In an interview with Switzerland-based crypto advisors, our representative Alice Carl reached out to the co-founders Luigi Matrone and Francesco Abbate who added that they are in process of creating a new funding ecosystem powered by blockchain technology which is expected to revolutionize the way traditional VC funding model works. Read the complete interview below:
- What was the main impetus behind Swiss Crypto Advisors? Can you summarize your vision in few words?
I believe blockchain and cryptocurrencies represent an equal if not superior technological trend than the .com of the beginning of the century. In 2017, after a few years as investors, Francesco Abbate, Omar Ulrich and myself, decided to embark in an entrepreneurial journey that gave birth to Swiss Crypto Advisors. Our ambition is to make blockchain and its financial ecosystem widely adopted, contributing to the growth of the industry.
- Are you one of the first to enter the VC landscape in Switzerland with blockchain technology? What actually attracted your attention?
Switzerland is a financially savvy nation. While other countries around the World were making headlines by fighting cryptocurrencies, the Crypto Valley was created in Zug. Recently other cantons like Geneva decided to take a public commitment and become ICO-friendly. I’m in Switzerland since 2009 and I’m glad to see startups wanting to establish here their headquarters. Hence I believe we are in a privileged position to welcome players in the industry and support them early on through our consulting services, including Legal support to establish their operations here and prepare the documents needed for FINMA.
- What is the economic model behind your blockchain adoption?
Swiss Crypto Advisors is constantly evolving. In a market that never sleeps, we need to listen to the market and provide what our clients want. Take www.decrypto.biz, we created it because we know as a fact that despite everybody has heard the word “bitcoin” at least once, very few know what it is, how it works and what to do with it. We believe in education as a primary source of adoption of any new technology and Decrypto does just that. As advisors of http://www.nextgeneration.fund/ Swiss Crypto Advisors is constantly exposed to the industry, from conferences to investors to startups. It became clear from such interactions that the majority of the blockchain startups, including those in the top 50 for market cap, need significant support when it comes to creating a better business model, speaking the language of the end user and creating better communications. For this reason, we created the consulting arm of the company and today we are proudly helping more and more startups to become consumer-friendly, hence driving adoption.
- What are the advantages of having a blockchain-based VC ecosystem?
Blockchain needs VCs and VCs need blockchain. It is important to reduce to a minimum if not eliminate all scams as they demolish retail investors and consumer confidence. VCs can contribute to doing so thanks to the thorough investment evaluation process that they put in place.
- What do you think about Swiss people and their perception regarding Bitcoin and the underlying blockchain technology?
I do not think that we should generalize about Swiss perception, but what I can definitely say is that Switzerland as a full political and economic ecosystem is making a very intentional effort to establish itself as the most advanced, and friendly ecosystem for blockchain based companies and hence crypto and ICO.
- Do the guidelines laid by Switzerland’s Financial Market Supervisory Authority (FINMA) in February affect the future of blockchain in the region?
The results show that FINMA guidance and regulations have been attracting a very high number of ICO to the country, Switzerland is for sure top 5 in the world on this and on an ascending trend, although more countries are trying to attract these investments (Estonia, Cyprus, Singapore). I think that it is not just the guidelines, which per sè are very serious and open to the blockchain developments, I think it is the full structure built around those, the very competent teams working at FINMA providing quick and thorough feedback on the projects, the various cantons investing resources on this. It is remarkable for example to see the work done by the Geneva canton lately, they mapped the full ecosystem in the region (glad that Swiss Crypto Advisors is one of the few companies mentioned), and they issued the first guide in support of ICO-projects, which will be a reference point in the future and will attract even more valid projects to the canton.
- Do you think ICOs should simply ignore FINMA’s guidelines or have faith in the blockchain technology?
I think companies who want to do ICO in Switzerland should absolutely stick to FINMA guidelines, submit the projects and wait for the feedbacks before proceeding with the token generation events. I think FINMA regulations are not a burden, on the contrary, they are necessary clarifications and boundaries to conduct business in the most appropriate ways and attract more institutional investors.
- With the new regulatory compliances and blockchain acceptance, where do you see the VC ecosystem heading in the Crypto Valley?
I believe we might see in the future a convergence between VC and ICO. What I mean is that ICO is not a goal, it is a mean to an end, and the end is fundraising, so it is an alternative to classic VC. Reality is that the latest regulations and blockchain acceptance attracted more and more “classic” investors into space. This means that great projects will more and more attract capital at an early stage without having to do a public sale, or they might do a public sale only after some rounds of pre-sales financing done by VC. This does not mean that they will not become cryptocurrencies or create new tokens, simply that there might be both first by institutional investors like VC who will take an early position on those. This also means that we might see more security tokens in the future, as they resemble more the equity position that VC is used to take, compared to utility tokens which are the vast majority today.
- What about the other VC highlights in Switzerland? What’s the hot talk in the VC market regarding blockchain?
I am seeing VCs very interested in few blockchain applications to real industries. The two which I would call out are energy and sustainability. The latter in particular will get to me more traction in the next years, given it is clearly a hot topic with important and urgent real case applications, and very interesting companies are born these day using blockchain to really measure and rewarding people making an impact on this.
- What are your expectations? How do you think early exists in a blockchain VC funding will stand revolutionary?
My expectation is that the ICO space will be largely funded by VC in the future. We will see more ICOs of an average lower quality as hype attracts some speculation, but few will indeed be solving critical issues or re-shaping specific industries to work better, cheaper, or faster. These ones will be backed by VC and private equity at a very early stage, so at the end, the VC market will be in good health and not replaced by ICO at all.
Our representative Alice was convinced that there is hope and a blockchain based VC ecosystem in Switzerland will lead to a diversification of the financial landscape. This will likewise create a better balance between centralized and decentralized service providers along with a financial landscape which is more efficient and robust in resisting threats.
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