming between the West Coast and China, as opposed to China and New York. Yeah. There's a component, one of Plano's friends jokingly said, coronavirus, I ride the J train every day. I'm not getting that. And there's a kind of truth in every good joke, which essentially is saying, look, New Yorkers, I think in general, kind of take this approach of like, that ain't killed me yet. And so you know, it's not gonna happen now. With which, in the face of a pandemic, it ends up being ignorance, right. But, but I

think it's just a mentality difference, just as much it was kind of an information flow as well. Yeah. And so what's been the impact on like the fundraising environment for you guys, communication with investors, like anytime you get knees, I was called kind of a time of uncertainty, I think a lot of things change and people focus on, you know, are you physically going to the office or are you not? But it's also the way that you communicate with your customers, with the investors for you guys, both in the company and then also investors in

the projects that you guys are helping fundraise for. How has all of that changed? Yeah. So it's a really interesting balance because like I was saying, a lot of it for us is at some level, business as usual. Let's keep running these sales. Let's keep rolling out exchange let's keep marketing and the points we're making earlier you know for a lot of our customers they're saying you know let's keep going we're we're excited and for the the individuals in the platform the investors and traders they're saying let's keep going we believe in crypto and there's there's this interesting dynamic i see sometimes um in crypto among the kind of the true crypto community um where when crypto's up when the market's up everyone's shouting and cheering

in and saying, you know, crypto's up, we're winning, which is great. And then when the market's down, everyone's looking at buying season. You know, there's a sale on crypto right now. Now's the time to get in. And, you know, I think this is kind of a unique attribute of crypto as an asset class because so many of the people in the community are such idealists with such a long view of the space. It almost doesn't matter what's happening at the, you know, in price levels. they're just going to have a different positive reaction either it's up we're winning or it's down it's buying season uh you know time to get in at a discount and uh and we're definitely seeing that from you know users on our platform that they just see this as a chance to to get in when everyone

else is is dismissing uh the space and uh and i think you're you're certainly seeing that in the markets too that after the big drop a few weeks ago in uh in crypto prices it's up it's been kind of steadily rising despite, you know, all the chaos in the world or perhaps because of all the chaos in the world. And so, you know, for us, a lot of it's business as usual. So when we think about communicating with investors or fundraising, you know, we don't have any plans to fundraise imminently. We're fortunate to, you know, be doing well in business and be running these generating revenue. And we raised a great round last year, led by Polychain with Jack Dorsey and Collaborative Fund and a bunch of other people. And so we're in a good position. But the question,

I think, when you're talking to investors that you already have in your company or the board is, okay, well, what's the downside scenario here? How bad could this be? And, you know, The assumption is if things are kind of neutral or good, then you're in good shape, obviously. But what's the worst case scenario? If this pandemic lasts a really long time, if it outlasts people's optimism about the space and willingness to believe in crypto as a hedge against this, if it really crushes the global economy at a level where crypto is just inevitably impacted as yet another asset, what happens then? And I think our view there is you've got to be careful. You know, in times like these, you don't want to be overspending. You don't want to be kind of burning cash left and right.

But at the same time, you do want to be seizing opportunities that are in front of you. And I think, you know, three, six months down the road, we'll have a much more clear picture of where this is going and what's going to happen. Data is helpful. You know, it feels like it's been years since this pandemic started. But, you know, we're talking about a couple of months here, really, in the in the kind of United States and in the public eye. And so, you know, three months from now, build much more clear picture. And so a lot of the communications for us have been we're staying the course. We're pushing forward. Let's figure out what we need to do to prepare for the worst case scenario here and make sure that, you know, that doesn't cause issues.

Yeah, it is. It's one of these weird things. uh i was talking to somebody about it from a small business perspective right so let's say you're that local restaurant and uh the pandemic happens there's a government mandated shutdown and if you're that small business owner and they said hey it's a two-week shutdown you would make an analysis okay how much cash do i have what's my you know cost could i survive for two weeks continue to pay my staff obviously we're gonna open up in two weeks and you could kind of make some uh educated decisions based on uh parameters that they gave you what instead is happening is basically shut down your business and we don't know when it's going to open back up and that's

a whole different ball game because now there's no kind of true analysis of how much capital do i have you know what my costs are and and uh and if i ever will open back up right because there's a lot of businesses that basically just gonna run out of money even if they they fire 80 of their staff etc and so for you guys obviously being a technology company that isn't you know kind of susceptible to being shut down like those restaurants and other small businesses are how have you thought about kind of the strength of the balance sheet um and kind of are you preparing for kind of six months of this 18 months of this and just kind of talk me through the the logic um and the frameworks that you've used to kind of think through that yeah well i'd actually point

