A hedge fund recently made news by securitizing its LP units as digital tokens and selling them as tradeable (thereby liquid) assets. This brings technology to the VC industry that should truly challenge the extant VCs right? Well, yes and no. You see, the tokenized thingy is cool and all, but it really doesn't take full advantage of the technology at hand. After all, 2.5% & 25% is a pretty steep fee. Veritaseum, in anticipation of its upcoming ICO (online road show and executive summary ), is prepping to launch what we call an ICODAO, and Distributed Autonomous Organization that collects Initial Coin Offerings. We are attempting to make this nearly completely autonomous, tested (don't think "TheDAO" debacle, and considerably cheaper than hedge funds that you see these days. Now, the ICODAO is not a hedge fund, or a fund of any kind. It's sort of an autonomous software entity, that uses our software token, "Veritas" to allow other entities and individuals to gain access to its accumulated exposures and services. Those services are basically the sniffing our and collecting the best of the best ICOs and token offerings available, and the exposures are the natural result of the collection and holding of said ICOs. A world class research team will supply the analytical chops (click here if you don't know, the same team that predicted Bear Stearns, Lehman, CRE and housing crash, Google, EU sovereign debt crisis, etc.). Back to that in a minute, let's look at what's happening in the world off(block)chain.
Yale University, one of the most-watched and best-performing college endowments, defended the fees it pays to external managers, saying in an annual investment report that a low-cost passive strategy would have “shortchanged’’ the Ivy League school’s students and faculty.
Fees for private equity and hedge fund managers, some of whom command 2 percent for management and 20 percent for performance, or even more, have become a heated topic. Berkshire Hathaway Inc.’s Warren Buffett and writer Malcolm Gladwell have taken public shots at the structure, and Gladwell specifically targeted Yale two years ago.
“What Buffett, Gladwell and other fee bashers miss is that the important metric is net returns, not gross fees,’’ the report said. “Weak or negative returns would result in low or no performance-related fees, but would be a terrible outcome for the university.’’
Yale’s investment strategy emphasizes long-term active management of equity-oriented, yet often illiquid assets, with more than half the fund in alternative investments. Almost a third of Yale’s 2016 allocation is in private equity, including 16.2 percent in venture capital and 14.7 percent in leveraged buyouts. About 22 percent is in absolute return with hedged-like strategies.
“Performance-based compensation earned by external, active investment managers is a direct consequence of investment outperformance,’’ it said.
Yeah, I get it. Some guys are just better than others at investing, and they should be compensated commensurately. The question is, are there high performers that can be had for less than 27% of your profits? Let's take a look at a theoretical blockchain focused hedge fund vs the ICODAO - from a graphical perspective. Realize that the ICODAO charges a flat fee for its services. It's not a hedge fund, so there are no performance fees, but there are certain things that it may not be able to do on its own (yet), hence has to contract out for. The fees are to cover what it takes to make this autonomous entity self sustaining. It may very well be the case that these fees will shrink over time. We don't know, we're breaking new ground here. The hedge fund fees are self explanatory.
There you go. In a nutshell. Here's more...
Yes, the machines are taking over! Be sure to take part in the Veritaseum Token Offering, take part in the paradigm shift! Feel free to contact me directly with any queries via the contact form in the top menu.
A long form, interactive presentation can be found here in the form of a virtual roadshow - Informational Presentation. To get the most out of such a dense offering, be sure to make use of the interactive table of contents on the 2nd slide, and please click through all of the videos, links to download the various documents and take your time to read and understand what Veritas is and is not, and what Veritaseum is and plans to be.
A last minute Q&A and AMA (ask me anything) video on the Veritas sale can be found here.
Informational Presentation: To get the most out of such a dense offering, be sure to make use of the interactive table of contents on the 2nd slide, and please click through all of the videos, links to download the various documents and take your time to read and understand what Veritas is and is not, and what Veritaseum is and plans to be.
This is the Veritas Crowdsale landing page where you will find instructions for buying the Veritas ICO, to be launched at the US markets open - April 25. 2017, 9:30 am, EST. Below, please find a cornucopia of informational videos and presentations to bring you up to speed on Veritas, Veritaseum and our future prospects and plans. This is a very.... unique offering.
Come back here on the 25th of April for more information and the links necessary to access our crowdsale and initial coin offering smart contracts, be ready to get started! In the meantime, come and find out why we're so excited about this... transformation of capital markets...
A YouTube commenter asked a very good question that we will like to take some time to answer. The question was, verbatim:
I've watched your video and gone through the slides. The exchange I "get". I think it has great potential. However, I don't understand the case for Veritas at all and I think many others will feel the same. You state that Veritas can be used to buy consulting and advisory services. OK, but what is the cost in Veritas? Will that change or will it be fixed? What is the advantage of using Veritas over cash to buy this information?
The cost will be our stated rates, and will fluctuate with the VeUSD exchange rate. The advantage of using Ve over cash is that our consulting and advisory services are a very scarce commodity (like most labor), although the research is much less so (as it can scale via platform). Thus, Veritas holders get priority. I want to make it perfectly clear that Veritas ICO is much, much more than mere research and advisory. Consider that the icing on the cake. The ability to redeem your Ve against us gives instant value. In addition, we have a working, beta product already developed (not quite production ready for the masses, but it has been running in the public doman for serveral years now). In addition, we also own our IP. Where some coin offerings only offer the promise of future development (as do we, to be sure), we also have something to offer in the here and now.
You also state that Veritas will be needed to gain access to various digital platforms. That sure sounds like a "fee" to me unless Veritas is free which is obviously not the case. So the whole innovation is free contracts that are not really free?
