You’re listening to Unleashed with the Dacxi Chain, hosted by Andy Pickering. Hi, folks, it is Andy here. Welcome to Unleashed with the Daxi Chain, a podcast where we learn all about the Dacxi Chain and the incredible opportunities it unlocks. Let’s get on with the show. Well, here we go, people. As you’ve heard in the intro, my name is Andy, and this is the very first Dacxi podcast. The podcast is called Unleashed with the Dacxi Chain. And as the podcast goes forward, we’ll explore the world’s first global crowdfunding network. We’ll learn about the blockchain technology that makes it possible and get insights into the new wealth-building opportunities it creates for entrepreneurs and everyday investors everywhere. So it seems appropriate then, that our first guest for our first episode is Mr. Ian Lowe. He’s the Dacxi Global CEO, and today he’s here to talk about the Dacxi Chain tokenized global crowdfunding and why a blockchain and tokenization ecosystem will be a game changer. Welcome to the show, Ian.Good to talk to you, Andy. Good to talk to you, Ian. Just because it’s the first podcast, and I think it’d be good if Ian, you could just briefly introduce yourself. Most Dacxi listeners will know exactly who you are, but let’s put it on record one more time. Ian. Yeah, take it away. Please introduce yourself.

Yeah, I’ll be pleased to. So my name is Ian Lowe. I’m the global CEO for Dacxi. The Dacxi business really comprises two key elements or two key businesses. One is a wealth business that is taken into the market through a wealth platform where we offer alternative investment opportunities to everyday investors. And the second is the Dacxi Chain business. And that is really, I think, what I’m expecting at least we’re going to talk about a little bit today. And that’s around a vision or realization, if you like, that created a vision where the impediments to the success, the global success of crowdfunding. We see a future where blockchain is really going to redefine what’s possible with crowdfunding, equity-based crowdfunding. So they’re the two elements of the business. There are obviously complementary dimensions to that, and many who have heard us talk about this in the past will be aware of those. But they’re separate but related parts of the Dacxi group.

Yes, of course. Well, today then, Ian, I suppose we’re here to start to learn a little bit more about the Dacxi Chain.

So I think to begin with, let’s set the scene, let’s have a bit of context. I think it’d be really useful if you could give us your thoughts on how you think of the current state of early-stage funding around the world.

Good question. So look, our observations are the following. And first of all, when we talk about early-stage funding, we’re talking about businesses that are yet to go through that really significant growth curve. That is the opportunity they’re shooting for. But equally, these are not thought bubbles these are businesses that have a product, service, or capability. They have customers, they have a well-defined business model and much of what they’re doing has been validated. So early stage are businesses with genuine growth potential. But that potential is really based on tangible capabilities that are already being commercialized in some way, shape, or form. So typically an early-stage company has a great idea, they’ve got a product or service they’ve built, they’ve validated the opportunity and they’re looking for growth capital. That’s a very typical scenario with early-stage investment. And look, early-stage investment or investing, investment today is characterized by a few things. But if we just look at the market more generally, the early-stage companies are sort of funded in a couple of ways. One very common way is they’re funded through friends and family, sometimes unkindly referred to by some as friends, family, and fools. People that have some kind of connection with the people that have created that business and obviously want to support them. But the other way that’s much more common and constitutes a lot more of the capital that funds these growth companies is through sort of one of two paths. One is venture capital. So these are organizations that exist to find high growth, high potential businesses and invest in those businesses, providing them the growth capital they need to grow and then benefit as shareholders of that company. And the other, which sort of emerged over a decade ago, is crowdfunding. And crowdfunding is really the idea that we can offer a much larger number of investors, a much smaller amount to invest to raise the growth capital that I need as an early-stage business. And I can do it through a crowd, as the name suggests, but just give some relativity to those two segments. So that is venture capital as a source of funding early-stage businesses and crowdfunding as a source of funding early-stage businesses. The venture capital market, as best we can assess, is valued at around about $230,000,000,000 a year and growing. The crowdfunding market is probably less than $1 billion a year, and also growing. So in terms of relativity, I think it’s safe to say that the significant majority of capital flows into early-stage businesses with genuine high-growth potential, a very significant majority of that comes out of venture capital. And look, the effect of this is really quite significant and it’s across the whole sort of ecosystem or value chain. So the first is for the company that’s looking for the growth capital having to go down the path of VCs where crowdfunding hasn’t really delivered for them as a really accessible source of growth capital having to go down the VC path materially limits that company’s access to growth capital and with it obviously their ability to grow. From the investor perspective, it means that 99% of investors out there are simply locked out of the best opportunities because they’re all mopped up by venture capitalists who are very good at doing exactly that. And more importantly, of course, what they get to do is they get to cherry-pick all of those high-growth companies that are looking for investment. They get to cherry-pick those and in turn, it’s a very small number of VCs, a surprisingly small number of these groups that represent the vast majority of the capital that is invested. So you’ve got a very small number of VCs in a very small number of physical locations. There are not 50 places in the world where these VCs are based. They’re concentrated around only a handful of locations, but they control the very significant majority of the capital that flows into early-stage high-growth businesses. And so by virtue of this, you end up with this sort of self-perpetuating cycle where the wealthy who have a seat at the table through those venture capital businesses, have access to the best wealth-creating opportunities. And by virtue of that, they can obviously recycle their own wealth very effectively. Whereas the everyday investor, typically by virtue of the fact that crowdfunding just simply hasn’t developed in the way that it was imagined it could and should, the everyday investor is really locked out. And I think the corollary of all that is that great innovation is either underfunded or in a lot of cases just simply unfunded because the supply and the demand don’t come together in the way that they should.