out one more big difference between um you know a business like a restaurant and a business like a startup um like us is uh cash on hand so i i saw a chart the other day um about the average cash on hand like how many days of operating expenses do different businesses and different industries have and it did not list tech startups but it listed a whole bunch of more traditional businesses. And they ranged from, I think, restaurants were under a month of operating expenses on hand, on average. And the highest listed was like 46 days. I think it was real estate businesses have like, on average, 40 days of cash on hand. For all of these businesses, their cash on hand is, you know, between, let's call it 10 days and two months generously. And

that's just because of how these businesses work. They're cashflow businesses. They, every month they're planning to make a little more than they, than they spend and keep going, but they've got ongoing costs, even when they're shut down, like rent and other costs and dwindles really quickly. And startups, on the other hand, venture funded startups, I should say, carry with them a default assumption of having a lot of cash on hand, because the assumption for venture funded startups is that you, most of them, mostly lose money for a long time until maybe at some point they start making money. And I would say usually that's a curse, right? Usually you're, you know, most startups are burning money every month, burning, burning, burning, and then every year they have to go and

raise again and, you know, stock up the war chest and then keep going. But in this case, it's official models that wasn't very close to dying has 6 12 18 24 months of runway in the bank because that's what they have to do anyway uh and uh and in this case that's you know it makes it less of a day-to-day decision where you know a matter of seven days makes an enormous difference because you probably have 6 to 18 to 24 months of cash in the bank whereas for a restaurant obviously seven days if you've got 15 uh in the bank is is a is a life-changing um amount um so that's that's one dynamic you know for us um again i think it's about preparing for the downside we're in a comfortable cash position we weren't going to raise any time soon um and you know our view

like i said is you know let's keep expenses down you know not let's not start ramping up spending really aggressively in these next few months keep expenses down um and then you know in the next three months re-evaluate okay where are we at right now how long do we think this will last once this kind of initial shock dies down does it look like we're we're in this for 18 months in which case you know what do we have to do we have to go a little more money to make sure that we've got 24 or 30 months of runway if we think we're going to be in a real global recession for 18 months um how do we address that um but for the time being we're looking at it and we're saying you know this this feels like a uh you know a manageable position for us um and uh and also

you know government assistance that startups can theoretically apply for um assuming it all gets sorted out where you might get another month or two of of uh of runway by virtue of these these government loans as they get processed so um so that's another angle too but yeah for us don't wrap up spending. Let's check in a couple of months and see where we're at and push forward from there. Yeah. It's really interesting too, I think, because the dynamic you described about like startups are kind of already in the mindset of like, we need runway because we either don't have revenue or we're losing money. And what I've seen a lot of them do, I felt like there was one week there where everyone turned around to every service provider they said, and they were just

like, give us a discount, right? And that was for everything from rent to legal fees. I mean, just everything. And it was almost like there was this playbook that venture investors kind of knew they share that information with the founders and then founders went and executed on it. How has the communication with investors been and kind of, are there specific lessons that you've learned? And you don't have to name who the investor is, but just things that they've been able to um kind of share with you that you think uh other founders would benefit from understanding as you kind of continue going through this yeah i mean the the the most obvious one um and i say obvious but it's also something that i i think people need to be reminded of in the startup

community often and investors sometimes say like wow yeah is uh don't die right this is like it i mean the most blindingly obvious piece of advice out there but it's almost like people forget times that startups are expected to be a windy bumpy path exactly what you're doing today is probably not exactly what you'll be doing in five years and if you're around in five or ten years you figured out something that works so odds are what you need to do is stay alive keep pushing forward maintain your advantages um and and not die and uh and i think you know it's it's easy to say go go go growth at all costs startups are all about growth which is all true um but the the thing that kills startups is running out of and really nothing else uh and so uh so i i do

think that's just a important thing to remember on on the more tactical level um there's all sorts of things you can do if you're in a mission you're seeing teams do this right now obviously they've been some layoffs which is um really sad um you know i was talking to someone the other day who was uh talking about how how they've encouraged people to offer kind of salary for equity swaps so you know can you let people take a reduction in salary and save some burn and you know reward them with upside instead um and if you're in a position where you need to cut burn that makes a of sense too people are getting really creative uh and uh you know at the same time we've seen this before like you know sequoia sent out that letter a month ago or whenever that was saying

prepare for the worst and you know everyone should read that and should also go back and read uh the letter they sent in 2008 when uh when that was happening and uh and think about those considerations so um it so much of it depends on on where the startup is and cash position is and What the market position is, what market you're in, whether you're in a pandemic resistant one like crypto or you're a not pandemic resistant one like the hospitality tech space and all that matters. But number one, first and foremost, for all companies, do not die. Yeah, it's crazy how the simplest advice is actually the most important. And to your point, people kind of lose sight of that. It also brings the question, did corporate executives forget that?

