Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit. Can you tell us a little about your backstory and how you grew up?
Previously, I was CIO at Capital One, CIO at Bank of America, COO at BondDesk and CTO & Head of New Business at 888, in addition to being the founder of Yallo, Exactor, Navion, Securitize. I have always been an entrepreneur and a creator, with a love for art along with business.
As the creator of SPICE VC, I’m passionate about investing globally in platforms and ecosystem providers enabling access to capital markets, banking, real estate, and other industries enhanced through Blockchain technologies. The fund focuses on companies who stand to benefit the most from the massive growth of the industry. Combining institutional know-how, hands-on management, entrepreneurial innovation and professional investment experience SPiCE’s management team has been involved in hundreds of tech funding rounds totaling billions of dollars; as entrepreneurs, investors, and executives.
Is there a particular book, film, or podcast that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
Shakespeare’s Macbeth. My favorite book as a kid was a thick and heavy book — “The complete works of William Shakespeare”. My treat when I was sick was to cuddle up in bed and read through the book. Most people’s take away from Macbeth is something like “fighting destiny is futile.” What I take away from the story of Macbeth is more about the need to question what we perceive and interpret as reality. The story is also an exercise in how we read signs, identify opportunities and how we should follow our vision, dreams and passion, while being guided by values and grounded in reality so they remain attainable.
Is there a particular story that inspired you to pursue your particular career path? We’d love to hear it.
I am curious by nature and love challenges. I simply followed my intuition, passion and interests. I started with a degree in Math and Computer Science. This career path led me to change industries every few years (Semi-Conductors, Energy Management, HealthCare, Financial, Gaming, Investment and trading), get an MBA and continuously learn new disciplines and keep developing new tools and capabilities. I’m continuously looking for new growth challenges to leverage my compounding insights.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
I was extremely lucky to have had incredible managers and peers almost in every role I had throughout my career. I learned a lot from all of them, and many of them took the time and interest in mentoring me and challenging me to continue growing.
However, if I had to pick one person who contributed the most to getting me to where I am, it would be my wife and life partner — a business professor who left academe to directly help drive the success of growth companies and international corporations. Her insights, uncompromising integrity and keen curiosity were the most significant contribution to where I am today.
Are you working on any exciting new projects now? How do you think that will help people?
Yes. I have been managing SPiCE VC, a Venture Capital focused on the Blockchain and tokenization ecosystem over the last few years. It is a fascinating and complex ecosystem that is growing faster than any ecosystem in industry and will have profound impact on most industries we know over the next 10–15 years. SPiCE provides investors a diversified exposure to this immense growth.
SPiCE VC’s current portfolio includes 15 high-growth companies within the blockchain and tokenization ecosystem, including INX, Archax, and Ripio. SPiCE also successfully spun out Securitize, the leading digital security issuance and management platform, and developed several areas of IP including the tokenization of limited partner positions in VC firms, a trend the industry is following.
Most recently, SPiCE became the first venture capital firm in this growing space to experience three portfolio companies successfully going public. The firm also reported a Q2 2021 NAV up more than 49% over Q1 2021, and over 184% unrealized gains in the first three years of operation for its early investors.
Ok super. Thank you for all that. Let’s now shift to the main focus of our interview. The cryptocurrency industry seems extremely dynamic right now. What are the 3 things in particular that most excite you about the industry? If you can, please share a story or example for each.
- A new paradigm: The cryptocurrency industry brought with it a new paradigm, the value of the network. For many modern businesses, this may be as significant as the traditional assets we are used to observe when assessing a business entity. This drove (and will continue for the foreseeable future) significant waves of new innovative business models, services and products.
- New technology concepts: Distributed ledger technology concepts (aka: Blockchain) with their benefits and challenges came to our collective awareness due to the growth in popularity and use of cryptocurrencies
- Evolution: Cryptocurrencies delivered ‘a whack on the side of the head’ to most financial industry verticals (especially to Banking, Payments, Lending, Investments) and the traditional ways they are managed, regulated and controlled, and are forcing them to re-invent themselves, evolve and adapt quickly (or become obsolete).
What are the 3 things that concern you about the industry? Can you explain? What can be done to address those concerns?
With any disruption in a legacy industry, including the way financial transactions are currently managed, there are always bumps in the road and people who are reluctant to change. However, instead of discussing concerns, it’s imperative that we change the narrative to “opportunities.”
The world’s financial system is poised to be the most significant participant and benefactor of the blockchain revolution, with digital finance and the global monetary system leveraging distributed ledger technology (DLT) to modernize financial markets. Specifically, blockchain is “democratizing” a variety of asset classes (including digital securities) by enabling participation in opportunities that have previously been only accessible to large institutional investors.
As far as the digital finance ecosystem (i.e., NFTs, DeFi, Digital Securities, CBDCs, etc.) there are many opportunities and room for rapid growth. Blockchain is becoming a key mainstream enabling technology in verticals like Capital Markets, Banking, Payments & Money, fundraising, etc. — driving further innovation. Dominant players in these systems include the world’s largest financial institutions and central banks.
Specifically, blockchain/DLT technology is driving the growth and mass adoption of digital securities, which represent a crucial component to modernizing capital markets and creating more profitable financial products.
Making all the world’s securities digital promises improved accessibility, accuracy, efficiency, and execution to a wide swath of market participants, services, operations, and processes. Digitization aspires to reduce costs, empowering businesses to capture market opportunities through expediency. These assets also provide more control and protection for market participants, whether addressing potential issuances or how investors hold and manage their assets.
What are the “myths” that you would like to dispel about cryptocurrency? Can you explain what you mean?