Okay, got it. Ian so if that’s the case, then we’ve talked a little bit about crowdfunding and of course, that is one of the specific use cases for the Dacxi Chain. And crowdfunding is not a new idea. We’ve seen this kind of global crowdfunding trend as the world goes increasingly digital. I’m sure that there have been successes along the way, but many failures as well. So if that is the case, why do you think that the traditional crowdfunding model has failed?

I’m not sure we would say it’s failed, but it’s certainly massively under-delivered on its true potential. The reasons for that really boil down to there are two really primary challenges associated with crowdfunding today. The first challenges scale. And the lack of scale in crowdfunding is really at the heart of its greatest challenges. So just to give some detail on that so lack of scale comes in a couple of different manifestations. One is that crowdfunding today is almost by definition a local proposition. In other words, if you want to invest, let’s take Australia as an example. If you’re an Australian investor then really the only investment opportunities available to you through an Australian-based crowdfunding platform are Australian-based companies. Now in many cases, that’s okay, but of course, what that means is you have multiple markets all operating separately and separately where there’s no network effect by virtue of the fact that they all operate locally. Now look, over time there’s been a couple of crowdfunding companies that you can count on one hand who’ve entered more than one market. But this network effect really was the premise of crowdfunding by multiple growth companies looking for investment and many thousands of investors that would invest in those and write down to very small denominations rather than large amounts like VCs. But it’s the lack of scale in that network effect by virtue of the fact these are local-only businesses, these crowdfunding providers. And that’s a byproduct of a number of things, not least of which is the very strict licensing regimes that crowdfunding equity-based crowdfunding companies must operate under, in most countries, those licensing regimes are by definition local. You can’t impose a licensing regime in market one against investors and investors in a completely different market. They are by definition local. So there’s a lack of scale around this concept of crowdfunding today being really restricted to local opportunity only on both the investor side and investee side. Investee is the company you’re investing in and that creates a lack of scale. And lack of scale means, quite simply, there’s less capital available to these companies. Raising capital takes longer and very often it means that capital is more expensive for the company. In other words, they have to dilute their shareholding in their own business to attract investors by offering more attractive terms because of that lack of scale. And so for the very best of the growth companies out there, crowdfunding has just been less attractive because of this lack of scale. Liquidity is the second primary challenge. This is well understood. I invest in a privately held company, when do I get to cash out? When do I get to realize the upside of my investment? Well, that might be a year, it might be five, it might be ten, it might be longer. It’s not only a long period, in many cases, but it’s also an undetermined period at the time of investment. So there’s a lack of liquidity in the privately-held company investing and that presents its own challenges, particularly for wealth-minded investors and in crowdfunding that individuals rather than companies who are looking to build a position around the accumulation of wealth specific to a time frame or a certain outcome. So liquidity is another challenge. But lack of scale is really the central feature around why crowdfunding hasn’t realized its true potential to this point.