You are confusing ongoing management and administration fees (among other constant fees as well as sales fees) with needing the Ve token for access to the P2P Capital Markets. The digital asset pools will exist autonomously on the blockchain without a centralized manager to charge any fees for profit or rent seeking gain. Think of using ether to gain access to the Ethereum blockchain, or bitcoin to gain access to the Bitcoin blockchain. One could pose the argument that entering a smart contract on Ethereum or Bitcoin isn't free due to the cost of ether or BTC, but in all practicality those tokens are the denominating asset for their respective blockchains an contracts. The same will hold true for Veritaseum contracts although we will strive to be token agnostic. You will be able to gain liquidity (to some extent) to exchange tokens, and use various assets in our asset pools as long as you have Ve (Veritas) as the key to entrance.
More importantly, the fees that truly matter, that enable the multitude of multimillion dollar Wall Street bonuses and that eat up the vast majority of investor's capital, are ongoing management and administration fees. Reference this screen shot from slide 10 of the Veritas presentation.
As stated above, think of Veritas as Ethereum for finance, investment and interactive value exchange. The difference is that we will have rapid development templates for certain (and hopefully many) contracts that allow the lay person to quickly create, implement and execute their own smart contracts without the need for, or assistance of a developer, finance whiz or lawyer (although that does not mean that it wouldn't be a good idea to have specialized expertise on hand when dealing with certain transactions, hence Ve for advisory). In order for you to access the smart contract templates (or access the P2P Capital Markets with contracts you develop on your own), you will need Ve. This rapid contracting system exists already in the Veritaseum platform. See this contract that allows the purchase of Qualcomm equity exposure through the sale of Intel equity exposure, created by the filling in of a simple form.
With the assistance of the ICO, we can create more sophisticated forms with more flexibility, direct exposure to APIs, and pre-fabricated software pools of exposures to those seeking such through smart contract forms such as these. Also of importance, we can decentralize (or potentially fully distribute) the server, making the entire system more robust, and near anti-fragile.
Also, no disrespect intended, but what happens to Veritaseum and Veritas if you were (to be blunt), drop dead tomorrow? If any of bitcoins developers died, it would have zero effect on the price or utility of bitcoin. Veritas might as well be called Reggie Coin and it's pretty obvious what would happen to Reggie Coin in that scenario.
Veritaseum is not Reggie Middleton. It's my brainchild and I'm the (current, until we can get a better) spokesperson, but the skillset to develop such a platform has been over my head nearly since inception. Just measuring what we have now: patents pending, software engineering, financial engineering and analysis, and significant software development - takes a diverse team. We do need to build our team out significantly, which is one of the primary purposes for the ICO. Part and parcel to that buildout will be the hiring of deep and experienced management that will form a healthy chain of succession should anything happen to any one of us - or even several of us.
In addition, we will open source the token-based asset pools and oversee its development with the community. We have no desire to control this. As you may recall from the introductory video, our goal is to significantly and dramatically democratize the finance and investment space. That means access for everyone and anyone, anywhere. Think of how dramatic the change in the media business was with the introduction of the Internet and blogs. Now, everyone and anyone could potentially create content that could nearly instantaneously reach an audience of millions around the world, in a matter of minutes. Did this destroy the media business? No! It expanded it and forced it into the next century, the next paradigm. We're looking to do the exact same thing to Wall Street!
I hope you'll post some material explaining the use case and the value proposition of Veritas. Thanks.
See the graphic below to see the doors that Verias (Ve) is to serve as the key to open.
The Veritas deal sheet is now available for download, which packs all the information about Veirtas in a signle page. A step by step guide to purchasing Veritas can be downloaded here.
If you haven't heard, we're giving out free, fully smart contracts as a 5% rebate to anyone who purchases any of our research packages above the introductory novice $50 level. This is not your Daddy's rebate! The rebate actually gets larger as DB goes down in price. For those who may be coming late to the party, we can offer a 5x long gold (or even a long gold, short DB) smart contract rebate as well. Of course, the bulk of our research targets banks and entities other than DB, but I thought we'd make DB the subject of the rebate to drive the point home. Below is an actual contract crafted off of the price of a single share of DB for about 2 weeks.
Click here to explore and subscribe to our research. You will have to be willing to fully identify yourself and comply to the terms or our program (in essence, promise not to use the package for anything other than our rebate) in order to qualify for the rebate. Once the subsciption is paid for, email us to get started.
Deutsche Bank is going to need some money, and it's going to need some quite soon. The next two or three articles that I write will focus on why there is such a need. In a concerted effort to reduce or potentially eliminated the risk of taxpayer-funded bail-outs of European banks, the EU implemented a new “bail-in” regime beginning on January 1, 2016. As such, rules which require banks and certain systemically significant market participants in EU member states will have to write-down, cancel, convert into equity or otherwise modify certain unsecured liabilities if such steps are required to recapitalize the institution. What is the most bountiful unsecured liabilities of a bank? Read more...
Our next article will continue to hammer home the liklhood that DB will have to recapitalize, and where they probably WONT'T be getting the money from, as well as the likelihood it will come from someone who really didn't plan on giving it up (Ahem, depositors/savers/checking account holders). For those who are not yet convinced, peruse these related items...
The research and knowledge subscription module "European Bank Contagion Assessment, Forensic Analysis & Valuation" contains a full report of a very large European Deutsche Bank counterparty that faces a full 27% downside from current levels. It appears as if no one suspects a clue. It also contains much, much more (including at least 3 to 5 suspect banks). We can break this apart a la carte, if requested.