In the most recent episode of More Than Money, CoinGeek’s Patrick Thompson talked to Antonino Sardegno about venture capitalism in blockchain, what needs to take place for more investors and enterprises to have confidence in blockchain companies, and what engineers can do to make the lives of market participants easier.
Who is Antonino Sardegno?
Sardegno is the Managing Partner and Founder of Hummingbird Capital Partners. He tells Thompson that the firm helps family offices and entrepreneurial investors eliminate the administrative hassle associated with proprietary investment strategies.
How do they do that? They have institutional-grade investment funds, and because they invest their own money, they know the pain points associated with executing an idea. They offer access to their platform and deal with other parties on the back end, ensuring it’s regulated, legal, and hassle-free.
Why spend time and energy learning what’s happening in the blockchain and digital assets space?
Thompson asks Sardegno why he and his company are interested in the industry. He gives a three-pronged answer.
First, it attracts eager, young, and amazing minds. Second, the software in itself is intellectually fascinating. Finally, real problems are being solved.
Do you lean more toward the consumer or enterprise side of the industry?
Noting that the industry tends to fall into two camps; customer-facing or enterprise, Thompson asks Sardegno which one he focuses on.
He answers that enterprise is the primary focus. He believes blockchain technology will have a huge impact and create many positive outcomes for many people. A lot of creativity will be unlocked, and new business models will be built, he tells us. As for adoption, he says it’s a matter of when and not if.
Thompson agrees, but he’s also optimistic about consumer-facing apps. He notes how everyday people can dive in and play around easily while enterprises have to be more careful. He asks what sort of things need to be solved before enterprises decide to implement blockchain technology.
For Sardegno, having everything working within legal requirements is crucial. He notes that all corporations need audits, and blockchain can help with that. He believes that it is an extremely useful tool for any company that requires “moments of truth” to be recorded.
What are some ‘green flags’ when assessing companies for investment?
Focusing on investments for a minute, Thompson wants to know what Sardegno and the team at Hummingbird Capital Partners look for when assessing a company.
Sardegno emphasizes that they are not interested in companies making money from arbitrage. Instead, they focus on businesses solving real-world problems. He gives the example of Tokenized. For him, any company that utilizes the low-cost money transfers of the blockchain and creates business solutions around them is an excellent potential candidate.
Is there one sector in particular that can benefit from blockchain solutions?
Thompson is well aware that the implications of blockchain technology are far-reaching. However, he wants to know if there’s one in particular that Sardegno feels will be positively impacted by it.
Sardegno answers that there are so many it’s “basically universally applicable.” There are limitless applications and capabilities, and we’re only bound by human creativity. Creativity, for him, makes us all brothers and sisters.
Are there any valuation metrics that you and your team look at in particular?
Thompson highlights the difficulty many investors face with how to value companies in the blockchain space. The ways to measure value in equities and other traditional companies often don’t apply in this industry. He wonders how Sardegno and his team do it.
He answers that, aside from the usual stuff, they look at tokenomics and network effects. He expounds on how we don’t have a good feel for exponential growth and how it creeps up on us quickly. He believes that’s the sort of shift this industry will experience. The current rate of growth and the potential for exponential growth is one thing they look at.
Why now? Why weren’t they immersed in the ecosystem previously?
Thompson asks why Hummingbird Capital Partners only got into blockchain relatively recently.
“Because I’m not as fast a learner as you are,” Sardegno answers. “It takes time to digest.”
Aside from the learning curve, he highlights how they have a strong fiduciary responsibility to the people they are dealing with. This leads them to be risk averse until they reach a degree of minimal understanding.
Sardegno emphasizes that knowledge transfer is absolutely crucial and that we have yet to understand the impact this technology could have.
What can blockchain engineers do to make others’ lives easier?
Thompson asks if there is anything blockchain engineers can do to make life easier for those who want to learn more.
Sardegno says to make the message easier to digest and encourages industry veterans to try to reach the youth. He says to remember his young sons are on the other side of the screen, and they’ll be the ones building in the future. As well as this, he encourages engineers to make as many real-world examples as possible. He mentions how tangible examples helped him understand the technology and how it works, so engineers should make prototypes to help people understand.
Thompson picks up on the point about age, asking whether a particular age group is tuned into what’s going on. Sardegno thinks early teenagers are probably the most aware demographic because that’s when you have an unbiased imagination. He notes that wonderful things can happen when you combine the power of imagination with a tool like a blockchain.
Do you have a general takeaway for the audience?
Thompson usually asks his guests for a final takeaway, something they’d like the audience to remember. He asks Sardegno for his final thoughts.
“Value will be king,” he says. He uses an analogy that reads that the shoes you wear won’t matter, but the steps you take will.
- There’s still an education gap in the blockchain and digital asset world. This holds back the pace of innovation.
- When accounting firms audit more blockchain companies, investors will have a better idea of how to value them.
- If engineers create more prototypes for their complex ideas, they’re likely to be more successful, and every market participant will benefit.
Watch: The BSV Global Blockchain Convention panel, Tokenizing Assets & Securities on Blockchain
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