The world of tokenized VC Funds with Ciaran Hynes, Cosimo Ventures

This week on the Tech Cat Show:

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Speaker 2: Welcome to the Tech Cat Show with host, Lori H. Schwartz. Each week, we hear from established leaders in the technology and consumer industry. Finding out the scoops should never be this much fun. Now, here is your host, Lori H. Schwartz.

Lori H Schwartz: Hi, everybody. Welcome to the Tech Cat Show. We have a really exciting guest today. We are going to be talking to Ciaran Hynes, who is a venture investor and also a serial entrepreneur. We’re going to talk again a little bit more on that blockchain world and cryptocurrencies, which we did a lot of talking about over the previous months. But this time, we’re going to talk a little bit more about it on the venture side.

Ciaran is an investor who has a company called COSIMO. COSIMO has some different companies, including GECKO, and Nova Leah, and Oneiro? Am I saying that right?

Ciaran Hynes: Oneiro, actually. It’s Greek for dream.

Lori H Schwartz: Oh, I like that. There we go. You are working in the venture space, but with this spin in the cryptocurrency side. Tell us all about what you’re doing at COSIMO.

Ciaran Hynes: COSIMO was established by Rob Frasca and I, about four and a half years ago, officially. We decided to set up COSIMO after working together for about a year. We both have entrepreneurial backgrounds. Rob in fact put the first financial services tech company ever on the internet back in the ’90s, a company he sold to Intuit. He went on then to form another company that he sold to Lycos. That’s one that he established with Ken Lang, who’s now our CTO, and actually one of the key members and early members of the ndau Collective, which you referenced earlier, a cryptocurrency that we have invested quite a bit into both in terms of time, in terms of money.

So Rob and I really hit it off. I was working with Irish companies looking to grow into the US market, early stage companies. Rob was working with Boston based companies. And we decided after a year working to formalize the relationship and we formed COSIMO to do just that and to start making investments in exciting new tech companies in the deep tech space.

Lori H Schwartz: Fantastic. And I know that we were going to talk about COSIMO X, which is a particular investment. But in terms of working in ventures, because that’s a lot of your background, are you finding right now that the marketplace has changed at all? Are things speeding up to market? Is it more difficult to raise funds and manage all of this? Or is it easier now because it’s such a public topic?

Ciaran Hynes: That’s a really interesting question. We set about ourselves as entrepreneurs. We didn’t come into venture the traditional route where we joined a venture firm and we were associates and we made it up to partner. We approached venture from an entrepreneurial perspective. We’re all successful entrepreneurs, we’ve all made at least one if not two or three exits. So we have a different approach to venture than most. Now, we’re not the only ones that do that, obviously, but certainly that’s our mentality. We looked at raising a traditional venture fund, so we went to the familiar offices and high net worth individuals both in Europe and here in the US.

We certainly, one thing that we got a lot of feedback on was the lack of liquidity in the space. It was an asset class that traditionally you would need one to five or 10 million to invest in or to commit to at least. And you’re looking at a seven to 10 year horizon for returns, and that’s certainly one of the big things that Rob and I heard when we were on that initial road show. So when we saw the advance of blockchain and what it could do, we said, “Well, why don’t we create a security token and bring what we believe, disrupt venture itself and bring it to the next phase, and bring an element of liquidity to an otherwise pretty illiquid asset class?”

Lori H Schwartz: Well, it’s great to have a combination of expertises too that wine together, right? Now, tell us about COSIMO X.

Ciaran Hynes: COSIMO X is just that. COSIMO X is an evergreen, we believe the first in the world, an evergreen security token venture fund. And what it is, it’s taking the traditional venture model and it’s basically tokenizing it. So instead of LPs making commitments and having capital calls over a period of time, LPs buy security tokens, which represents their interest in the fund. And what that does is, it really has brought to different unique aspects to venture sure and in what we’re doing.

One is the idea of democratizing venture more than it ever has. Like as I said a few minutes ago, you always needed to be able to commit one to five or 10 million to a fund, especially the bigger funds, even more than that, to be able to access this asset class. So with our funds, for as low as $250,000, once you’re an accredited investor here in the US, you can buy tokens in our fund. And outside the US, our minimum is only $10,000. So it opens it up to a whole new level of investor. That’s the first thing.

