Dacxi Team

Music courtesy of BlackIrisFilms.com

Andy Pickering – Host

Welcome to Unleashed with the Dacxi Chain, a Dacxi podcast where we learn all about the Dacxi Chain and the incredible opportunities it unlocks. This is episode three in our special three-part series, acknowledging and celebrating the launch of the very first stage of the Dacxi Chain. I am, of course, joined again by Dacxi Chain CEO Mr. Ian Lowe. In this episode, we’re going to dig deep into the Dacxi Chain roadmap and explore again the vision of the Dacxi Chain and the future of equity crowdfunding. Welcome back, Ian. 

Ian Lowe – Guest

Thanks, Andy. Good to be talking to you. 

Andy Pickering – Host

So as I say, today we’re going to talk about the roadmap of the Dacxi Chain. But before we do that, just recap again for us, how is the innovative approach of Dacxi Chain about to shape the future of equity crowdfunding? 

Ian Lowe – Guest

Yeah, I’d be happy to. So look, in a nutshell, equity crowdfunding today represents less than 1% of the capital that finds its way into growth companies. We think that’s a huge missed opportunity. And realizing the opportunity for equity crowdfunding is about offering it a future built around scale and enabling that scale so that different platforms essentially can tap into each other’s crowds. And equally, those platforms can enrich their catalog and investment opportunities so that they can build, attract, and build a larger crowd on their own platform. So the Dacxi Chain technology is a set of tools, a set of pipes if you like, that allows those licensed, established, reputable, existing crowdfunding platforms to connect directly with each other. 

And we do that under a decentralized model where we’re not a competing destination for investors to come, nor are we competing in any way, shape, or form with the partners using the network in trying to find growth companies looking for growth capital. And so that is the proposition. That Dacxi Chain proposition, we think with a few cycles of growth behind it as we sign more platforms, redraws the lines of the innovation economy by offering equity crowdfunding a much bigger seat at the table and more specifically, individual investors, more and more access to great investment opportunities and for companies looking for growth capital. Access to more capital, faster capital, and over time, potentially even cheaper capital. 

Andy Pickering – Host

Yes, indeed. All right, I said we’d talk about the product roadmap, Ian, so how should we frame this? Tell us what you can about the Dacxi Chain’s strategic blueprint for the future of equity crowdfunding and what that looks like in terms of where we are on the roadmap at the moment and of course where we hope to get to in the future. Lay it out. 

Ian Lowe – Guest

So look, the core proposition is about saying we’ve gone out and researched the market, we’ve built some requirements, we’ve gone and developed a launch platform and we’ve signed and integrated some foundation partners and then the first deal will flow through those pipes. We expect that first deal to be successful and at the end of that first deal we’re really going to refocus on two core streams of work. The first is spreading the good news so we can go out and share the details of what we’ve built, how it works, the benefits associated with that, and all of the insights from that first deal with other partners and starting to build the network. 

Because it is that network effect and the compound growth in deal flow that we get from that network effect that will ultimately realize the vision of providing real scale through this technology to the equity crowdfunding industry. So that stream of work really kicks off in earnest at that point. In combination with that, there’s a whole range of new product features that we want to bring into the technology itself. And so these are features that are focused on providing additional value to the two primary beneficiaries, being the issuer that is the company raising capital, and the investor that’s actually putting the money into that business in exchange for equity. And so there’s a range of ways in which we think we can bring incremental value to the table of both of those parties. 

The first as it relates to the issuer, is to realize that ultimately their interests are represented by the platform that they partner with to help them raise the capital. And so for those platforms, we are looking to bring insights around deal flow and a whole bunch of different metrics that we can look at across the entire network, not just within individual platforms themselves, and help them learn from those insights as to how they can more successfully attract companies in the first place to look at equity crowdfunding as their chosen source of capital for growth, and equally, how they can help those growth companies market their business in order to close a successful capital raising round through the crowd. So they’re the benefits on the issuer side of the transaction. 

But then on the investor side, as we start to enrich the catalog of investment opportunities for those investors, we believe there are some really great tools that we can bring into the experience they’re having with each of those local crowdfunding platforms. 

So remember, those investors do not come to Dacxi Chain, they access these opportunities through their local licensed crowdfunding platform, the platform that they might already be using for example. But there are some tools that we can offer those crowdfunding partners of ours which in turn they can expose to individual investors on their own platforms, which we think will help build the confidence of those investors around what is the right opportunity for them to say how do I best understand that opportunity? And what does the path to harvest, including potential time frames, start to look like? 

And of course, when we talk about harvests being a blockchain enabled infrastructure, it means that we can offer individual investors that path to a harvest event, the time frame of which is their own choosing. Because through a tokenized shareholding, they can access secondary markets and they can liquidate some or all of those shares in the time frame that they choose. 

Andy Pickering – Host

Yes, indeed. Okay. Well, thank you, Ian. As we come to the end of this special three-part episode series, we’ve had the Dacxi launch event, which is on YouTube, so we do suggest that you watch that if you have not already. If you have, you’re probably already very excited for what comes next. But just before we tease people with some anticipation in terms of what comes next, Ian, do you have any final thoughts or advice for people that are interested in getting involved and understanding where the trajectory of equity crowdfunding is going? Where do you think this is all heading, Ian? 

