#260: Andy Bromberg on How the Crypto Economy is Withstanding the Coronavirus Crisis

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. ===============================

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Anthony Pompliano?

  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.

• 0:10Anthony Pompliano?

  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

• 0:54Anthony Pompliano?

  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/invite/pomp, 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/invite/pomp and get your crypto taxes paid today. Alright, let's get into this episode with Andy.

• 1:38Speaker 01

  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.

• 2:04Anthony Pompliano?

  Alright guys, bang, bang. I've got Andy here with me, who is in Phoenix right now. Thanks for doing this, man.

• 2:13Speaker 02

  Thanks for having me.

• 2:14Anthony Pompliano?

  Yeah, for sure. You, uh, this is your second time, uh, coming on the podcast. So, uh, we'll skip over all the, uh, the background. Maybe just give us kind of an overview of Coinlist today and an update as to like where you guys are since the last time we talked.

• 2:28Speaker 02

  Yeah, I know. That was quite a while ago and Coinlist has changed quite a bit. Back then, our business was token 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, uh, Blockstack, Algorand, Nervos, uh, and many others. Most recently, Solana ran their auction, uh, last week, which was very successful. Um, we can talk about that a little bit. We've got some other business coming up, including Cello. Um, 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.

• 3:09Speaker 02

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

• 3:27Anthony Pompliano?

  Got it. And so with that exchange, uh, is the whole thought process that, um, basically there will be any asset that can exchange, uh, be exchanged there. So like more of a competitor like the, um, you know, Coinbase's, Binance's, Gemini's of the world? Or are these very specific types of, uh, of crypto assets that'll be traded?

• 3:46Speaker 02

  Yeah. So it, we, we will list those large cap ones like the Bitcoin, Ethereum, because people want to trade those. And if they're on our platform, we 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, you know, a Cello coming up. And the reason for that is, is actually really compelling. When you participate in it. The 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 a thousand dollars 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.

• 4:28Speaker 02

  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,

• 5:08Speaker 02

  but just hit the button right here. You're already on the Coinlist 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.

• 5:27Anthony Pompliano?

  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 or the individuals, family offices? What are you seeing there?

• 5:38Speaker 02

  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.

• 6:08Speaker 02

  Un-cryptic specific funds investing these token sales and then you step even higher in terms of dollar amounts and you see large venture funds, traditional hedge funds, family offices, endowments. So you get this whole spectrum and unsurprisingly, it's a it's a larger number of smaller dollar investors and then a small number of really large investors and that one 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.

• 6:48Anthony Pompliano?

  Got it. That makes a lot of sense. And then in terms of where those investors are located, are these mostly US-based? Are you still seeing a lot of activity from Asia or kind of a good mix?

• 6:59Speaker 02

  Total mix. Yeah. So and again, it's hard to characterize. It depends so much on the community of that individual project.

• 7:08Speaker 02

  Say that it varies from 70/30 US, non-US to 30/70 US, non-US. So, you know, we've got a natural user base in the United States by virtue of being an American company, but we have tons of users from outside the US and in some sales that actually outweighs. In fact, for some of the sales that we run, US users are not even allowed to participate. So in those ones, obviously, it's 100% ex-US, but when they are, it varies between, you know, 70/30 each direction. And for the non-US participants, I would say it's mostly Asia and, you know, a different, pretty even split between Southeast Asia and Eastern Asia, and then, and then a bunch of European investors and then

• 7:53Speaker 02

  others scattered around the world.

• 7:55Anthony Pompliano?

  Got it. That makes sense. And I guess one of the things that, you know, 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.

• 8:34Anthony Pompliano?

  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?

• 8:41Speaker 02

  Yeah, I am absolutely seeing that. And I would actually take it a step further and think about it first from what's a philosophical lens that people building crypto companies, working in crypto companies, supporting this crypto movement are proponents of decentralization. I mean, that's, 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

• 9:09Speaker 02

  epiphany that people have when they used to get interested in the 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,

• 9:53Speaker 02

  being really comfortable with instability happening in certain parts of a sector and not letting that disturb the whole, the whole balance of it. And so I think it starts with that mentality, but then absolutely on a practical level.