The second thing is around liquidity because we are based on a security token and because there are security token exchanges coming on the market like Open Finance and tZERO that once the investor in the US, again, I have to differentiate between US and outside of the US from our filing perspective and our regulatory perspective. But if you’re in the US, once you hold your token for longer than 12 months, then you can freely trade it on one of those security token exchanges. That’s one way you can get liquidity.

The second way you can get liquidity is if we make an exit, we will distribute 50% of that exit immediately to the token holders. And the third way that the LPs can get or token purchasers can get liquidity is as part of our strategy, we look at interesting companies in the blockchain space, and GECKO you mentioned earlier, is a great example of this, where we’ve taken an equity position in GECKO, but we also negotiated as part of that, a percentage of their tokens in their ICO, which is currently in private sale.

So on behalf of our token holders, we have prenegotiated a position where they are entitled to a percentage of tokens in a different ICO, and they can then decide to hold those tokens or to trade them as they see fit.

Lori H Schwartz: Well, I think you’re creating a great opportunity for people that, to your point, don’t normally get to play in this space. But my question to you is, just to someone who’s sitting at the top of all of this, is it more difficult to manage when you have more people investing for less money and also maybe people that normally don’t play in this space? So isn’t that a little bit more risky?

Ciaran Hynes: It’s not risky from our perspective. And because it’s done on the blockchain, it eliminates … I mean, there’s no way you would have two or 3,000 potential LPs in a traditional venture fund, and this is what blockchain allows us to do. We’re working with a very strong partner, Securitize. They have built us a system that issues the ERC’s … It’s built on ERC, the Ethereum ERC-20 token. They’ve built the system that issues the token and manages the entire process of KYC, AML and accreditation in over 100 countries. And then in terms of communicating with those token holders on a regular basis, it’s very, very easy even if there is two or 3,000 as there could be potentially in the fund.

Lori H Schwartz: Well, you make it sound like it’s something I can just jump into and then have access to all of your other investments, which I just loved that idea. You mentioned that you were at Fenway Park last night, which we’re dating the show, but the poor Dodgers for the world series. Are you finding that in the US right now there are specific cities that are more active in this space, doing more investing with the token language, I guess is the expression?

Ciaran Hynes: Well, first of all, I think it’s very global. I’m heading to Hong Kong next week for Fintech Week there and we know that there is a huge interest in both what we’re doing in COSIMO X and in crypto currencies in general. There’s a huge, a much bigger percentage of funds already invested, and individuals who are interested. So we think about it as a global marketplace as opposed to just US. But within the US, there certainly are pockets. We’re seeing a lot of investment out of Florida, out of New York, out of parts of Texas. And less so from our perspective, and again, maybe it’s because we’re headquartered here in Boston, less so from the West Coast. Chicago is also pretty strong as well.

Lori H Schwartz: That’s interesting. I wonder why that is. You mentioned Florida and Texas, which are such interesting and confusing states right now in general. But God, that’s interesting because we have so many events in town right now around crypto. There’s one actually today happening in cryptocurrency. It seems like every week there’s another event around this space.

Ciaran Hynes: Absolutely. If you looked at my calendar and my colleague’s calendar for the next three months, it would make your head spin because we are literally all over the globe. My colleague is in London tomorrow for Stable Coin Conference, then he’s in Switzerland, then he’s in Malta. Rob and Steve, my other two colleagues are in Vegas and LA. I, myself, I’m in Hong Kong, I’m in Ireland. So this is very much a global marketplace. And so like I said earlier, we don’t really think of it purely in US terms. But what I would say in terms of the US is, we are seeing a seismic shift in the traditional investments space, so family offices, high net worth individuals that are starting to turn their attention to the whole crypto blockchain space in a very, very big way.

And we can see it, we can see it on a weekly and a monthly basis. We’ve been doing this for nearly two years now. When we started first, we had to explain literally what blockchain was and how it worked. Now, that’s advanced hugely to the point where they’re asking the difference between what’s a stable coin of what’s a buoyant coin and which one should I invest in? Things are moving really, really fast. I’m very lucky I have two fantastic partners. I’ve more than two fantastic partners, but two that experienced the internet boom back in the late ’90s.

My co founder Robert Frasca and Ken Lang. Ken actually was the pioneer and the inventor of Amazon’s collaborative filtering technology. So when you’re going on Amazon, it says to you, if you like this, you might like this, this and this. He invented that technology. He invented most of the tech behind Google AdWords, so all of that magic engine technology as well.

