Karl Samsen on institutional interest in digital assets

0:02i'm ashton addison from event chain for investment pitch media and fintech news network and today on blockchain interviews we have carl sampson the vice president of capital markets for gda capital a global finance financial institution for emerging technologies including blockchain and digital assets carl thanks so much for taking the time and welcome to the show

0:22i should appreciate it thank you for having me you're very welcome i'd love to start out with a little bit of background if you could tell me about yourself how you got into venture capital and you know what first interested you in blockchain interesting so you're taking me back here um so i went to school actually i'll preferences off by saying that you know i come from the

0:44traditional wall street financial background in terms of you know that's where the roots of my family have been for the last you know 30 something years um and you know i went to school um thinking that potentially i was going to join um you know one of my family members in the business uh found entrepreneurship rather rather early um blockchain and mostly bitcoin back

1:08then was kind of the hot thing in terms of you know what people were throwing their money at in college you know besides the unusual um and you know i got in a little early in in bitcoin didn't really have any uh significant interest or you know appreciation of the space until i really ended up uh you know leaving college and moving back to new york where i'm from

1:31uh when i did that um i got in touch with a individual who was a rather large art collector and this is during the time i believe it was early 2018 mid 2018 um when the industry was just kind of coming down from the massive highs and you know unfortunately there was a lot of lack of liquidity um but there was a lot of great creativity in terms of their projects

2:00that you know had some fantastic ideas but you know lacked on leadership or or money or whatever the um you know whatever the potential uh you know crunch was at that point so this gentleman wanted to figure out how to monetize or create liquidity for his you know massive art collection um obviously using roots in blockchain um so i'm a new guy you know i worked in

2:25for maybe a year in the uh registered investment advisory business you know started to get my license um you know what what did i really know about the business so i reached out to everyone that i thought you know had some sort of good foothold in the space and that's when i ended up connecting with my now partner and our ceo of gda capital um michael gord

2:49so michael myself and this individual at the time the large art collector we uh established a meeting in the city because michael's and our firm is half based in toronto half based in new york and so michael flew down from toronto and so this individual um this large art collector brought his ceo me and you know we were going to meet michael in the then office

3:16of of his former company nlg blockchain which merged with sdm to make what is now uh gda capital so you know we're in this meeting in a tiny little rework office poorly lit you know maybe the size of my closet and um i'm thinking god damn this is gonna go you know south really fast you know i should be turning in my

3:42uh my employment papers this should definitely be reworking my resume like you know what what was i thinking um and michael started talking and he just captured the audience like i've never seen somebody capture an audience he um he knew exactly what he was talking about he had the experience in the space and immediately i was like wow not only is this guy

4:06brilliant but his vision and where this potentially could go is unlimited um so from then i basically wanted to figure out how do i get myself more involved in a space from more of a financial perspective i want to be in them i want to be in the market i want to be a client of the market um so fortunately uh you know

4:34mlg blockchain back then was doing a significant amount of road shows in new york city and they had really great relationships with the canadian consulate and so i went to one of the um one of the road shows at the canadian consulate and i participated and at the end i basically said look michael i you know i want to join you guys i think that you know

4:54there's a significant opportunity here for you to create an investment bank um you know this is where i see the young generation you know performing and having the freedom to be as financially creative as possible um so you know the rest is pretty much history you know i joined them that day we merged with uh sdm we created gda and you know now we are as you said a

5:17full-fledged stuff on institution for what i deem the modern economy yeah it's a great little backstory carl and i have been friends with michael for a few years and i know that he's so passionate about blockchain when he was in mlg blockchain yeah he could definitely captivate the audience and now that this merger has happened you have gta capital now can you you talk about what you and

5:40michael and the rest of your team have built at gda capital and what you're searching for in the market right now yeah so we've built basically a epicenter or bridge between what we deem the modern economy and institutional capital or we can call retail capital people looking to gain access to what i believe is the forefront of the next generation uh in terms of financial instruments and