• 10:08Speaker 02

  Other crypto teams are distributed, even if your team itself is not distributed. So Coinlist is typically based between San Francisco, 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 of people in every different time zone. We're used to that paradigm. And so that certainly is true. And then I would agree, I, I think a lot of the, the benefit, and we can talk more about this too. A lot of the benefit that we've been pitched for, for crypto and that we pitched for crypto is benefits in time of instability.

• 10:49Speaker 02

  That it can function as this transnational, you know, safe from issues in any single place. Sort of asset base and technology. And so I think the people that are in crypto, the users, the investors, the members.

• 11:08Speaker 02

  Prepared for these times of instability and in fact, see it as an opportunity. And, and a chance to really demonstrate what crypto is, 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.

• 11:28Anthony Pompliano?

  Yeah. Has, has anything changed for you guys and how you're actually kind of operating internally? Anything you guys have done differently because of this?

• 11:36Speaker 02

  You know, I, obviously the team's gone remote and people are, are working from home. And we've built some processes to support that and making sure that people are, are comfortable. And productive and also happy, which is I think a, 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, and getting everything done and make sure they have the tools to do that, which is undoubtedly important. But there's a second piece too, that, you know, it's for us.

• 12:09Speaker 02

  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, and is happy and is, is talking to everyone, just even socially and, and encouraging that. So we've, we've built some stuff around that and, 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. You know, we've got the Cello auction coming up and it's still on track. We're, you know, launching more and more feature. Exchange and, and for us, it's just a matter of marching forward again because. You know.

• 12:54Speaker 02

  We're not working in the hospitality space. And if we were, we would be changing our plans. And I feel awful for friends who have had to do so in a space like that. But again, for crypto, if it is

• 13:09Speaker 02

  resistant at some level, let's keep marching forward and try and use this to not grow.

• 13:14Anthony Pompliano?

  Yeah, it's really interesting, kind of this balance. I feel like it's become cool to have the 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.

• 13:58Speaker 02

  Yeah, it's, you know, and I think you can build a great company in any direction. There's lots of evidence with that. But part of it is just the

• 14:08Speaker 02

  team that you end up build the people that are working together and and and for us, that social interaction is important. And and helps people stay fired up and focused on the on the work at hand 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 a little bit of money to go out and buy a drink of choice and and, you know, sit there all together on this on this happy hour. 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.

• 14:49Anthony Pompliano?

  I love that. What any update as to what people went and bought?

• 14:53Speaker 02

  We'll find out early next week. We just those those dollars just went out. We'll find out. Everyone's keeping a surprise until we we get

• 15:04Anthony Pompliano?

  I you're a brave man. I don't know whether to be fearful of what people are going to buy or excited.

• 15:13Speaker 02

  So we've got some good folks in the team.

• 15:16Anthony Pompliano?

  Yeah, so you you are normally based in San Francisco and then you're in Phoenix now. Maybe give us an update just on like, what are you seeing actually on the ground in those two cities? Around coronavirus and kind of the the reaction and maybe how it's affecting businesses in both those areas?

• 15:33Speaker 02

  Yeah, yes, it was interesting. I I was actually in New York most recently. Until about a couple of weeks ago, we're we're recording this on April 3rd here. And and it was mid mid March when I left New York. And so that was right when New York kind of shut down. When when everything, all the restaurants closed. And 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

• 16:09Speaker 02

  shutting down. And so, you know, from our team there and 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 a challenging time to be there. Certainly in San Francisco, where I I also I live.

• 16:33Speaker 02

  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 it has New York yet. But but San Francisco was early on shutting down a lot of things. And an abundance of caution. And again, not as densely packed as as New York, but certainly still kind of city, city scale and city pack. And I came to Phoenix and it's interesting here because well, there's certainly shelter in place now as of this week. And, you know, restaurants are are shut down or, you know, only doing delivery.