Lori H Schwartz: So you have good people.

Ciaran Hynes: We have good people, but the point that was going to make was … Oh, sorry.

Lori H Schwartz: No. We’ll take a break and then we’ll come back. Hold that great point. We’re going to dive a little bit more into some of the trends that you’re seeing as well. So we’re going to be back in a moment with Ciaran Hynes, who is taking us through his world with COSIMO X and COSIMO ventures, and the value of a tokenized VC. We’ll be back in a moment on The Tech Cat Show.

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Lori H Schwartz: Hi everybody, we’re back, and we have been having a phone conversation with Ciaran Hynes who is a venture investor and serial entrepreneur. And we’ve been talking about COSIMO ventures and specifically COSIMO X, which is all about being a tokenized VC. You were just about to get into some of the trends that your partners had already witnessed and it’s benefiting your experience based on the early internet and that explosion and bubble. Can you share with us some of those insights?

Ciaran Hynes: Sure, absolutely. I did mention earlier that Rob put the first financial service company ever on the internet and Ken was behind Amazon and Google AdWords technologies. So they were around as the internet was dawning. In fact, Rob always tells stories about how, when he was launching his new stock quote server on the internet, he literally had to explain what the internet at was to prospective clients, and Ken would say the same thing. And what they say to me everyday here in the office is, “We’ve seen this movie before, and this time it’s blockchain and distributed ledger technology, but that this time it’s happening 10 times faster than how the internet came upon us.”

And the parallels are incredible. You had the dark web and then you’ve got the dark users of crypto, and then you see the advancement. And then there was lack of regulation, and we still have lack of regulation in the whole blockchain/crypto space. But that’s moving along. But again, it’s happening so much faster than what happened in the late ’90s. So just some really interesting parallels between the dawning of the internet and the dawning of blockchain and DLT.

Lori H Schwartz: Well, do you see, back in those days there was like an explosion of companies that were based on like a singular idea, and some of them of course went away pretty quickly and then some of them surprised people and grew, like people were like, “How could you have a pet website? How would that survive? Why would anybody want to buy from a pet store online?” Are you seeing like singularly themed tokens going out there, ICOs happening where it’s a really narrow idea, but it has potential?

Ciaran Hynes: If you look at what happened in maybe a year and a half or two years ago, you had two technologists write a white paper, do an ICO and raise tens of millions of dollars and then go about building that particular product or service. We’ve seen that that has become obviously less prevalent over the course of the last year and a half because investors have become a lot more educated. So no longer is a white paper enough, what we’re seeing now is that most of the technologies that are successful have either A, an extremely strong track record of entrepreneurial success, and a number of them within the organization. Or, they’ve got a product market fit.

GECKO is a great example, for example. And one of the reasons we invested in GECKO. We could see their blockchain potential. When they came to us first, they had built a platform for regulation compliance for the hedge fund, mutual fund industry. And they then implemented that on blockchain, which was a very relevant and efficient use case. We see way too many companies that tell us they’re blockchain companies and when you dig under the surface, you realize they could just do it on a database. There’s no need for block chain. It doesn’t add anything, but it’s just the trendy thing.

It’s a bit like AI was a year ago, every company that came to us was an AI company, and when you dug beneath the surface, of course there was no AI there, it was barely machine learning. So that’s certainly a trend that I’ve seen over the last year and a half where the quality of the blockchain companies coming to market and the stage they’re coming has advanced and is much more mature than what it was two years ago.

Lori H Schwartz: Is there a real starvation for the technical aspect of this; programmers and coders and people who can write? I know there was a move over the last six months to try and standardize how a lot of this stuff was being written, but are you seeing that there’s still a really huge demand for the technology side of it?

Ciaran Hynes: Well, I suppose there’s two aspects there. One is that the technology is still evolving. It still has issues it’s early, there are still scaling problems to be solved, and we all know that. But there’s a lot of money out there trying to solve those problems, so I don’t see that being a major challenge, it’s just a time issue. The more challenging issue is for quality blockchain companies to be able to find the right people. And I think there is a gap between education and the business blockchain world at the moment. There’s a lag time there.

We’re starting to see that being filled and starting to narrow, but there’s still a good way to go. It is really, really difficult to get blockchain computer scientists or blockchain programmers. And if you do get them, they’re extremely expensive.

