blockfolio pitch: grand prize winner@fintech hackathon 2015
TRANSCRIPT
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William Burnett | Irvin Cardenas | George Li | Mark Painter
Bl ckf li
Democratizing Alternative Investing
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Underserved Retail Investors
What’s the problem?
• Retail investor have a heavily concentrated equity exposure (often effectively > 80%)
• Wealthy investors have access to alternative investments
• Portfolio theory strongly recommends diversification into such assets
• Retail investors are effectively locked out of alternative assets
• Access to such assets would enable investors to diversify their portfolio
• Equity Markets have high volatility and under perform in a downturn
Indicative Retail Portfolio
Equity*
Cash and
Fixed Income
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A platform to
Democratize Alternative Investments
A marketplace for everyday investors to diversify their portfolios
Our solution
Provides a significant new source of capital to underserved markets
Utilizing blockchain to improve transparency with smart contracts
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Community Bank Loans Direct Real Estate Debt and Equity
Capital to underserved markets
• Community banks continue to raise capital levels to appease regulators post‐crisis, undermining their ability to underwrite small business loans
• $180bn in Small Business loans not been issued
• Blockfolio reduces
• Offers a different risk profile to equity or debt REITs
• Debt asset class can provide a steady level of returns
• Investors can tailor their Real Estate Debt and Equity exposure to hedge their real world exposures
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Opaque existing securitization market not functioning
effectively
Lack of liquidity in crowdfunding and
alternative investments
Lack of underwriting standards and support model in most
crowdfunding solutions
Issues with current alternatives
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Welcome to
Blockfolio
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Blockchain Technology...
The Value Proposition
Diversify your portfolio
Power to exit your investment
Transparency in consolidated assets
… enabling efficient future scalability
Search for the ideal investment
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Our target market
Investors with more than $100,000 but less than $2,000,000 in investable assets, including their 401k’s, with the willingness to learn more about investment
risk and their options
Asset managers with clients with $1,000,000 to $5,000,000 in investable assets with the desire to enhance the risk adjusted returns of their clients
Originators of loans that have a track record of high quality underwriting and are looking to free up their balance sheet to make new loans to their customer base
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Targeting 5% of the 5%
How we will make money
2016Demand Side - Addressable Market 1% of the $20tr of retail assets, 1% Target Acquisition
2020
Total Target Markets Target Investments
Alternative Adoption
Total Addressable Market
Acquisition Target
1% Acquisition Target
Transactions Fee Revenue
2016 $20,000,000,000,000 1.00% $200,000,000,000 1.00% $2,000,000,000 200,000 1% $20,000,000
2017 $20,000,000,000,000 2.50% $500,000,000,000 2.00% $10,000,000,000 1,000,000 1% $100,000,000
2018 $20,000,000,000,000 5.00% $1,000,000,000,000 3.00% $30,000,000,000 3,000,000 1% $300,000,000
2019 $40,000,000,000,000 3.00% $1,200,000,000,000 4.00% $48,000,000,000 4,800,000 1% $480,000,000
2020 $40,000,000,000,000 5.00% $2,000,000,000,000 5.00% $100,000,000,000 10,000,000 1% $1,000,000,000
Demand Side - Addressable Market 5% of the $40tr of assets, 5% Target Acquisition
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William Burnett
High School Student
George LiB.S. Computer
Science
Mark Painter
Our team
Irvin Steve Cardenas
B.S. Computer Science
CFA, FRM
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Appendix
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Institutional Investors Retail Investors
Increased capital pool with sophisticated
managers
Community Loan demand of $180bn been unmet.
$20tr of retail assets+$1tr to Alternatives
Expanding Total Addressable Market
Community Loans and Real Estate
High Margin, Low Volume Lower Margin, higher Volume Low Margin, High Volume
Education of investors to adjust their portfolios to
Alternative Assets: 1% and then to 5%
Incorporate the wider financial Markets.
$20tr of Asset Under Management in non ‘Institutional’ funds
+ $1tr to Alternatives
Investors
Investments
Asset Managers
Block-chain utilized on the expanded
Student Loans, Crowdfunding Loans, Larger
business loans
All Non-exchange
based assets
Total Addressable Market
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● Open registration attracting customers through financial
● Partnership with large retail investment platform
● Analysis of ‘white label’ option for larger brokers
● Asset Manager acquisition to create investments for their clients
Customer Acquisition
Investment Acquisition● Partnership with The Independent Community Bankers
of America
● Active acquisition strategy building relationships with trusted originators
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This protects Accredited investors on crowdfunding websites and businesses receiving the capital through crowdfunding.
American JOBS Act (2012)
By law these transactions need a middleman (broker or website) and SEC (Securities and Exchange Commision) must approve crowdfunding websites. The basic costs would be $6,000 to fill a “form C.”
Rule 415 under the Securities Act (1933)● Allows for continuous offering of notes
● Utilized by LendingClub