When you kind of look, my favorite example is obviously the airlines where they spent like 96% of free cash flow, which is a way to return value back to shareholders. But if you end up dying at the end of all of that, then you kind of violated rule number one. And so all that shareholder value, you basically wipe it all out at the end. Seems like it's kind of a cliff that you're just accelerating towards to some degree. Yeah, I mean, I have a lot of thoughts on the airlines. uh i well i think it's a it's an issue of incentives right so so first of all there isn't an effective that a belief that maybe no bad no matter how badly they mess up they will not be dead because they will be saved right and if you know that that's backstopping

you or probably backstopping you that's going to wildly change your behavior um because you know you can do whatever you want and you'll you know that you'll be okay or you think you'll probably be okay but i think more importantly than that um there's a question of incentives for the people that are making the decisions so if you're a startup founder you most likely own a big chunk of your company and if you're making those decisions uh your net worth and your success is tied up in the success of the company that's like the company dies that equity that you have is worth nothing. So, you know, you've got this really, and most likely that's a meaningful thing for you. Uh, for a lot of these airline executives, uh,

they don't own a big one. And in fact, most of their, their cash, most of their compensation has been out regularly and their view, you could argue from an incentive perspective is when the times are good get as much as you can right because what they're what they do is they uh they effectively go and get stock-based compensation out of the company and then conduct these share buybacks free cash flow and increase the value of their ownership when times are good and uh and you can argue that there's an incentive there to just get as much as you can that's actually if you want to make as much money as possible as an airline executive the smartest thing to do is get massive amounts of stock-based compensation for the company doing well make the

company do well by spending all of its money on stock buybacks and just juice your compensation and then things will blow up at some point but you will have made your penny you know when the times are good and and you you can uh you can walk a or or push through um and so it speaks to me more about the less about people forgetting and more about just the power of incentives that as a startup founder you have very different incentives than an airline executive um and there's there's kind of a beauty in how startups are structured for that reason that you're you're in and uh and you need the thing to work for for you to be successful yeah the uh the really smart executives all left at the end of 2019 or kind of january 2020 right that the ones who kind of got

out and aren't uh you know being implicated in a lot of this um and we saw a lot of executives leave but it makes you question the ones who kind of stuck around if they just mistimed it but uh now they're kind of stuck in the stuck in the sand if you will yeah well i mean someone's got to be in those seats and uh and at some point when a bunch of others leave you might be saying well maybe it won't be as bad as they all thought and uh and now here's my chance to you know and uh yeah they may have gotten it wrong for sure um look so what's uh at coinless what's your pitch to uh to projects as they're looking to fundraise and stuff kind of what's the pitch now and uh for all the ones that are listening what can you kind of explain to them yeah the

pitch uh at a very high level is very simple uh coinless is where the best projects run their token sales. And why do they do that? Because one, we do a really good job for them. And we handle all of the work that we do really, really well. Two, we do a lot of work. We've built up a ton of systems over the past two and a half years to support a successful token sale. We've got a big community of people on the platform that see CoinList as a really trusted place and a place where the best projects run their token sales. And so all of those factors together increase the success of an already great project that is trying to run an effective system.

Some of the stuff that we do for them includes obviously handling compliance, due diligence on the investors. So KYC, AML, Accreditation, we built out these incredibly robust systems to support people all over the world and go through those processes. We help sometimes with marketing for certain sales and are able to help bring our community to bear to support the project. and that's really exciting. We help with analytics

of the investors coming in and reporting of what's going on and who's coming in and how to reach out to those people, how to increase the success of the offering. We help with the distribution and getting the tokens out to those purchasers at the end of the day.

And so for us, it's a really full stack approach. We want to abstract away all the stuff that teams shouldn't be spending their time on because they're only going to do this once or twice and do it for them and let them focus on building a great community and building a great project and a great go-to-market strategy.

And for us, every great project that works with us and that we're fortunate to partner with makes the pitch even stronger for the next one. And we see that over and over again. So teams usually come to us and they say, we're interested, how can we work together? And if they're a great, we get really fired up when we do everything in our power to make them successful,

both in the scope of those services that I was just talking about, but also informally figuring out ways to help them and, and, and pour more gas in the fire. Got it. And are there specific types of projects that you feel like are best positioned to leverage what you guys have built? Or is there anything specific in there like criteria you look for or just structure or anything like that?