Lori H Schwartz: Right, because it’s all still really new. We’re seeing data scientists across the board, all parts of the Hollywood ecosystem, whether it’s for specifically for a media entity or for a financial entity or whatever it is, be under such demand. And they’re young. The people that are in the data science space right now are fairly young. I have found them to be missing the bigger strategy picture of the business they’re in, but just have the knowledge on the programming side. I don’t know if you’re finding that too.

Ciaran Hynes: Actually that’s a great point. And it’s one of the reasons we invested in [Monero 00:21:22] which has built a new digital cryptocurrency. We believe it’s the first global buoyant currency as opposed to stable currency in the world. The thing that we really liked about the team there and what they built was they started from the economics perspective, and they said, “We want to build an economics platform that is going to be the best in the world. Now, how can blockchain and technology supplement that and make it better?” And it’s the total opposite to what we’ve seen with most other projects that we’ve looked at where it’s tech driven and business or economics focus second. So, it’s a really good point.

Lori H Schwartz: Let’s talk a little bit for a moment too about compliance, because a couple times you mentioned securities exchange and things like that. And again, a lot of the more regular people news, not for people that are really playing in this space, but for those of us that just sit outside and hear the buzz and the hype, what we’re hearing are people like Mark Cuban saying, “If you invest in anything in the blockchain, you’re just basically burning your money.” That it’s not stable, that companies are being shut down by the government. So can you talk a little bit about compliance and how that’s working right now?

Ciaran Hynes: Sure. Well, the first thing I would say to you, COSIMO X security tokens are securities. Our legal team have dealt with them as such from day one. So we are no different than any other fund in terms of how we’re offering that, and we’re very clear about that. We’re not trying to claim a currency, or we’re not trying to claim that we’re a utility token. That’s the first point I think I need to make very, very clearly. The second thing is the point you raised about ICLSs is being shut down. You have to go and analyze those because many of those that have been shut down, have been shut down for fraudulent reasons or for other less than best protocol being applied. So that’s the second thing.

The other thing I would say to you is, I don’t know if you noticed or saw yesterday that the SEC have launched an engagement program now for ICOs. They’ve got a division within there led by their digital experts who’s now willing to engage with ICOs at an early stage and advise them on where they fit in the regulatory landscape. And that, hand in hand with more clarity around the regulation going forward is going to help the entire space. Those are the kinds of positives that are happening in the background that most people may not be aware of.

Lori H Schwartz: And do you think that, is that information translating out from a PR perspective so that cryptocurrency doesn’t have such an unstable reputation?

Ciaran Hynes: Yeah. But again, it’s like the internet. The internet, when it started first had a very unstable and dark reputation, like I mentioned earlier. We’re in the same phase or thankfully moving out of the same phase. And like I said, we are talking to very traditional, old school, in many cases, conservative investors who have turned their attention to this space. And when you see that happening in the marketplace, you know that it’s past that dark phase that there’s no longer the fear despite the scaremongering that people with big public personas would like to have you believe.

Lori H Schwartz: I like the scary personas point. Well, there was just so many jokes about like, “Oh, it’s a kitty cat token.” And then people would just, there would be endless jokes about it. And then we had colleagues who made a lot of money and then lost a lot of money. So those are the stories that you hear. But here you are, a professional ventures person and you’re obviously coming at it from the most above board way, bringing solid techniques and business insights into it. It’s actually comforting to hear that, that’s it’s becoming realer all the time.

Ciaran Hynes: Absolutely. In fact, I mentioned, my colleague, Connor Cantwell is in London at a stable coin conference. And one of the reasons behind that conference is to self regulate that element of the industry, the stable coin piece of it. So that’s a real positive. The other thing you mentioned, GECKO and I talked about GECKO a little bit, but GECKO have taken their compliance and regulation platform for hedge funds, mutual funds, banks in the traditional financial sector, and they’ve built a platform for ICOs. So again, there’s that type of self regulation going on. In fact, they just approved their first couple of companies there in the last few weeks.

So there’s really, there’s an awful lot of positive things happening out there, both within the industry and I think the CFTC and the SCC are starting to take notice that, getting their heads around the technology, its potential and then starting … I’m really positive that there will be a very bright future for this whole space, and in the not too distant future, and I mean from a regulation perspective, so we’ll really truly understand what they’re dealing with.