Ian Lowe – Guest

Look, a number of the people that are listening to this discussion would already be participating in equity crowdfunding or have at some point in the past, but there’s a bunch of people that also won’t have. And so what we would say to them is, look, equity crowdfunding is growing with or without Dacxi Chain, okay? It’s going through a cycle of growth. 2023 is a particularly challenging market for securing capital for any company, public or private. So 2023 we might see a flattening of the previous years, but beyond that, we can already start to see signs that the growth trajectory will continue as it has over the last couple of years. So equity crowdfunding is growing. 

But really what we’re talking about here is exponential growth over the next three or four market cycles, let’s call it, over the next three to five years, where we give equity crowdfunding, through this network effect, a seat at the table well beyond the less than 1% that it currently represents of the innovation economy. So what that really does is it shifts the balance of power away from the few that control so much of that growth capital in the form of venture capitalists and the like. And it swings that pendulum back to empower or democratize investing for the individual investor and the power and the strength of the crowd. We think that’s enormously important in terms of that imbalance that we see today, and we see a significant number of benefits. 

So to answer your question, I would encourage people to take a closer look and register on a local crowdfunding platform. We’ll be talking about who our partners are and how they can register on those platforms in great detail. So we’ll be helping people get involved, but we would encourage people to get involved, register, take a closer look, start to understand what investment opportunities actually are available to you. It’s a lot broader, it’s a lot more diverse, and a lot more exciting than a lot of people realize. And to find the right opportunity is the entry point. Find that right opportunity that you either understand or resonates for some reason with you as the entry point. And as always, with any kind of wealth building, take a medium to long-term view. That’s absolutely critical. So diversify and take that medium to long-term view. 

And the first step really needs to be something that you understand or appeals to you in some particular way. That’s the ideal way to start the journey as it relates to investing in high-growth private companies. 

Andy Pickering – Host

Yeah. Great thoughts, Ian. And look, I very much agree. I think it’s such a great point. If you can find something that is personally interesting to you and something you believe in, it just makes your conviction in whatever investment that might be much stronger. And it means that you can have the conviction to have that long-term view. And if you have a belief or a passion or an interest in whatever that particular sector or field may be, it just makes the investing ride that much more fulfilling. Great words, Ian. Thank you so much. To finish off this three-part series, anything you can tease us with in terms of that first announcement, we know it’s coming soon. 

Ian Lowe – Guest

Oh, look, it’s coming very soon. It’s only a matter of days and weeks until all of the detail will be revealed. But I also just want people to know that we’re going to step them through it, so we’re going to make it very clear how they can get involved if that’s something that they’d like to do. We’ll be sharing more detail about the specifics of that deal, and the time frame in which we expect that deal will open and then close, so all of that will be shared. There’ll be quite a bit of detail that will be forthcoming. So we’re obviously really excited about being able to do that. 

Andy Pickering – Host

Absolutely. You heard it here first, folks. So all you can do is keep it locked to the various Dacxi Chain communication channels. That brings us to the end of our special three-part series, acknowledging the launch of the first phase of the Dacxi Chain. Thanks for being here, Ian, and I’m sure we’ll see you very soon. Cheers. 

Ian Lowe – Guest

Thanks, Andy. Good to talk to you.

Music courtesy of BlackIrisFilms.com

Andy Pickering – Host

Hey folks, welcome to episode two in our three-part special series of podcasts that celebrate the launch of the Dacxi Chain. In this episode, we’re going to talk more about the power of the Dacxi Chain, and what the network effect is that is going to help drive the growth of the Dacxi Chain network all around the world. We’ll understand some of Dacxi Chain’s advantages that come from its decentralized crowdfunding model. To learn about all of this, we are joined again by Dacxi Chain CEO Ian Lowe. Hello again, Ian. 

Ian Lowe – Guest

Hi, Andy, glad to be here.

Andy Pickering – Host

Let’s dive right into it. I mentioned the decentralized model of the Dacxi Chain, Ian, so can you explain what that means, and what are the advantages that this decentralized model brings to the Dacxi Chain? 

Ian Lowe – Guest

Thanks, Andy. So to set up the answer to your question, let me just explain briefly what Dacxi Chain is. So, Dacxi Chain is a platform as a service, essentially an underlying set of pipes and capabilities that allow equity crowdfunding platforms anywhere in the world, as long as they’re licensed, to connect to each other. And the reason they would do that is so that for an opportunity on one platform where that would normally only be invested in by their own local crowd on the same platform, that investment opportunity can be shared by that platform with a vast number of other platforms, all of whom have crowds of investors looking for great investment opportunities. 

Okay, so it’s essentially a network model whereby any existing, established, credible, and licensed equity crowdfunding platform can get access to the network through a set of APIs that we provide. And through those APIs, they can connect with other platforms and essentially do two things: share deals that they’re offering to investors to a significantly larger pool of individual investors rather than just their own crowd. And secondly, they can offer the investors on their own platform a much larger catalog of investment opportunities that have started or have originated from other platforms in the network. So this addresses this whole chicken and egg constraint, which is about getting scale into equity crowdfunding by scaling not just the pool of investors through this Dacxi Chain network, but also the catalog of investment opportunities. And of course, the richer the catalog, the more attractive it is to investors. 

So that network effect that you’ve referenced, where we get this compound growth through signing more platforms into Dacxi Chain, connecting them through our APIs, we grow the pool of investors, we grow the catalog of investment opportunities. Really, that compound growth, we believe will reimagine the scale of what’s possible for equity crowdfunding with some really clear benefits that touch the three principal beneficiaries, which are the investor looking to invest, the company that’s actually raising the capital so they can grow, and the platform that sits in the middle to connect those two groups together. 