We're pretty flexible. I think the biggest piece that ends up disqualifying projects from working with us if they otherwise have a great team and an interesting product and a strong go-to-market and all of that is if we don't see the case for them needing to have a token and that's those are kind of the toughest conversations where when we we sit down with a team they're again fantastic team great go-to-market really compelling product like all these signs are pointing the right direction and we look and we just say we just don't think this needs a token and we think it could be done much more effectively without

uh without a token because we don't think every company in every single application uh does need its own its own token um and those are the ones that we say sometimes you know this is a tough no for us but we just we just can't pull the trigger on this um so the ones that we're most excited about are the ones where there's a really telling use case for a token and and uh decentralization and and you know blockchain technology gonna make a big difference for the success of the project and those are the ones we really want to support so a lot of time that ends up being layer one projects so we've worked with a bunch of great layer one projects um but all application level ones then can can make a compelling case for using a token in their

ecosystem got it and so where can projects that um that'd be interested in learning more about the fundraising process go and then also what about individuals uh on the exchange side um as that kind of are waiting for that to come out? Yeah, so if you, well, anyone is welcome to reach out to team at coinlist.co at any time. If you're a project looking to engage, that's probably the best way to do it.

And we'll get right back to you and get a conversation going and talk about how we could help and learn more about what you're doing. If you're a project and you're reaching out to team at coinlist.co, I would say, definitely include some information, let us know what you're up to

and we'll dig in and do our research. If you are a user looking to trade or just participate, coinless.co slash trade, you can go, you can sign up. Right now, we are just starting to roll this out. So it's, first of all, from an asset perspective, so it's Bitcoin, Ethereum, Algorand, USDC, and then US dollars on an offer amp if you want to pay with your bank account.

And it's also limited from a UI perspective. So it's a really simple kind of click and trade interface where you say, I want to buy one Bitcoin. It shows you a price. You click OK and you buy it. But in the next couple of months, we'll be rolling out both more assets, which we're really excited about, and also a pro level interface with a real order book and a more advanced trading view that you can use if you are a more sophisticated trader. So all of that's coming in the next couple of months. It's awesome. I love it. um last question for you before we wrap up uh any cool quarantine plans anything that you got uh

in the next couple of weeks that uh you think is cool you know i have been using this um nothing particularly cool although i've got a friend hosting a virtual uh dj set tonight uh and uh and you know there's lots of good good virtual parties happening um i've been using this as a chance to reset a little bit. You know, I've found that without having 60 minute in-person meetings all day, I've got more time to, you know, catch up with people, dig in on kind of deep work and things that I've been putting off for a long time, exercise, all the good stuff in life. And so frankly, I think, you know, while certainly acknowledging all the terrible stuff happening around the world um having a chance to to reset a little bit and you know maybe not try and do

crazy uh crazy interesting things all the time and just take it a little a little more slowly for a few weeks has been a really pleasant change of gears and um we'll see how long we'll see how i feel longer it lasts but for the time being uh a reset's a good thing yeah it's one of these things where uh i jokingly said like the world's been forced to um do remote work and i wonder how many people are going to be excited about going back into an office right we talked about something like the social benefits but i think actually a lot of people are like wait a minute i like this way better i like not having meetings i like being able to go work out i like being able to you know not go on my hour commute both ways every day like all of these components um that just it

would be a hard to kind of uh experience uh cold turkey without something like this happening and so that may be some of the uh the benefit of all of this um you know coming out the other side of I think I think you're right I also I'm very sensitive to the the time so I think everyone much everyone is going to love a week of remote work uh I think fewer people are going to love a month of remote work and I think fewer still are going to love six months of remote work um and so seeing uh seeing how that all shakes out and how people's perspectives change depending on how long we're we're in this situation uh is something else to looking out for but I agree everyone everyone benefits from a little little time at home absolutely all right andy listen i

appreciate you uh jumping on and doing this um anyone that is interested go check out coinless.co and we'll have to do it again as you guys keep progressing here and eventually get that trading platform up sounds like a plan good luck and stay safe out there yeah you as well hey everyone pop here if you like this episode of off the chain and want to help us take crypto to the top of the apple spotify and other podcast charts please do us a favor and rate review and subscribe to review simply go to the off the chain homepage scroll down until you see the five blank stars taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts i appreciate you listening

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