Lori H Schwartz: I love hearing that because I did not try to win the mega million lottery that just happened. So maybe now I can consult with you on where to put some money into this space, and I guess somebody else won the money anyway today, but we’re going to be back in a moment. We’ve been talking to Ciaran Hynes about the world of crypto currency and actually how exciting it’s sounding, how real it is, and how you can be very smart about moving forward in this space.

When we come back, we’ll dig into companies that are doing some interesting things and I’d love to hear more, Ciaran how you keep up on all of this and know what’s real and what’s not. We’re going to be back in a moment on the Tech Cat Show, diving into the latest on crypto currencies and the tech surrounding it, talking to the fabulous Ciaran Hynes from COSIMO Ventures.

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Speaker 1: This is the Tech Cat Show with Lori H. Schwartz. If you want to find out more about our show or to leave a comment or question, send an email to Lori@Techcat.tv. That’s Lori@Techcat.tv.

Lori H Schwartz: Hi everybody, and we are back on the Tech Cat Show. We’ve been talking to Ciaran Hynes about the world of cryptocurrencies and specifically COSIMO X, his venture. Would you call it your token? What would you call it?

Ciaran Hynes: COSIMO X?

Lori H Schwartz: Yeah. COSIMO X. What’s the way to-

Ciaran Hynes: It’s an evergreen security token venture fund.

Lori H Schwartz: Okay. There, venture fund, great. Well, in this world, and I know you were saying that a lot of the trends that are happening are paralleling but in a different timing, what happened with the internet boom, but are there any other surprises around the trends that are happening or just even as someone who comes from the venture side with all of this, anything that’s really caught you off guard in a good way as well? Anything really surprising?

Ciaran Hynes: I don’t really think so. To me, it’s probably the most exciting space that I’ve ever worked in. And as such, maybe I’m a little biased in that, I’m seeing all the positive applications of blockchain from protecting digital identity to supply chain management. Just think about it for a minute, if blockchain was implemented successfully in the food industry, you will be able to track the birth of an animal to your storefront and know that there was an immutable record there that you could depend 100% and trust. And I think that’s really, really powerful.

Genuine applications of blockchain to traditional industries has been the most exciting thing that I’ve seen, and it’s probably surprised me, if you were to use that word, how quickly a lot of industries are adopting it.

Lori H Schwartz: That’s also again, interesting to hear someone like you being surprised by anything, but again, you’re saying it is sort of paralleling previous trends. Are there companies that you think are doing really interesting things, companies that you’ve either been surprised about, miring from the side?

Ciaran Hynes: Well, one of the companies like I mentioned it earlier, is Oneiro who have built this platform, this new digital buoyant currency called ndau. I think that’s probably of all of the projects I’ve looked at, that’s the most exciting that I’ve seen, and that’s why we’ve put so much money behind it. The people behind ndau or the ndau Collective. That’s N-D-A-U, by the way, ndau.io is the website, if you want to read up about it. It effectively, these guys worked for three years and they analyzed all of the other currencies in the marketplace and they said, “How can we do this better?”

And like I said earlier, they approached it from an economics perspective, from a business perspective, from a banking perspective. And then they applied the technology to their thought process. They actually came up with 23 issues that they found, major issues in current cryptocurrencies and they set about systematically, building a system that would solve each of those. When we engaged with them first, about a year and a half ago, we said, “Listen, we can’t kind of deal with 23 things all at one time. What are the three most important? What are the three biggest deficiencies that you guys see in cryptocurrency today?”

And they focused on governance, volatility and dependability. Governance, in that in bitcoin there is no governance and in other cryptocurrencies, it’s very centralized. They helped built the idea of a blockchain policy council that represents the holders of the currency and is elected by the holders of the currency to determine the policies of that currency going forward. It’s almost like if as an owner of a dollar or $10 bill, you would have one or 10 votes for the Fed, Federal Reserve. It’s a really interesting concept and we liked that because we also believe it will stop forking, that you’ve heard of soft forks and hard forks happening to this particular currency.