Andy Pickering – Host

Thanks, Ian. So this network effect that we’re talking about, I think you and I have talked about this before on previous podcasts, Ian. It’s a famous law, it’s called Metcalfe’s law, which very simply says that the financial value or impact of a network, a communications network, an electronic network, a blockchain network, the value of that network is proportional to the square of the number of connected users on the network. This is really just a fancy way of saying the larger the network, the more potential value. I’m sure that can make sense to people. So you’ve talked about going from local to international and being able to unlock the scale and potential of the Dacxi Chain opportunity. So, again, just in simple terms, explain how that works in terms of the decentralized network model? 

Ian Lowe – Guest

Absolutely. So one of the things you’ve already referenced is that we are operating under what we call a decentralized network model. So let me explain what that means because it’s quite significant. So essentially to provide this network opportunity for independent platforms to plug into, to access scale on both supply and demand, there are two basic ways we can do it. There are actually three or four, but let’s just stick with two for now. One is a centralized model. One is a decentralized model. So I’ll explain what the decentralized model is by starting with an explanation on the centralized model. So a centralized model is where somebody comes in and says equity crowdfunding lacks scale. That’s a big constraint. That constraint is felt by everybody. Investors on one side, growth companies on the other. 

Let’s solve that problem by creating a network and let’s make that network a centralized network. And what that means is that you’ve got one central party that controls that network. You’ve got one central party that is essentially aggregating the investors and aggregating the deals. They probably need to become a licensed crowdfunding platform themselves. They would need to do that in every market of operation. That would cast doubt over the ownership of the crowd for each of those platforms. It would cast doubt over the control and ownership of the deals for each of those platforms. And a centralized model would essentially create unhealthy competition between the network operator under that centralized model and the constituent partners that are plugged into that network, whereby the centralized player is saying, come to me to see the deals, come to me to invest. 

And they are actively marketing a different destination to the destinations that already exist in the forms of the participating platforms. So a centralized model, just like bookings.com or expedia.com and all of these different industries where we’ve got a centralized model, if not immediately, shortly after that, is actually in direct opposition of the partners that create that catalog and aggregate those investors. 

So if we look at a centralized model, we think that’s deeply flawed. Equally, I think over the next ten years, players will emerge who are already in equity crowdfunding, who will pursue a centralized model. And they’ll do it by trying to expand into lots of different countries, acquire and operate lots of different crowdfunding licenses, acquire and look to build lots of different standalone crowds, and then start to find ways to connect those crowds. 

But in the end, it will still be a centralized model. 

The decentralized model is a model that says we do not want to compete, the network should never compete with the partners that create the network. In fact, far from that, the decentralized model says, at its very core, our job is to make all of our partners spectacularly successful, because if they are successful, we are successful. So this very tight alignment of interest is what we achieve under the decentralized model. And the way we do that is the following. When a deal is exposed on a platform in the network, and it’s therefore, by definition, exposed to that platform’s own crowd, by releasing that deal into the Dacxi Chain network, that deal is now surfaced inside the platforms of all the other participating equity crowdfunding players. 

So essentially what that means is that if I sit in another investor pool inside another platform that’s connected to the network, then I can see the investment opportunities that originate from other destinations, from other platforms in the network. I can see it inside my local platform. So what we’re essentially doing is we’re building the connective tissue between all of these platforms that allows them to share deals with each other. And then when investors on their local platform participate by investing in a deal that they didn’t own from the very beginning, those investors can participate in a much richer catalog of investment opportunities. But we don’t aggregate that in a centralized model. We actually distribute all of those deals into the platforms that people are already using. 

So it’s a very important distinction that has very real implications for the potential for Dacxi Chain to redraw the lines of what’s possible for equity crowdfunding. 

Andy Pickering – Host

Got it. Thank you, Ian. Another fascinating part of the potential of the Dacxi Chain, and the potential of equity crowdfunding is the ability for investors to drive impact through positive social and economic change around the world. So I’d love to get some big-picture thoughts on how you think the Dacxi Chain can help participate in driving this global positive social and economic impact? 

Ian Lowe – Guest

Yeah, of course, one of the things we talk about a lot is the potential to democratize investing for everyday investors. So this is not just retail investors, though it includes retail investors, and individual everyday investors who want the opportunity to participate. They’re not going to invest in everything. They don’t have huge capacity, which of course makes crowdfunding perfect for them because they’re not like an institutional investor that is placing very large bets. They’re placing much smaller investments probably in a small portfolio of businesses they feel that they understand. And so really to this point in time, the only path to providing those investment opportunities to everyday investors is equity crowdfunding. But of course, it lacks the scale that drives participation. 

And what we mean by that is providing a much richer catalog of investment opportunities where somebody that comes to that catalog will have an affinity with one or more of those investment opportunities based on their own life experience, their professional experience, all sorts of different things that are unique to them as an individual. So we need scale in both the catalog of opportunities and the pool of investors to really drive that synergy between supply and demand at scale. And so Dacxi Chain is really about providing that scale, providing the technology infrastructure to enable that scale. 