The biggest myth about cryptocurrency is that it’s a volatile, useless “hobby” for techies. While its rapid price surges and even faster declines may be off-putting to some, the fact remains the blockchain based digital currencies like Bitcoin and others are here to stay and will become woven into our everyday financial lives sooner than we think.
How do you think cryptocurrency has the potential to help society in the future?
Blockchain/tokenization is “democratizing” asset classes and enabling participation in opportunities that have previously been only accessible to large institutional investors, but now is becoming a key mainstream enabling technology in verticals like Capital Markets, Banking, Payments & Money, fundraising, etc.
Making all the world’s securities digital promises improved accessibility, accuracy, efficiency, and execution to a wide swath of market participants, services, operations, and processes. Digitization aspires to reduce costs everywhere, empowering businesses to capture market opportunities through expediency. Digital securities provide more control and protection for market participants, whether addressing potential issuances or how investors hold and manage their assets.
Recently, more people have been scrutinizing the ecological impact of crypto mining. From your perspective, can you explain to our readers why the cryptocurrency industry is creating an environmental challenge?
There is a claim that mining is consuming immense amounts of electricity which puts burden on energy creation (in most places not from clean/renewable resources). However, regardless of if this is true or not (there is a raging debate on that) this is a result of the original method early cryptocurrencies are using to verify transactions, known as “proof of work”. There is already a move with some cryptocurrencies (like Ethereum) to “proof of stake” and to other forms of validation and distributed ledger technologies which are much lighter on processing and energy consumption. I believe that within a few years this will no longer be an issue.
Recently, more people have been scrutinizing cryptocurrency’s impact on illegal activity. From your perspective, can you explain to our readers why cryptocurrency, more than fiat currency, is seen as an attractive choice for criminals?
Several main concepts cryptocurrencies were originally built on make it easier for fraudsters to operate decentralization, anonymity and transparency. Decentralization means that there is no intermediary that can get involved and ‘fix things’ or undo a transaction (think about the traditional world where you call the credit card company and cancel a fraudulent transaction). Anonymity (which with increased regulation is going away) makes it easier for fraudsters to hide and make the money ‘disappear’. Transparency, which means that anyone can see every transaction, makes it easier for fraudsters to identify opportunities.
Add to the mix, the complexity of technology and interface for new players, as well as the fact that this domain is not as tightly regulated as the securities industry (yet). All of this combined creates the potential for more fraud. However, smart technologies and regulations are solving these issues as we speak.
From your perspective what can be done to address or correct these concerns?
First, there needs to be increased regulation. Legislators and the relevant regulating agencies are working on that. It is certainly challenging and will still take some time, but tighter regulation and protection will continue evolving over the next few years.
Secondly, the technology, user experience and increase security through technology and insurance, will evolve as well over the next few years. This is due to the increase in participation and size of the crypto market and the entry of most banks and institutional investors into this domain.
Ok, fantastic. Here is the main question of our interview. What are “The 5 Things You Need To Understand In Order To Successfully Invest In Cryptocurrency?” (Please share a story or example for each.)
- Understand Volatility and Risk: Understand the volatility and risks involved with cryptocurrency investment and assess if it fits your risk tolerance.
- Understand cryptocurrency ecosystem complexity: Understand the complexity involved in cryptocurrency investment (tax reporting, hardware and wallets, exchanges, etc)
- Understand what drives crypto prices and your motivation to invest in cryptocurrencies. There are many purported experts in this domain. At a given time you can get completely opposing advice as to what is the right thing to do. Unlike in the securities industry and given the nature of crypto assets, there are no reputable ‘rating agencies’ to rely on.
- What Allocation works for you: Understand what % of your portfolio (if at all) you feel comfortable dedicating to crypto related exposure.
- Understand there are multiple options: Understand that there are multiple ways to get exposure to the cryptocurrency industry and assess which of them better fit your portfolio.
And based on all the above — develop your own strategy or creating and maintaining a crypto/blockchain exposure that is right for you.
What are the most common mistakes you have seen people make when they enter the industry? What can be done to avoid that?
- Tax Implications: Not understanding tax implication: many investors in cryptocurrencies do not understand the tax reporting and taxation implication of investing in cryptocurrencies. Knowing what is required and how it works upfront can save tax money and a lot of busywork.
- Not being able to stomach the volatility: Investing in highly volatile assets (cryptocurrencies are) is not for the faint of heart. Underestimating volatility vs. one’s ability to handle the roller coaster ride involved usually leads to poor investment decisions.
- Not following a strategy: Not having a strategy and doing what “everybody else is doing “ — usually means buying high and selling low…
- Not taking the time to understand the risks: risks like fraud, theft, and loss of keys which are different than in the traditional securities/banking environment and not taking the necessary steps to avoid them can frequently result significant loss.
Do you have a particular type of cryptocurrency that you are excited about? We’d love to hear why.
This is by no means investment advice, but in terms of my personal crypto and blockchain exposure I follow what I preach. I favor some of the “main cryptocurrencies” as well as some DeFi related assets. But I also have exposure through some ETFs (Exchange Traded Funds) as well as some direct investment in related publicly traded stocks.
There’s no lack of investment opportunities in the digital finance world. From investing directly in cryptocurrencies, to investing in the comprehensive blockchain ecosystem, individual investors can easily find the right methods that fit their individual needs. But before jumping in, learning more about each of these investment options, understand their risks, and assess how much risk is manageable for you. Just like any investment, taking the time to talk to experts and doing your own research can help you decide the right course of action for you.
Thank you so much for these excellent stories and insights. We wish you continued success and good health!