6:07in terms of financial rails we essentially provide two services we are both educators and we are i would say liaisons through the wild west of what is cryptocurrency so you know mostly who we deal with are high net worth individuals you know venture capital funds uh you know hedge funds in in the uh the rare circumstance we deal with traditional funds that you

6:35know are looking to potentially diversify themselves into cryptocurrency um those range from you know broker dealers to family offices etc but you know mostly everyone that is coming to us either for help for investment ideas um you know for relationships introductions trading they are already experienced in the industry um it's a rare moment but it's

7:01also a fantastic moment when we're able to take somebody who you know has hurt his face been following the space doesn't have a foothold in space you know educate them hold their hand for about you know six months or so and finally they're ready to invest you know their first seven figure check into the industry and you know from there it's off to the

7:19races you know our our job really or my job specifically um is mostly to you know protect them um in the industry by uh making sure that they can get in smoothly but also protect them on the outside or on the exit because as we know it's a volatile industry um you know we we look for projects and we look for companies and management teams that allow us to create meaningful

7:46relationships that also have the infrastructure for us to be able to mitigate potential interests in this industry that's great and yeah you are right about the institutional interest just in this past you know since the beginning of 2020 alone there's been all of these different uh institutional uh not products but more institutions just showing their support including

8:09chartered banks and visa and mastercard and i want to get into that a little bit on the institutional side but i i just want to talk about what you talked about here is warming people up uh to their first investments and the fact that there is so much institutional interest already there's a lot of other hedge funds now and money managers that are doing similar things but

8:31i'm sure gda has found some kind of niche or competitive advantage or unique feature can you talk about you know what stands gda capital out from all of these other managers well we are people first we believe and i don't mean to quote steve jobs but you know we invested people not product and granted that you know this is a very product heavy industry in terms of you

8:56know we operate on what is a distributed you know universe or decentralized universe um and you know that is essentially in reality almost our god um we believe that our clients number one always come first so we are very client focused in terms of providing white glove services and you know being around for our clients you know 24 7. in addition we always look for the best

9:24possible people that are in blockchain to take or receive capital right we look for those um you know those elon musks those steve jobs those you know jeff bezos of the blockchain universe that have been yet to be discovered um because they're either transitioning from the the modern financial system now into what is the you know the blockchain

9:51arena um or you know they have yet to really discover or their project has yet to really discover what their best use case is i mean there's there's a lot of projects out there there's a lot of great great use cases a lot of real-world applications a lot of room for adoption and what we find 50 of the time is that you know there's outside of their intended niche a

10:18another use case for their project that might even be lower hanging fruit um that can drive cash flows and you know that's uh it's always a very positive thing about this business is that you know there is no one mold it's you know very um you know yeah on the uh you know with these startups especially in 2020 right now partially because of the d5 movement

10:45there's been a huge influx of capital according to some of these sites the amount locked in smart contracts went from a billion uh in the beginning of the summer to now almost 8 billion and it seems like this is becoming almost bubble-like with you know how fast this money is flowing in uh but as well we've seen all these institutional announcements

11:07and there seems to be a lot of legitimacy behind it as well um so there's a lot of different variables uh what do you see as and do you see like actual value behind the reason that a lot of these institutional investors may be investing into this d5 space right now and and how come it's grown you know eightfold in such a short amount of time yeah look

11:29defy took the industry by storm and there are many reasons for d5 having taken the industry by storm if you look at you know capital markets you look at the 10-year treasury you know your sub 100 bips you look at the last 30 years of interest rates and of you know fixed income and you see yield has basically dropped off so people are traditional income

11:51investors or fixed income investors which mostly make up part of our you know traditional side of or institutional side of capital um inflows they're looking for diversified yield right they're looking for something to replace what they were used to back in 2000 when you know high yield bonds were in you know the the 15 to 20 you know per annum you know yield rate um and you know