And that scale by definition is this democratization of investing by giving everyday investors access to a larger pool of investment opportunities, many of which would typically only be offered to the chosen few that sit around the high net worth table where they get an inside run on the best opportunities. We believe that scaling equity crowdfunding will actually completely reimagine what’s possible and in the process, democratize investing in private companies, high-growth private companies for everyday investors. 

Andy Pickering – Host

Fantastic. All right, let’s start to wrap up this episode. We’ve talked about the decentralized model of the Dacxi Chain ecosystem, we’ve talked about the network effect that will help supercharge the number of participants in the ecosystem. We’ve talked about the potential for the Dacxi Chain to drive positive social and economic impact. If you put all of this together, it starts to sound like a paradigm shift. Let’s close out this episode by explaining how we think the launch of the Dacxi Chain is a paradigm shift when it comes to equity crowdfunding?

Ian Lowe – Guest

Certainly. Today, less than 1% of the funding that finds its way into growth businesses comes out of equity crowdfunding. Now, that just has to change. And the only way it changes is through scale. And we’ve talked about this idea of empowering individuals with the opportunity to participate and to do that at scale. But think about the implications on the other side of these investment opportunities. We’re talking about founders, high-growth companies in the early stages of their life. They’ve got a proven product or a service or an offering. But to scale that business, they need access to money. They need growth capital, and they’re willing to give away some of the business to achieve that, to realize their dream. 

And so on that side of all of these transactions, that’s what we talk about when we talk about the innovation economy. This is the way that capital finds its way into businesses with great ideas and great solutions that need capital to realize the benefit of those great ideas. And, of course, that benefit can now flow to everyday investors. So at scale, equity crowdfunding truly is a win where we’re not just providing access, we’re actually giving innovators access to capital. And we’re doing it in a way that gives them access to more capital, gives them access to capital faster. And we think over time, it will also start to give them access to capital at a more competitive price because of the scale. 

And so all of those things in combination are not hard to project as we start to sign more platforms and build this network and see the effect of that network and its growth. 

Andy Pickering – Host

Really good stuff Ian, it really is about supercharging the ability for people to innovate and get funding for those innovative ideas. It’s a really exciting time, I think. That brings us nicely to the end of episode two in our three part special series celebrating the launch of the Dacxi Chain. In our third episode, we will look at the Dacxi Chain roadmap and beyond. What is the future of equity crowdfunding? It’ll be very exciting. Please join us for episode three. But that is the end of episode two. Thank you again, Ian. 

Ian Lowe – Guest

Thanks, Andy. 

Music courtesy of BlackIrisFilms.com

Andy Pickering – Host

Hey folks, welcome to episode one of our special three-part series that delves deep into the revolutionary world of Dacxi Chain, which, as you know, is an advanced crowdfunding solution led by a very dynamic CEO, Ian Lowe. Ian is overseeing the imminent launch of the Dacxi Chain. In this three-part series, we’re going to learn more detail about all things Dacxi Chain. In this, the first of these three special episodes, we’ll lay out the context of what Dacxi Chain is trying to achieve in this evolution of global equity crowdfunding, and we’ll learn about the genesis of Dacxi Chain, and Ian’s vision as CEO. Welcome to the show, Ian. 

Ian Lowe – Guest

Great to be with you, Andy. Excited to be talking about where we’re going. 

Andy Pickering – Host

I’m excited as well, Ian. So I think we better just dive right into it. Let’s hear about your personal journey, Ian. Please share a little bit about your background and what led you to join the Dacxi Chain team and take up the leadership position of CEO. 

Ian Lowe – Guest

I’ve spent the better part of 30 years founding, co-founding, running, and growing technology businesses. So principally, software businesses, but software businesses that operate in a range of different industries, including media and digital media. Finance, sustainability. And the common thread in all of those businesses is really first of all, as a growth enabler. So I naturally gravitate to high-growth business opportunities and take a very hands-on approach to being a catalyst for realizing that growth and getting businesses on a high-growth trajectory. But also, along the way, I’ve been lucky enough to innovate in different industries, both as a cofounder and also a founder and also being brought in as a professional leader or a CEO into existing businesses. So it’s really about technology. 

It’s about high growth. And for me, it’s very much about innovation. The opportunity to innovate is something that appeals to me greatly on a personal level. The opportunity to reimagine an industry. These are all things that I find really attractive in a professional context. 

Andy Pickering – Host

Thank you, Ian. Let’s set some context in terms of what are the main challenges that exist within the current equity crowdfunding framework? And how do these limit its potential? 

Ian Lowe – Guest

I’d be happy to talk about that. It may not surprise you that we’ve spent a really significant amount of time going into that and really understanding it. So, look, there are a couple of headline constraints for the equity crowdfunding industry, if you like, today. And so when I talk about the industry, I’m talking about equity crowdfunding globally. And I should also, just for the sake of context, make it clear that we’re talking about equity crowdfunding. So crowdfunding does exist in other flavors. There’s community crowdfunding and debt funding and things of this nature that still tap into the resources of a crowd. But what we’re talking about here specifically is probably the most prominent of all of those, which is equity crowdfunding. 

That is many investors investing typically small amounts per investor to take equity or shares in a privately held growth business. So a business looking for growth, it needs capital to realize that growth, and a crowd of investors who will invest in return for equity or shares in that business to empower it to grow. 

So if we look at the global equity crowdfunding industry today, the first thing that I think is really important to note is that depending on the numbers that you reference, but they all generally agree that today is about a 1 to 2,000,000,000 US dollar industry per annum. Okay? Now that sounds like a big number. 