• 17:09Speaker 02

  A bit more of a spread out city for a lot of, 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, it is, it's shelter in place like San Francisco and New York. But by virtue of it just being more spread out, I think it, it has less of an impact on people's daily lives. You know, people are out running, biking, doing what they would, would normally do. It's just now people aren't, aren't going to the office as of this past week. But uh, yeah, it's interesting. I think that the question for me is where will clear up first and kind of open back up?

• 17:52Speaker 02

  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? Or, or is it a place like?

• 18:08Speaker 02

  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. So it's, uh, it's an interesting time and, and interesting to kind of see the, the contrast between these different places.

• 18:21Anthony Pompliano?

  Yeah, the, the contrast between San Francisco and New York is really interesting to me because San Francisco definitely took it much more seriously, much sooner. I had a couple of friends who, who, 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.

• 19:05Anthony Pompliano?

  And so, you know, I don't know really why that is, uh, but, but it just was a very distinct difference between the two cities for sure.

• 19:14Speaker 02

  Yeah, no, 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 sorts 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 and people looked at that and said, you know, this is this is concerning and advocated for some some action to be taken.

• 19:57Speaker 02

  And there's also an argument that, you know, at the time, obviously, the the virus was concentrated in China and San Francisco is much closer. And

• 20:09Speaker 02

  or travel there. And so so it could be too that there was just kind of more information flow or more obvious concern there coming between, you know, the West Coast and and China as opposed to China and New York.

• 20:20Anthony Pompliano?

  Yeah, there's a component. One of Planet's friends jokingly said coronavirus, I ride the J train every day like I'm not getting that. And and, you know, there's a kind of truth in every good joke, which essentially is saying, look, you know, 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 going to happen now, which in the face of a pandemic, it ends up being ignorance, right? But but but I think that's just a mentality difference, just as much as 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.

• 21:03Anthony Pompliano?

  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. Like, how's all of that changed?

• 21:21Speaker 02

  Yeah, so I, you know, it's a, 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 this exchange. Let's keep marketing. And the points you'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 in crypto among the kind of the true crypto community. Where when crypto's up, when the market's up, everyone's shouting and cheering and saying, you know, crypto's up, we're, we're winning, which is great. And then when the market's down,

• 22:08Speaker 02

  everyone's looking at buying season, you know, there's a sale on, on crypto right now. Now's the time to get in. And, you know, I, 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, you know, time to get in at a discount. And, 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 the space.

• 22:49Speaker 02

  And, and I think you're, you're certainly seeing that in the markets too, that after the big drop a few weeks ago in, 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,

• 23:09Speaker 02

  a lot of it's business as usual. So when we think about communicating with investors or fundraising, you know, we, we are, we don't have any plans to fundraise imminently. We're fortunate to, you know, be doing well business and, and be running these sales and generating revenue. And, and we raised a great round last year led by Polychain with Jack Dorsey and Collaborative Fund and a bunch. For 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 or the board is, okay, well, what what's the downside scenario here? How bad could this be? And, you know, because the assumption is that things are kind of neutral or are good, then you're in good shape, obviously.

• 23:53Speaker 02

  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

• 24:08Speaker 02

  the global economy at a level where crypto is just inevitably impacted as as yet another asset? What happens then? And I think our view there is you 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 will have a much more clear picture of where this is going and 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,

• 24:50Speaker 02

  there'll be a 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.

• 25:05Anthony Pompliano?

  Yeah, it is. It's one of these weird things. I was talking to somebody about it from a small business perspective, right? So let's say you're that local restaurant and 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 going to open up in two weeks and you could kind of make some educated decisions based on 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 ballgame because now there's no kind of true analysis of how much capital do I have?

• 25:50Anthony Pompliano?

  You know, what my costs are and and if I ever will open back up, right? Because there's a lot of businesses that basically just going to run out of money, even if they they fire eighty percent 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 or other small businesses are. How have you thought about kind of the strength of the balance sheet? And and kind of, are you preparing for kind of six months of this, eighteen months of this? And just kind of talk me through the the logic and the frameworks that you've used to kind of think through that?