Sure. So if those setbacks or stumbling blocks, if you like, so you’ve talked about a lack of scale and liquidity, that access to the liquidity. If these are some of the problems or stumbling blocks for crowdfunding, then what does this mean for, I suppose, entrepreneurs and startups and investors hoping to get exposure to these startups? What are those stumbling blocks mean for those people around the world?

it means a couple of different things for entrepreneurs and different things again for investors. Just to clarify, though, early-stage businesses may not necessarily be startups, they usually aren’t. They’ve created a product or a service. They’ve had an opportunity to validate that and really take the next step to operate with a greater scale than they need capital to fund that growth. So if I look at the limitations associated with crowdfunding today and what that means for entrepreneurs, for example, very simply it means I have limited paths to the growth capital I need and I’m probably if I do secure growth capital, I’m probably going to secure that from a venture capital source of venture capitalist. Now, VC capital is highly sought after because they control all of the investments and all of the capital that flows into early-stage businesses. VC capital is a highly competitive proposition for entrepreneurs and it requires them to have a very organized and professional approach to attract VC capital. So it’s not easy for the entrepreneur in that very competitive environment to stand out and to know how to present their story in a way that is understood and attractive to venture capital. The other implication, of course, is that venture capital today operates in a way that realizes its importance in the broader scheme of growth capital. In other words, they know they are the very significant majority. Almost 100% of the growth capital that finds its way into companies today comes through VC, so they behave accordingly. VCs almost always negotiate some form of preference on the shares that they receive for their investment. So preference shares might be first in line when certain milestones are met, or indeed when those milestones are not met. It’s not uncommon for them to have ratchets in place if certain milestones aren’t met at certain timeframes or if certain financial performance is not achieved. So VC capital comes with some real hair on it. It’s not always in the best interests of entrepreneurs. It’s almost guaranteed to be in the best interests of the venture capital of the source that provided it. So here are some of the limitations as it relates to the reality of raising capital for entrepreneurs today and of course for everyday investors, it just means that these opportunities are literally invisible. They just don’t have access, they don’t have a seat at the table crowdfunding will give them a thin veneer of some of those opportunities. But because of the lack of scale and some of the other issues associated with that, we haven’t really created a big enough crowd. Without that demand, we can’t capture the hearts and minds of the entrepreneurs in the way that we need to, and so we end up with this self-perpetuating challenge around scale. But right now, for the investor, the most significant implication is that they simply don’t get any access to the investment opportunity in these growth companies. And I guess if you look at the corollary of all of that, great ideas and great innovations are being lost to a lack of funding. That’s really the outcome of all of that combined.

Yes, that’s very well said, Ian, and I’m conscious then we’ve explained or you’ve explained some of the problems than in existing crowdfunding models. And it’s probably time, Ian, to perhaps flip the script. Let’s try and start to put a positive spin on all of this. So I suppose that’s a way of leading into what is the potential for a crowd-funded private equity market? Let’s try and get on a more positive footing.