But when we compare it to the amount of growth capital being invested by VCs or venture capitalists, it’s much less capital than what is being invested by VCs. So in other words, the seat that equity crowdfunding has at the table of, you know, funding the innovation economy, which is ultimately what this capital is doing, is a very insignificant one, and it plays in the broader scheme of things a reasonably insignificant role. Now clearly, the businesses that raise capital successfully through equity crowdfunding would take a different view, and that really speaks to the potential of equity crowdfunding. But at the moment, it’s less than 1% of the innovation economy. Now why is that? 

You know, 10 years ago, I think there were a lot of businesses that were created, some of which still exist today. Equity crowdfunding platforms that said, this is the new frontier of the innovation economy. This is the new path to capital for growth companies. But as we sit here today, whilst growing from nothing and continuing to grow incrementally, its participation in the overall scheme of things is really modest. And so there are really a host of underlying issues that speak to why. But there are two headline issues. The two headline issues are the following. The first is that equity crowdfunding today is almost by definition a local market proposition. 

So what we mean by that is you’ve got a platform that’s gone out and acquired a license to operate, because Dacxi Chain, we can only operate in a licensed context, and in almost all regulated markets, you must have a license to operate an equity crowdfunding platform. So they go to the trouble of getting that license, and then they set about doing two things in parallel. The first is to go and speak to lots of early-stage companies to understand how they can service their requirements around access to growth capital. Companies that need money, they’re constantly out there talking to those companies trying to attract them to their platform, to build a catalog of investment opportunities. And then on the other side of that same platform, they’re looking for investors. This is the crowd. 

They’re looking for individual investors to come in, register on the platform, open an account, and start to participate by investing in some of the catalog of opportunities that they’re bringing to that crowd. So that ecosystem or marketplace is a silo that operates almost exclusively within a single market. And if you think about it, that actually makes very good sense. I mean, how is an equity crowdfunding platform that sits in a particular country, logically going to convince companies that don’t exist in that country or their executive team is not based in that country, that they need to use a platform in a different country of their own to actually go and raise capital? It’s very problematic. And, of course, that’s why it just doesn’t happen. 

And then similarly, when it comes to building the crowd, building an international crowd is theoretically possible, but the reality is that it requires significant capital, significant effort, and real marketing skill to successfully build a crowd of active investors. And so inevitably, what that means is that the local equity crowdfunding platform is also sourcing its crowd locally. Because doing that across multiple markets being based in a different market is, again, highly problematic. So what you end up with if we sort of draw the lines of the equity crowdfunding industry is a lot of disconnected independently run local crowdfunding platforms. Now at face value, that may not sound like a problem. But it’s actually a really big problem. And in many respects, we believe it’s the most fundamental problem. 

And it’s the reason why equity crowdfunding today is less than 1% of the innovation economy, and that is the following. If I wanna invest in a business that I think has good prospects, I will do it based on a basic understanding or better. In other words, maybe not just a basic understanding, but some previous experience or knowledge that I bring, I will do it on the basis of that knowledge. In other words, for a business that might be selling some highly specialized medical device, the average investor is going to struggle to get to a point where they feel like they truly understand the problem, the solution, and the opportunity that solution creates. 

And so what we need on the investor side is, we need real scale to get to a point where more and more individual investors have enough confidence that they understand the investment opportunity because they understand the underlying business to then participate in the crowdfunding. And so where you’ve got a local construct with local issuers or local companies, growth companies, only raising money from local investors, that scale is very difficult to achieve. So scale on the crowd side of the equation is a fundamental barrier to equity crowdfunding realizing its true potential. 

So that’s on that side of things. But then, of course, there’s also this chicken-and-egg dynamic whereby the richer the catalog of investment opportunities, the more attractive it becomes to the investor. 

So on the supply side of that same equity crowdfunding platform, you’ve got deals that are only sourced locally, which means there’s only a certain number of those that are viable for equity crowdfunding. And so of course, that constraint means that it’s much harder to get the crowd to participate and to recruit them in the first place. So you’ve got this chicken and egg dynamic all of which wrapped up means that there’s a lack of scale in equity crowdfunding today. But if that can be resolved, if we can offer equity crowdfunding at genuine scale, the opportunity to become truly global, we think that completely reimagines what’s possible for equity crowdfunding. So that’s a very long-winded point 1 to a 2-point answer to your question. 

The second constraint is really around liquidity for the investor. So at the moment, if I want to invest in a privately held company, the one thing that I understand when I invest is that I don’t know when I’m actually going to get a return on that investment. I just have no idea. I don’t know what the time frame is. I don’t know what the harvest is going to look like. Now some professional investors would suggest that is the romance of investing. But, of course, for the average everyday investor, that creates friction in the process, and it erodes their confidence. Because they can’t see a clear path to a harvest. And so what we’ve always believed is in the innovation of blockchain which is borderless and allows any kind of tokenized asset to be traded on secondary markets freely and easily. Blockchain completely removes that constraint. 

So we get to a point where we’re saying, the two biggest problems are lack of scale because it’s a local siloed proposition. And secondly, a lack of liquidity for the individual investor. The solutions to this are – let’s make equity crowdfunding global so it has the scale it needs both on the investor side and on the supply side. And secondly, let’s tokenize that equity so that the investors that hold that equity have a clearer path to a harvest at a time frame of their own choosing. And so that puts them in a position of far greater control. So, look, that’s a very long answer, but, hopefully, that speaks to the heart of the constraints that the industry faces today. 