• 26:23Speaker 02

  Yeah, well, I'd actually point out one more big difference between, you know, a business like a restaurant and a business like a startup. Like us is cash on hand. So I I saw a chart the other day about the average cash on hand. Like how many days of operating expenses to different businesses and 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 forty six days. I think it was real estate businesses have like on average forty days of cash on hand.

• 27:08Speaker 02

  For all of these businesses, their cash on hand is, you know, between, let's call it ten days and two months generously. And that's just because of how these businesses work. They're cash flow 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 it 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?

• 27:53Speaker 02

  Usually here, you 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 the war chest and then keep going. But in this case, it's.

• 28:09Speaker 02

  Official models that wasn't very close to dying has six, 12, 18, 24 months of runway in the bank because that's what they have to do anyway. 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 six to 18 to 24 months of cash in the bank. Whereas for a restaurant, obviously, seven days, if you've got 15 in the bank is a life-changing amount. So that's, that's one dynamic, you know, for us. Again, I think it's about preparing for the downside. We're in a comfortable cash position. We weren't

• 28:50Speaker 02

  going to raise anytime soon. 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. And then, you know, in the next three months, reevaluate. 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. How do we address that? But for the time being, we're looking at it and we're saying, you know, this, this feels like a, you know, a

• 29:35Speaker 02

  manageable position for us. And there's also, you know, government assistance that startups can theoretically apply for, assuming it all gets sorted out where you might get another month or two of, of runway by virtue of these, these government loans as they get processed. So that's another angle too. But yeah, for us, you know, don't ramp up spending. Let's check in a couple of months and see where we're at and, and push forward from there.

• 30:01Anthony Pompliano?

  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 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. 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 shared 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?

• 30:45Anthony Pompliano?

  And you don't have to name who the investor is, but just things that they've been able to kind of share with you that you think other founders would benefit from understanding as you kind of continue going through this?

• 30:55Speaker 02

  Yeah, I mean, the the most obvious one, and I say obvious, but it's also something that I think people need to be reminded of in the startup community often. And investors

• 31:09Speaker 02

  sometimes say like, wow, yeah, is don't die, right? This is like, I mean, the most blindingly obvious piece of advice out there, but it's almost like people forget at 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 10 years, it means you figured out something that works. So odds are, what you need to do is stay alive, keep pushing forward, maintain your advantages and and not die. And and I think, you know, it's easy to say, go, go, go, growth at all costs. Startups are all about growth, which is all true.

• 31:50Speaker 02

  But the the thing that kills startups is running out of really nothing else. And so, so I do think that's just an important thing to remember on on the more tactical level.

• 32:04Speaker 02

  There's all sorts of things you can do if you're in a

• 32:09Speaker 02

  Mission, you're seeing teams do this right now. Obviously, there's layoffs, which is really sad. You know, I was talking to someone the other day who was talking about 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? And if you're in a position where you need to cut burn, that makes a ton of sense, too. People are getting really creative and, 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

• 32:50Speaker 02

  the letter they sent in 2008 when that was happening and think about those considerations. So it's so much of it depends on where the startup is and asset 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.

• 33:20Anthony Pompliano?

  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, right? When you kind of look, my favorite example is obviously the airlines where they've 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 know, 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.

• 33:56Speaker 02

  Yeah, I mean, I have a lot of thoughts on the airlines. I, well, I think it's a, it's an issue incentives, right? So first of all, there isn't

• 34:09Speaker 02

  In fact, a belief that maybe 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. 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,

• 34:34Speaker 02

  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, 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. For a lot of these airline executives,

• 35:09Speaker 02

  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, 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, 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,

• 35:48Speaker 02

  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, you can walk. Pay or or push through. And so it speaks to me more about the less about people forgetting and more about just the power of incentives. As a startup founder, you have very different incentives than an airline executive. And there's there's kind of a beauty in how startups are structured for that reason that you're you're in. And and you need the thing to work for for you to be successful.

• 36:32Anthony Pompliano?

  Yeah, the 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 are, you know, being implicated in a lot of this. 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 now they're kind of stuck in the stuck in the sand, if you will.

• 36:53Speaker 02

  Yeah, well, I mean, someone's got to be in those seats. And 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 and now here's my chance to, you know.