The second thing was volatility, and that’s one of the things that has kept a lot of investors and new investors out of the market is the volatility that you see in bitcoin, so not just bitcoin but others as well because they’re all interrelated at the moment in the market. One day you could have bitcoin worth 20,000 and then two weeks later, it could be worth six, and that’s a serious concern for a purchaser/investor in crypto currency. The idea of ndau is that every ndau that is purchased, the proceeds of that goes into an endowment fund, and that’s where the name came from, ndau.

That endowment fund is used to support the monetary policy of the currency. That’s its sole purpose. It’s not like a stable coin where it’s backed by US dollar or backed by gold or algorithmic based, it is literally supported by an endowment that is there to support the monetary policy of the currency. It’s like an independent global currency, that’s how we see it. And then they’ve built an economic mechanisms to ensure dependability that this currency will be used as a true longterm store of value. In fact, when it was announced there recently, a number of journalists throughout the world said that it was the closest thing to Satoshi, his vision of bitcoin that they’d ever seen.

We are extremely excited about it and I think it could be a real global currency number one, but a global game changer as well in the whole crypto space.

Lori H Schwartz: Now, we were talking because I’m just noticing that there’s also a site that’s called ndau Collective. This is, I’m assuming, just a hub of information about everything that’s happening?

Ciaran Hynes: Yes. The ndau Collective was a group of over 20 people, bankers, computer scientists, mathematicians, physicists, historians, economists, that came together three years ago as a group. And that site that you’re talking about, ndauCollective.org is basically a community site, which interested parties are very welcome to join. The main site is ndau.io, and that’s where people can read the white paper and gain more information about the currency and how it works and some of the mechanisms that I just spoke about there.

Lori H Schwartz: On the heels of today’s stock market, taking a dump, something like ndau, just because of the way you just talked about it, it’s not going to be tied into what’s happening in our stock market, it won’t be having depreciation like the US dollar does, it’ll have its own life? Is that the case?

Ciaran Hynes: Yeah, exactly. In fact, you’ve just nailed one of the key points about the currency. When you think about stable coins and they’re pegged to the dollar, they certainly serve a purpose. They serve a short term purpose, if you own cryptocurrency and you want somewhere stable short term to keep it, but ultimately, if it’s pegged to the US dollar and the other currency, it’s going to lose value over time as currency does. So where ndau comes in, is that because it supports monetary policy, it’s not effected by these outside forces in the same way that a fiat currency would be.

Lori H Schwartz: So I won’t get depressed every morning I wake up and I see my daughter’s future disappearing? It’s obvious, and you mentioned this before, that people in the blockchain space, and even going down the funnel of crypto, it’s a different kind of person that’s involved in this space. There is this deeper sense of community and reinventing the world  in a better way. What is it about this world that it draws people like that? Is it because of the democratization that the technology is bringing? It really is this hopeful positive approach to things, reinventing legacy systems to really let everyone jump in.

Ciaran Hynes: Yeah, I think it’s around that. It’s also, one of the words that I hear an awful lot is about rebuilding trust again, trust in a system. And that’s what blockchain is at it’s very core. It’s trusting the system by consensus of the participants in that system. That is so fundamental. And then it’s taking that trust and it’s disrupting everything and doing away with intermediaries that have been proven in certain cases not to be so trustworthy over the last number of years.

And I think that’s, it was from ’08 actually, that’s where this whole movement began. So you’re right, the real early evangelists, if you like, in this space had that as their core, the idea of decentralized consensus, agreement and trust among people to build better systems. And I think we’ve moved on from that. Building on the back of what a bitcoin through Ethereum and now it’s through to other currencies and utility tokens, and security tokens. We moved into a different phase where you have a different type of participant. I mentioned earlier, you’ve got traditional conservative investors who’s now coming into the space.

One thing I do find traveling around the world and around this country is that you have a huge amount of young people who really, really believe in this.

Lori H Schwartz: That’s what I’ve noticed.

Ciaran Hynes: It’s quite incredible.

Lori H Schwartz: At all the different events that I see millennials and the younger generation, Gen Z or whatever you want to call them, really focused and really gung ho about playing in this space. So really young people who have a vision and who are pounding away in their 20s very seriously at this stuff, which is so different than anything I’ve seen before with that specific demographic. It seems to have awakened them in a way.