Andy Pickering – Host

Yes indeed. It does, thank you, Ian. So if that’s the case then, we’ve heard your views on the main challenges that are holding back the current existing equity crowdfunding model and a little bit of detail on how the Dacxi Chain will start to address that. I said at the beginning, Ian, that we’d also learn about the genesis of the Dacxi Chain. So in this first launch episode, we should include a little bit from your perspective on the origin story of Dacxi Chain from its genesis to where it is today. Please tell us the story. 

Ian Lowe – Guest

About six years ago, the world’s first tokenization conference was held in New York. And that conference really was the creation of the idea that became the vision of Dacxi Chain. This idea that tokenization will over a period of time change the way that we think about acquiring, holding, and disposing of assets. And tokenization is, like the Internet was just before it became ubiquitous, we’re very much at that same point in time as it relates to the tokenization of assets. And the tokenization of equity and privately held businesses would revolutionize the opportunity for investors to participate in the capital that must be raised by those companies. 

So it was six years ago that the seed was planted. And from that very first insight, there’s been a number of iterations to the development of the Dacxi Chain vision and mission, and more recently, the business model itself. And I think there was also an appreciation along the way that it was too early 6 or 5 years ago or even 4 years ago in the life cycle of tokenization. 

It was too early to feel confident that we could go to market with a solution and be that far ahead of the adoption curve. At some point, you really do need to synchronize the plans you have for your own growth with a broader understanding and acceptance of the underlying blockchain technology generally. And so we’re now at that point where, you know, a lot of people hold crypto. 

A lot of people understand that blockchain is relevant to asset classes way beyond just crypto and that digital finance, digital is the path that we are on, and nothing that Dacxi Chain does can change that. But our opportunity is to participate by leveraging that change. And so the time frame that we set ourselves really was to say, look, 2023 looks like it’s going to be the right time for us to launch this solution. 

And what that gave us was in some respects, the luxury of time to really do our homework on the state of the industry, talk to some of the established equity crowdfunding players to understand their challenges and opportunities, take a really close look at how the technology on those platforms operates, really delve into the regulatory frameworks in different parts of the world because there are common elements across all of the regulated markets when it comes to equity crowdfunding, but there are also unique elements in each market. So understanding that landscape was really important. And then, of course, going out and building a really detailed understanding of the requirements that we needed to satisfy building the technology, engaging with foundation partners, and getting in a position to launch. 

So that’s a quick version of what has been a long history with plenty of twists and turns. But what I can say is we sit here today with a level of understanding about our solution, the problem it solves, the technology that underpins that solution, and what the future of equity crowdfunding really needs to look like, a level of understanding that we just simply didn’t have even two years ago. So that puts us in a good position and gives us a lot more confidence. 

Andy Pickering – Host

Got it. Thank you, Ian, that was a great summary of the Dacxi Chain journey. So as we finish off this episode, what can you tell us in terms of dates that people should be aware of, just give us a sense of some of the next steps in the arrival and launch of the Dacxi Chain. 

Ian Lowe – Guest

We’ve got some enormously exciting milestones coming up in the very near future. So we’ve already confirmed June 28, which is the launch event. We’re also going to announce as part of that the time frame or the specific date on which we’ll announce the first deal. So the first deal has been earmarked, and all of the detail around that has been worked through. So we’ll be in a position at launch to announce the date on which we will tell everybody about the first deal. Shortly after that, the first deal will open. It will close in a handful of weeks later. And at that point, you know, we really will be in a very exciting position because we have every expectation that it will be a very successful first deal. 

And really at that point, what we’ve achieved is we’ve validated the technology. We validated it in partnership with market-leading, fully licensed equity crowdfunding platforms that have a run rate and an excellent reputation. The investment funds will have flowed between multiple parties through the Dacxi Pipes. And the issuer will have received the growth capital they’re looking for at the end of that first deal. And just as importantly, the investors that participate will have received their equity. So all of that’s really important and, of course, wrapped up in that is we will have clear unambiguous evidence of the Dacxi Coin use case which is really as a transaction currency in this Dacxi Chain ecosystem. And so at that point, really, we turn to two critical bodies of work. 

The first is expanding the network with more and more equity crowdfunding partners, and we’re going to do that really aggressively. So there’s a big body of work there. I’ll be directly involved in that myself and I’m looking forward to that. And then the second stream is really about iterating the technology to continue to provide more and more features to individual investors and the partners that use that Dacxi Chain technology. 

Andy Pickering – Host

Fantastic! Thank you, Ian. Well, folks, this was just the first of 3 special episodes of the Unleashed with the Dacxi Chain podcast that we’re producing and publishing in support of the launch of the Dacxi Chain, which as you’ve heard from Ian is coming up on June 28. So that’s episode 1. Today, we’ve talked about the problems that have been holding back the real potential of the global equity crowdfunding movement. We’ve learned from Ian all about the Dacxi Chain genesis, the origin story. We’ve heard about his vision as the CEO. For our next episode, we’ll learn more about the power of the Dacxi Chain itself, the network effect that is going to drive the Dacxi Chain forward. That is all coming up in episode 2. See you then.