The one-sentence response to that is the potential is truly limitless. Yes. If you imagine the network effect and you imagine it with a genuinely global scale, when crowdfunding first came along, it really captured the hearts and the minds of many, including many entrepreneurs, who went and actually built a lot of the crowdfunding platforms that exist today based on its limitless potential. And I don’t think any of that has changed. That limitless potential is absolutely still there and waiting to be tapped into. But I think if you think about what that potential means as it becomes more significantly realized for both entrepreneurs or investee companies and the individuals that would invest in them, there are a couple of really obvious ones. And in many respects, it’s the flip side of the problem. So for entrepreneurs and early-stage businesses, the clear benefits include far less restriction around their access to growth capital. But I don’t have to travel the path well traveled to VC land, do a deal on their terms, compete with other companies where a very small number of those investors in an even smaller number of physical locations control, you know, in excess of 99% of the capital that flows into growth companies. I just don’t have to do that. I’ve got another option. That’s a viable option. Now, with scale, crowdfunding also is not just about access, it’s about the amount of access. So restricted access is one problem that crowdfunding, properly realized, addresses emphatically. But the other is that just the sheer volume of growth capital now, access to greater growth capital, and again, this gets back to the question of scale means I can actually access it faster. Now that’s important. Growth companies are often in a race either to meet a market requirement or to be the first to market. There are a number of reasons why it’s, you know, velocity important. Raising capital as a private company can take six months, and it can take twelve months depending on the business and the nature of the market opportunity. So scale that we can achieve through crowdfunding is not just access and it’s not just access to greater amounts of capital. The byproduct of that is faster access to growth capital, which is tremendously important. The other byproduct of that is potentially better valuations for the entrepreneur. Because if capital is more available, and it’s available in greater amounts, and by virtue of that I can access it faster, it means that I’m probably going to get a better valuation on my business or it will be a less dilutive event for me to go and raise the growth capital that I need. And then of course, when the investment is all done, in the world of crowdfunding, the entrepreneur is issuing ordinary shares, not preference shares. So they don’t have all of these onerous conditions associated with an investor, a large investor. They’ve got a crowd that has collectively invested and they’ve all got ordinary shares just like everyone else. So there are a number of significant benefits there for the investor or the entrepreneur. For the investor. Well, again, it’s a flip side of the challenges. Today crowdfunding, fully realized, means that the 99% of investors out there today have a seat at the table. They have access to a whole catalog of investment opportunities in businesses, many of which they’ll have some appreciation of because of the scale, access to more investment opportunities, and lower hurdles of access. So again, the whole premise to crowdfunding is that everyday investors can invest maybe only $500, maybe as much as $10,000. But the point of entry, it’s a very low hurdle, which of course, being a crowd-driven proposition, it needs to be. And of course, if you think about the proposition today, the wealth-building proposition for the everyday investor, in truth there’s a very narrow subset of all asset classes that they can invest in without any real friction, right? So if I want to invest to create wealth over the medium to long term today, I’ve got access to shares. I may or may not be investing in things like ETFs. Most people don’t. I’ve income-producing investments, including term deposits or the equivalent cash deposits. I may or may not be investing in property. Beyond that, the amount of investing for the everyday investor in other asset classes starts to drop off really, really quickly. So what this starts to offer to crowdfund fully realized is a genuine diversification opportunity for the everyday investor. And obviously, diversification when it comes to wealth building over the long term is really, really important. So there are lots of knock-on benefits that we see for both the entrepreneurs or the investees and the crowd that would invest in those companies. Enormous benefits flow in all those directions.

Got it. Thank you, Ian. Let’s bring it back to Dacxi then, specifically the Dacxi Chain. So what is the role of the Dacxi Chain and all of this? And what is it that makes Dacxi Chain the solution?