• 37:09Speaker 02

  And yeah, they may have gotten it wrong.

• 37:11Anthony Pompliano?

  For sure. Well, so what's at Coinless? What's your pitch to to projects as they're looking to fundraise and stuff? Kind of what's the pitch now? And for all the ones that are listening, what can you kind of explain to them?

• 37:24Speaker 02

  Yeah, the pitch at a very high level is very simple.

• 37:29Speaker 02

  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 Coinless as a really trusted place at a place where the best projects run their token sales. And so all those factors together increase the success of an already great project that is trying to run an effective.

• 38:08Speaker 02

  You know, some of the stuff that we do for them includes of 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 you know, 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 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

• 38:51Speaker 02

  teams shouldn't be spending their time on because they're only going to do this once or twice. And I 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 you know, oh, for us, every great project that that works with us and that we're fortunate to partner with makes the pitch even stronger for the next one. And and you know, 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 great, we get really fired up and 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 pour more gas in the fire.

• 39:37Anthony Pompliano?

  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 the like criteria you look for or just structure or anything like that?

• 39:49Speaker 02

  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 stronger to market and all of that.

• 40:08Speaker 02

  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 in 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 and every single application, uh, does need its own, its own token. 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. 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

• 40:49Speaker 02

  decentralization and, and, you know, blockchain technology are going to 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

• 41:09Speaker 02

  application level ones then can, can make a compelling case for using a token in their ecosystem.

• 41:14Anthony Pompliano?

  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 they kind of were waiting for that to come out?

• 41:25Speaker 02

  Yeah. So, uh, if you, well, anyone is welcome to reach out to [email protected] at any time. If you're a project, uh, looking to, to engage, that's probably the best way to do it and we'll get right back to you and get a conversation going, um, and talk about how we could, how we could help and learn more about what you're doing. If you, if you're a project and you're reaching out to [email protected], I would say, um, definitely include some information, let us know what you're up to, uh, and, uh, and we'll, uh, we'll, we'll dig in and do our research. If you are a user looking to trade or, or participate, um, coinlist.co/trade go, you can sign up right now. We, um, are just starting to roll this out. So it's.

• 42:09Speaker 02

  First of all, from an asset perspective, so it's Bitcoin, Ethereum, Algrand, USDC, and then US dollars on an off-ramp 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 okay, 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.

• 42:46Anthony Pompliano?

  It's awesome. I love it. Last question for you before we wrap up. Any cool quarantine plans? Anything that you got in the next couple of weeks that you think is cool?

• 42:58Speaker 02

  You know, I have been using this, nothing particularly cool, although I've got a friend hosting a virtual DJ set tonight, and there's lots of good virtual parties happening. 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, certainly acknowledging all the terrible stuff happening around the world, having a chance to reset a little bit

• 43:42Speaker 02

  and, you know, maybe not try and do crazy, crazy, interesting things all the time and just take it a little more slowly for a few weeks has been a really pleasant change of gears. And we'll see how long, we'll see how I feel longer it lasts, but for the time being, a reset's a good thing.

• 44:00Anthony Pompliano?

  Yeah, it's one of these things where I jokingly say like, the world's been forced to 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 that just it would've been hard to kind of experience cold turkey without something like this happening. And so that may be some of the benefit of all of this, you know, coming out the other side of it.

• 44:36Speaker 02

  I think I think you're right. I also I'm very sensitive to the time. So I think everyone much everyone is going to love a week of remote work. 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. And so seeing seeing how that all shakes out and how people's perspectives change, depending on how long we're we're in this situation is something else to look out for. But I agree, everyone everyone benefits from a little little time at home.

• 45:05Anthony Pompliano?

  Absolutely. All right, Andy, listen, I appreciate you jumping on and doing this. Anyone that is interested, go check out coinlist.co and we'll have to do it again as you guys keep progressing here and eventually get that trading platform up.

• 45:19Speaker 02

  Sounds like a plan. Good luck and stay safe out there.

• 45:21Anthony Pompliano?

  Yeah, you as well.

• 45:25Anthony Pompliano?

  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 and see you next time on Off the Chain.