Music courtesy of BlackIrisFilms.com

Andy Pickering – Host

Hi folks, it is Andy here. Welcome to Unleashed with the Dacxi Chain, a Dacxi podcast where we learn all about the Dacxi Chain and the incredible opportunities it unlocks. Let’s get on with the show.

My guest today is Jori Armbruster. Jori is the co-founder at EthicHub, which aims to disrupt the current financial lending system by creating a fair global crowd-lending system using regenerative finance. Very interesting. Welcome to the show, Jori. 

Jori Armbruster – Guest

Yeah, thank you very much for inviting me. 

Andy Pickering – Host

Pleasure to have you here, Jori, let’s do what we do at the beginning of the show. Could you please introduce yourself? Love to just hear a little bit about who you are and what you’ve been doing in the lead-up to co-founding Ethic Hub. 

Jori Armbruster – Guest

Yeah. So I am half Mexican, half Spanish. Before funding EthicHub, I was running a wholesaler in Spain, and previous to that, I was managing my family’s coffee farm in Mexico. So I know about coffee, I know about the different cultures and situations of these two worlds, and so on. When I decided to start something in 2016, I did an innovation degree, I learned about blockchain technology and I said this will change everything starting with the financial system. So how can I do something with this? And EthicHub is basically connecting Europe with Latin America in the coffee production vertical with small farmers leveraging crypto. And we were one of the very first to do something like that, to use blockchain technology to connect to the real world with a focus on impact. 

Andy Pickering – Host

Yeah, that’s fascinating Jori. So EthicHub is a Regenerative Finance project using blockchain technology to create a more sustainable and equitable economic system. And so tell us a little bit more about how this works. So the way I understand it, you guys at EthicHub, you aim to do this by providing a platform for farmers to sell their produce directly to consumers. Tell us a little bit about how this works and how you’re tying in the wonderful world of web3 and blockchain. 

Jori Armbruster – Guest

Yeah, so on one side you have the decentralized protocol which will become a Dao and is based on the Ethix token run by smart contracts and the lending protocol. 

And this is about both providing working capital to the farmers, but also and most importantly about providing them with collateral so you as an investor can decide which role you prefer to have. The low risk, not that low return option is 8%, for now you lend stable coins or you have the higher risk position which is you buy Ethix, which is our token you stake on behalf of the farmers so they have collateral, so other people lend them money. 

And the coffee side of it is a bit like a byproduct of the equity company behind EthicHub. The business model is to buy and sell coffee. So when we act as an auditor looking for new loan originators, we look for a cooperative of coffee producers which we are interested in selling their coffee so we finance the production, transformation and exportation of that coffee. 

But the idea is that in the lending protocol there will be other auditors with other kinds of products or verticals. We are just starting with Heifer International, which is a huge NGO working in ten countries with hundreds of cooperatives. And some of those cooperatives are not in the coffee vertical, they are in Cacao or whatever. And we are also working on a pilot with another project that will act as an auditor for the solar panel for smallholder farmers vertical. Because there are 1.2 billion smallholder farmers excluded from the traditional financial system, which is almost a quarter of the world population. But you also have a very similar number of people excluded from electricity, because they are far from the grids, the traditional electric grid. So the only way to give them electricity is with solar panels. 

Andy Pickering – Host

Yeah, got it. Thank you, Jori. And so you said you’re working with coffee farmers initially and then that will expand out to other products. Tell us, which countries that the coffee farmers are located in at the moment? 

Jori Armbruster – Guest

So for now we started in Mexico, because for us we are Mexicans. And we also started doing a couple of pilots two years ago in Honduras and Brazil and last year we also started in Colombia, Peru, Equator. For now that’s what we are doing. But most of it still is in Mexico. 

Andy Pickering – Host

Got it. For people who are wanting to look at EthicHub and support your community of farmers and even potentially get a return on their investment by doing so. Can anyone in the world support the farmers through EthicHub? Is it restricted to any countries? 

Jori Armbruster – Guest

It is restricted, at least for retail investors. We don’t accept US investors and Chinese, I think, because of their regulations and it’s super expensive to ask for a regulation over there and they are very strict. But wherever else in the world you can lend and even in the States you can stake, which means buy Ethix and stake on behalf of the farmers because that’s something that still doesn’t have any regulation at all. 

Andy Pickering – Host

And this is really an example of what people call impact investing. Right Jori, so I wonder how you define impact investing? 

Jori Armbruster – Guest

Yeah, I think we have to all move farther than sustainability and think about regeneration and how you measure that is very complicated. But I think the easy way of doing so is with the Sustainable Development Goals which is like a way to have a common language of what are the biggest problems of the world that need to be solved. And if you have a business model that is not like the traditional social responsibility thing, okay, you are a petrol company but then you give some grants so you balance your impact or something like that. But being an impactful company, a regenerative project means your business model has to create positive externalities in some of these Sustainable Development Goals as part of the business model. Not like to balance the bad impact you did before. And we are contributing to eight Sustainable Development Goals one way or another. Most importantly for sure, it reduces the inequalities. 

Andy Pickering – Host

Yeah, absolutely. And it’s so important. Can you talk then a little bit about what kind of impact EthicHub is having on some of these farmers? Like what are they seeing out of the support that they’re getting from people investing in what they’re doing via EthicHub? 