Dacxi Chain is a blockchain-enabled platform as a service that starts to solve the issue of scalability through the network effect. But let me just break that down for you a little bit. So there was a fundamental recognition through the emergence of blockchain that all sorts of things became possible through this genuinely innovative technology. And if we look at Blockchain and its capabilities today, it is absolutely a game changer for crowdfunding. It’s a game-changer. And I can tell you now, it’s a game changer with or without Dacxi. So the Dacxi Chain vision that we’ve been working towards for a period of time now, and we’re now starting to get some real momentum on that, that opportunity doesn’t own that blockchain is a game changer for crowdfunding. We’re just pioneering it. We’re the ones that are driving the pioneering of that opportunity. And so if you think about the attributes of blockchain today and how they align with both the challenges and opportunities of crowdfunding, it becomes really quite evident why blockchain is in fact a game changer. So, first of all, the one thing that characterizes blockchain today is that it’s democratized, right? It’s trustless, it’s decentralized. Anyone can benefit from or have access to transactions on a blockchain through a simple interface. So participation is universal. That’s the first thing. The second thing is that it’s borderless. So blockchain is truly global in every sense. And with that, it has a genuine scale in terms of its ability to unlock the network effect at a global level. So there are some of the higher level attributes, but blockchain also just got some really clever elements to it. So we’ve got the ability to embed smart contracts into the transactions that are being done through the blockchain. And so if you think about what that means for something like crowdfunding, it means that terms or conditions or obligations or rights associated with your ownership of shares can be embedded into the smart contract that, in turn, is embedded into the token that represents your shareholding in that business. So the technology is able to facilitate some of the really critical elements of how investors and investors need to interact around rights, obligations, and terms and conditions associated with ownership of shares. And of course, blockchain is also an immutable record. So once that token is issued and that transaction is recorded on the blockchain, it’s a permanent record of that transaction. So this concept of universality around access the scale opportunity associated with blockchain being a globally available technology, the ability to embed really important elements that relate to the terms under which two parties are transacting, in this case, associated with the equity that’s being exchanged in return for the capital investment. All of that can be embedded into the digital token seamlessly and in real-time. And we have immutable records on the blockchain of those investments. So all of that combined, if we sprinkle that with a little bit of imagination and a whole bunch of hard work, we get to a point where blockchain not only could be the game changer for crowdfunding, blockchain is the game changer. It completely reimagines what’s possible through crowdfunding for all participants. And that reimagining is much more in line with, I think, what the world expected crowdfunding could become over a decade ago. So blockchain really is the defining moment for crowdfunding.

Fantastic, Ian. Okay, it sounds very exciting. I think it would also be useful if you could talk about what kind of business or what stage are businesses at for the Dacxi Chain solution. Who is the business target audience, if you like?

Yes. So, look, these are this term’s early stages. Let me just expand on that a little bit. So these are businesses that are obviously yet to realize their potential, but they’ve been validated. And what we mean by validated is this is not a business that’s yet to build its product or yet to create its solution or yet to invent its capability. Right? So the product or the solution or the capability already exists. Now, it may need some further development technology business, for example, if it’s software, then by definition, it’s going to need further development. That’s an ongoing process. But this is a business that already has built something. They’ve got a product or a solution or capability that has been validated. In other words, they’ve either gone to market and had some early success, a better understanding of the challenges on how they expand that opportunity, and now they need capital to make that happen or they’ve actually got a run rate and they’ve got some track record of building the business. And they’ve got to a certain point where they’re saying, look, we really need to supersize this thing, and to do that, we need growth capital. So validated really means that the company, the product, service, or capability has been validated, and the market opportunity has been validated. They’ve got some form of evidence of validation in the form of customer adoption and that could be at different stages. And they’ve got a growth strategy, they’ve got a plan on how they believe they can expand and grow that business and all of that’s been validated. So that’s really what we mean by early stage. They’re still, by definition, in the early stages of building the business, but key elements of what that business represents and the opportunity it’s chasing has been validated.

Fantastic. Thank you for clarifying that, Ian. Let’s start to take it home. Paint a picture for us, please, Mr. Ian. What is the vision then for the future of a world of innovation connected by the Dacxi Chain? Let’s have some fun. Let’s have some big-picture stuff as we start to come to the end of the pod.

We have a very clear vision for Dacxi Chain. We see a future with a global ecosystem of equity funding powered by blockchain thousands and thousands of deals that are now in a position to be properly funded or in some cases funded full stop. Thousands and thousands more deals are funded faster and have greater access to wealth creation potential. So this is really about the democratization of investing and wealth creation for the 99%, but don’t get a seat at that table today. So if you like it’s very much the distribution of opportunity and universality of participation. So that’s the future that we see and that’s the vision that’s driving Dacxi Chain. And we’re hugely excited about some of the developments we expect to announce in the coming weeks and months about our progress on that journey.

Fantastic stuff. All right, well, I’ve enjoyed talking to you today, Ian. I’m sure the listeners have enjoyed listening to you as well. I’d be fascinated to see how the Dacxi Chain starts to evolve and, of course, how this podcast evolves as well. So lots of fun times ahead, but for today, they’re that is today’s show. Thank you very much, Ian.