12:16because they are looking for that new yield um it creates an opportunity as well as a greater appetite in terms of taking on more risk and we both know the risks that come with crypto i think that dfi for now right now does a somewhat decent job of mitigating the risk in terms of the high appreciation of of uh you know locking up assets or lending or

12:40you know borrowing etc um but you know the main reason is you know people are hungry and they're not really satisfied with where they're eating they're looking to you know venture off into space that might feed them you know what they're accustomed to eating and d5 is basically been able to support that for the institutional markets yeah well it's definitely a major trend

13:02right now not sure whether to call it a bubble yet yet or you know if it will become a bubble in the near future here but it's growing exponentially and some of that you know all trends are cyclical so when there's huge ups there can also be huge downs and that for institutional investors at least ones that are looking more in long term uh it's probably not a good idea to

13:26start investing at the top of the bubble you know so in terms of the clients that you have and the discussions that you've had do you see other things on the radar for institutional investors in blockchain beyond this trend well i'll start off by by mentioning you know what what's i guess on our map that we haven't started talking about yet that is is the fire bubble um or you

13:49know what what is what is going to be the end um of d5 and i i personally have no logical view on that i think that in terms of the enormity of the opportunity i mean you're looking at a multi-trillion dollar financial market system that it could potentially disrupt um and what that has done um with you know great reason has definitely been the spur

14:15of regulation discussions you see a central bank um looking at the growth levels of crypto granted that you know you know a few trillion dollars in gross market cap is still not something as significant as you know what we're currently you know accustomed to in the traditional markets because apple's company is over you know a trillion dollars at most periods of time but

14:44because there is the possibility and because essentially this world is unlimited or this technology is unlimited in terms of the users for it there is definitely behind the scenes talks of deregulation um amongst traditional uh markets in favor of potentially regulation amongst defy um you know there is no true end in sight for

15:13us in terms of where the defy opportunity will will start to um essentially collapse we've as as liaisons to the crypto space been investing uh outside of d5 more towards the long-term vision of crypto which i personally am of the opinion will be data and uh secure data storage etc um you know one of one of the projects we're very bullish on is uh is

15:41consolation networks reason for that is because one they've positioned themselves as i don't say a threat but definitely a competitor to ethereum in terms of creating their own uh mainnet on which they can start building d5 products or whatever the new product uh currently is they also have a transaction layer um on their protocol that allows them to

16:09integrate with erc20 so essentially you can pass through investments or assets across the uh the layers but mostly we're looking towards long term i mean it's great for us to be you know making 10x in you know three months on you know xyz project that's here today gone tomorrow we're focusing on what's here forever well said carl we're running out of time

16:34in the interview but what right now is gda capital looking for in terms of are you looking for more startups to talk to or investors potential partners and how can they reach out and discuss with you and find out more information we're always looking to discuss opportunities with new investors we certainly have a large backlog in terms of projects that we can support

17:01and we can provide access to um if anyone ever wants to get in contact with our firm myself any individual we make ourselves very accessible just you know look me up on linkedin one of the best things and i'll attribute this to uh you know discussions i've had with traditional um you know broker dealers and investment advisors and financial analysts etc

17:24is that you know the greatest firm they've ever worked the greatest firms they've ever worked at um had something all in common and that was the fact that they all had an entrepreneurial spirit and what that means to me is or what we tend to or how we've replicated that in terms of gda's approach to you know clients and merchant banking services and you know capital markets is we make

17:47ourselves no matter if you're the ceo or the chairman or the head or the vp of whatever department if you are our client it is always in our best interest to deliver to the best of our capabilities for you so we will make everything under the sun and we will do everything under the sun for you in order for you to participate in what we see as the next generation of

18:15finance that's really uh that's really great of you carl and it sounds like gda capital is doing well and i wish you all the best uh moving forward with your team i will leave the link to your linkedin and to the website for gda capital in the description box below for the viewers thanks so much for taking the time all the best moving forward and let's follow

18:37up in the near future i should appreciate it take care have a great weekend everyone else enjoy