Jori Armbruster – Guest

So this is a bit of the why behind EthicHub, right? Because people don’t know that these more than 1 billion people’s only access to capital is cash loans at 100% interest rates and things like that. So for sure, if you provide them with an alternative source of funding it’s not only that they pay less interest but also they can really ask for a loan because now it’s affordable to invest and improve their productivity. We focus from the beginning in this vertical because here you know that the money is not going to buy a TV, the money is going to invest in their productivity so they can get out of the poverty cycle. Which is precisely that because if you don’t have money, you cannot improve your productivity, you then don’t increase your income so you cannot run out of this busy circle. 

Andy Pickering – Host

Yeah, that’s exactly right. Very well said. And look, we talked about impact investing, which is really just an investment strategy that seeks to generate a return but while also creating a positive social impact or environmental impact. And I think EthicHub is definitely an example of impact investing. But we talked also I talked about in the beginning about regenerative finance. So I wonder if we can just explain that a little bit more because I think that is kind of tied into the environment looking after the environment as well as the social capital side of things. Right, Jori? 

Jori Armbruster – Guest

Yeah, for sure. So on one side we are talking about this moving forward not only from sustainability but towards regeneration which means you are not balancing your impacts but really taking out, for example, carbon from the air. It’s not that you balance your emissions. No, and we are too late for that. We need to take carbon from there. The other part of the world is regenerative finance. The finance part of it is about rethinking financing in order to be regenerative leveraging web3 tools like smart contracts, tokenomics and distributed ledgers. So I think it’s basically projects that are aligned with the Sustainable Development Goals, which are providing regenerative practices, incentivizing regenerative practices in between their business models and leveraging on crypto in order to be more scalable and align incentives. 

Andy Pickering – Host

Yeah, well, that’s exactly right. And that is exactly what we here at the Dacxi Chain are working on, Jori. We’re trying to create a new global regulated ecosystem where investors all around the world have access to interesting opportunities in far-flung parts of the world such as Mexico and Spain and the areas where you’re talking about. And if we can connect those investors with different innovators around the world and then link some of those investment opportunities to tokenization, create secondary markets where that equity can be traded, then eventually that means that these investors and innovators can meet each other in a marketplace that is regulated. And that’s the future that we’re all working towards, thanks to Web3 blockchain tokenization, right? 

Jori Armbruster – Guest

Yeah, for sure. I think the regulated part of it is very tough because we are facing, when we are talking about innovation, it takes years for regulators to understand that innovation and create the framework for that kind of new financial tools, for example. Right, so I think we are starting to see something in Europe which is where I’m more aware of the laws we have now, which is a good first step forward, but still is about cryptos, for example, not NFT nor DeFi tools. So it will still take years to have a framework for that to be regulated. 

Andy Pickering – Host

All right, well, as we start to finish off, just tell us what you’re working on at the moment with EthicHub. What is coming next? What are you working on? 

Jori Armbruster – Guest

So one very important thing that maybe your community can participate in is we not only need the people to lend to the farmers and the people who provide collateral by staking in Ethix, but now we are doing a crowdfunding equity round for us as a project. So this is in Adventurees and I can share the link with you so you can put it in the podcast notes. And this is the minimum ticket, 1500 euro. And you can do it from wherever in the world too. And the other part we are working on is a product, for sure, tens of parts of the product that have to be still improved. We are moving towards launching the Dao for the lending protocol for the end of the year, beginning of next year. 

And like a bit of side products of EthicHub, we are working on how to tokenize the carbon credits of our farmers because they are not only excluded from the traditional financial system, traditional certification, organic certification, for example, but also from carbon credits markets because they are too small to do the proper due diligence on how much carbon is there. But we are very creative as we have been with the financing part of it, and I think we can find solutions for that. And we are also working on these pilots with the solar panels etc.

Andy Pickering – Host

Awesome. Well, thank you so much for sharing some of your story with us. I’ll certainly put a link in the show notes to that crowdfunding round that you talked about. There’s also a link in the show notes to EthicHub. But listeners, if you want to check it out now, it is just Ethichub.com. Jori, thank you so much for coming on the show. All the best and bye for now. 

Jori Armbruster – Guest

Thank you very much to you and thank you for inviting me.

Andy Pickering – Host

That was Jori from EthicHub. And I thought this episode is just a good example of the promise and potential of where the Dacxi Chain is heading. We’re creating a new, fully regulated global ecosystem. The idea, of course, is that investors all around the world will have access to new innovation investment opportunities. And for the founders of those innovative companies and ideas, they will need funding for those ideas, and they will be able to access that global investor pool. All done in a safe, sophisticated, mature, and regulated way. Of course, it’s done at scale globally via tokenization of those equity shares so people can invest in whatever amount they wish in line with the regulations in their country. 

And so, of course, the Dacxi Chain is going to solve the liquidity issue, give people the ability to trade in and out of those equity positions via tokenization at the local level. Through a network of locally owned crowdfunding platforms, Dacxi will launch a specialist secondary market for trading. I think EthicHub is one example of a platform that could be connected to the Dacxi Chain by phase two, phase three, phase four of the Dacxi Chain rollout in the years ahead. So, yeah, it’s exciting times. And of course, don’t forget that later this quarter, the Dacxi Chain will announce phase one and its first launch partners. So we have all that to look forward to in the months ahead. 

So do make sure you keep listening to the podcast and make sure you’re subscribed, but that is today’s episode. Thanks, team. Thanks for listening and bye for now.

www.ethichub.com/es/

https://www.adventurees.com/ethichub-1