Ciaran Hynes: It definitely has. And you mentioned the word, what had surprise me, it is the type of demographic, and I would be already close, obviously coming originally from Ireland, I’d be very close to a lot of the different demographics within that country. And it has really me that when I mention blockchain or bitcoin, the people who have retorted, “Oh yeah, I bought that three years ago.” It’s astonished me in many ways. Not that they’re young, but just their demographic. You wouldn’t traditionally associate with having a stock market account, number one, let alone a crypto account with Binance or Kraken or whoever.

Lori H Schwartz: And just the focus, the singular vision that is not actually normally associated with this particular generation or two. We’re going to need to take one more break and when we come back, I want to hear what’s next for you and COSIMO X, and just maybe some ideas about what we should be looking out for in the next six months in the crypto space, because you have changed my mind about this. And now I want to get off the phone with you and buy something. So we’re going to be back with Ciaran Hynes, who is an excellent salesman by accident, from COSIMO X talking about crypto and how stable it’s become, how exciting it is, and all the great companies that COSIMO X is digging into. We’ll be back in a moment on the Tech Cat Show

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Speaker 1: This is the Tech Cat Show with Lori H. Schwartz. If you want to find out more about our show or to leave a comment or a question, send an email to Lori@Techcat.tv. That’s Lori@Techcat.tv.

Lori H Schwartz: Hi everybody. We’re back digging into crypto, which I’m getting a very, very positive and exciting overview of where the space is really going with Ciaran Hynes from COSIMO Ventures. And I was just asking, I’m just so curious Ciaran, because there are so many crypto, blockchain events right now. And again, I’m an events professional, I make a living doing events, but I don’t understand the differentiation between all of these events. Is there something different about each of these crypto events or is it really just because it’s global so you have to be everywhere? Or are they all addressing different issues? Why are there so many?

Ciaran Hynes: That’s a very good question. We believe there are way too many events. And like any vertical in events, you have high quality and you have low quality, and you have everything in between. So, what we look for is we look for the level of speaker that’s speaking at a particular event. So just to give you an example, any event that we see Tim Draper speaking at tends to be a very high quality, decent event with great speakers and great content. Also, our lawyer Joel Telpner, who is one of the global experts in this space at Sullivan and Worcester, when he speaks at an event, you can be guaranteed that it’s a quality event.

We’re also very lucky we have a great firm Wachsmann who do our public relations and media outreach. They have an events team as well and they analyze all of the events. So I suppose we’re in a very privileged position in that we have all that background, etc, and know from past experience, the good ones from the bad ones. But you’re right, it’s kind of like a minefield out there. And at the moment, because it’s an evolving industry, it’s very difficult to have a conference on purely stable coin, even though there’s one happening in London tomorrow, but it’s a private small event for a purpose.

You can’t really, I don’t think at this point you can divide them into, “Let’s have an exchange conference, let’s have a digital currency conference, let’s have a digital currency conference, let’s have a security token conference.” Because there isn’t the volume there and you’ll know this from being in the events industry, you need that sufficient volume to make them financially viable. I think we’re reaching that point or we will reach it very soon where you’ll start to see divisions of crypto and blockchain into specific sectors.

But at the moment, for me, they’re all about the same thing, they’re all about interested parties who have been around the space for the last number of years speaking, and those who are looking to get into the space and get educated with attending. That’s what we’re seeing.

Lori H Schwartz: Do you think that you guys will be investing in and supporting blockchain companies that have nothing to do with the stability of cryptocurrency or the actual operations of all of it, but really just on infrastructure of an industry, so going really far from-

Ciaran Hynes: Absolutely.

Lori H Schwartz: Go ahead. I’m sorry.

Ciaran Hynes: Sorry. No, please go ahead. Go ahead.

Lori H Schwartz: Oh, I was just going to ask, are there particular business categories right now that you are the most intrigued by outside of finance?

Ciaran Hynes: Sure. I have to say, at the outset, we’re not completely focused on blockchain. We look at very interesting AI and machine learning projects. We think augmented reality, is another other big space that really hasn’t broken out yet. We’ve got an interesting company in that space. We look at all deep technologies that we think can really disrupt and change industries or create complete new ones. That’s the fundamental thesis that we have as investors and in our fund in COSIMO X.

Blockchain is certainly something that excites us a lot, it’s something that we a deep expertise in, and it’s certainly one of our main focuses but not our only focus. I was going to say that we Connor Cantwell, who’s based in our Dublin office, Connor covers Europe and we obviously cover the US from here. We’re seeing very interesting projects come out, and in particular Ireland in the UK, we have very, very strong partnerships with universities, with incubators, with accelerators there. What Connor does is he has a great relationship with a lot of the main ones there and he would monitor companies and watch until he sees is that they get product market fit.

And many of those are in the blockchain space. Things I mentioned earlier, like digital identity or supply chain are two areas that we think they’re very high up our pecking order when it comes to the space.

Lori H Schwartz: And Dublin does seem to be in a way breeding a lot of people like you in this space, meaning people who have financial backgrounds, who are spinning a little bit into blockchain and crypto. It’s just funny, I just realized I’ve spoken to quite a few people with your lovely accent over the last six months. What happened to the experts in the space? Is there a reason that Dublin’s becoming such a happen?

Ciaran Hynes: Well, I think Enterprise Ireland have really, the government agency for supporting early stage companies, is one of the strongest in the world and quite frankly, the envy of many countries in the world. I think I saw a stat there recently where, based on number of investments per year, they’re in the top five in the world, like up there with Sequoia Capital and Andreessen Horowitz. That’s phenomenal for a country of its size, so that certainly plays a huge part. There’s also a strong psyche as well of entrepreneurial activity in Ireland.

We certainly have seen some great entrepreneurs over the last number of years. If you look at the Collison Brothers, who have had one successful company already and are now building stripe out on the west coast. There certainly is a culture starting to be established more strongly than maybe when I was growing up there around entrepreneurism. And one thing I would say, and one thing I love about the US is that, people don’t judge you for failing here. In fact, it’s almost like a badge of honor that you failed once because you’ve learned.

In Ireland, when I was growing up, failure was never really tolerated. And I see that changing, I see that in fact it has changed. People are admired now for taking the chance and if they fail once, fine, just go at it again, get up again, dust yourself off and do better the second time. And I think that’s something that I’ve seen develop in Ireland, particularly over the last 10 years.

Lori H Schwartz: Failure sounds better with brogue, I have to say. We’re going to have to close out, but give us some last minutes on where you’re going to be speaking next.

Ciaran Hynes: Well, like I mentioned, I’m going to Hong Kong next week, I’ll be at events there with my colleague, Ken Lang for Fintech Week in Hong Kong. There’s no specific events in particular, but there’s a number of events are happening for that particular week there. And then I have a couple of private events, I’m talking to crypto investors in Dublin on Monday and Tuesday the week after. And then a lot of us will be at Consensus in New York. It’s one of the … you mentioned the event earlier, it’s one of the most highly respected events on the calendar, Consensus Invest and that really is about-

Lori H Schwartz: I just remember it happening last year or at least six months ago or something.

Ciaran Hynes: Yeah, it happens twice a year. One of the Consensus conferences is focused on tech and the other is focused on investments. So what you get at this one is a lot of the traditional financial players coming along and getting themselves educated. And we saw, of course just last week, Fidelity Investments announcing that they are going to launch a new crypto platform which is going to bring the whole asset class to a much wider audience. So it’s great to see that happening and Consensus Invest has played its part in making that happen.

Lori H Schwartz: Wonderful. Well, we’ve been talking with Ciaran Hynes, who is a managing partner at COSIMO. He’s been dropping some insights on cryptocurrency and also just the smart focus that COSIMO Ventures has on deep tech companies and how to think about the future so we can learn more. Do you guys have a website? COSIMO Ventures?

Ciaran Hynes: Cosimoventures.com. Specifically for the fund, it’s Cosimox.com. You can learn more about both the company and the fond on both of those sites.

Lori H Schwartz: And you can follow Ciaran, it’s C-I-A-R-A-N H-Y-N-E-S, Ciaran Hynes. And I’m so surprised I haven’t botched your name, it’s amazing, but thank you so much for sharing with us all these great insights. It’s been wonderful to learn about the positive spin that all this is going in.

Ciaran Hynes: It has been a pleasure speaking with you Lori, thank you.

Lori H Schwartz: And we’ll talk to everybody next week. Invest in cryptocurrency according to Mr. Ciaran Hynes. Bye everybody.

Speaker 2: Thanks so much for listening to the Tech Cat Show, please join Lori H. Schwartz again for another great program next Wednesday at 4:00 PM Eastern Time, 1:00 PM Pacific Time on the Voice America Business Channel and syndicated to the Voice America Women’s Channel.

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