Dror Medalion on tokenizing securities with blockchain technology

0:01I'm action Addison from event chain for investmentpitch media and FinTech news network and today on blockchain interviews we have drawer medallion the co-founder and GM of stole arrow drawer it's great to see you again thank you so much for being on the show it's a pleasure to see you again and I'm glad that you're here thanks for having me on okay it's great

0:22to be here again you're very welcome let's kick it off by talking a little bit about still arrow now Solera is an alternative investment banking platform what does that mean and how does it involve blockchain technology well yeah you describe it correctly I might add to that that we are acting as digital securities underwriter in the space of cryptocurrency and auction in general

0:48and what is that we are doing exactly is we are taking the industry and creating the correct and compliant structures or crowdfunding or actually helping businesses to raise funds using digital shells using tokenization structures for private equity funds for real estate asset owners for startups for SMB is that the main goal still arrow is aim to achieve

1:20which I know it's a big title but we honestly see us up as an underwriter in this business because we cover everything from the ideation to business model to tokenization schemes and also at the end we are also taking care of the distribution and marketing very interesting and now what is the difference or the advantage for companies to create digital shares

1:45versus just creating a regular share so if you think of we are always dividing into three pieces of this puzzle the IPO the additional capital markets the ico phase which were some kind of experience as we call it and now the sto or DSO which is a security token offering or digital securities offering and what we noticed it was a year ago when we

2:12founded the company is that the regulation environment is going to be much more matured along the way like we are noticing a lot of countries accepting this new method of raising funds with digital shells obviously we know that Facebook is now launching their own cryptocurrency I know that JP Morgan did maybe one of the biggest investment banks created his own

2:38cryptocurrency to conduct his own internal wires so we are saying the industry going to that direction but what you don't have you don't have a firm that takes care of all the puzzle pieces here because it's very complex it's complex to take all of those different components like legal aspects and audits of you know the audit is very

3:08complex because it's not just accounting audit of financially it's a technical knowledge you need to go over the smart contracts make sure they're fully compliant with the local regulator make sure the business model that were presented in the white paper offering memorandum were well structured in the code and make sure the let's say the investors rights are properly secured in

3:32the debt code as well like revenue share and dividends so we are seeing a completely different game from the IC on face the value proposition for investors of much higher yield they actually get it who share digital share they can hold in the wallet and not just wait for some they say powerful down to to get a quick meal they hit a piece of the pie they

3:57get to be an owner of a shell company and if you think of the IPO space that's – that's so expensive no company today can do an initial public offering on any exchange without securing millions of in millions of dollars and it's too expensive it's not transparent a swirl of bureaucracy and the digital security spaces they can kill off a lot of those

4:25points mmm-hmm interesting and that's where still arrow comes into play yeah exactly awesome and what stage of the development of Solero at right now and is it already live in the market yeah so actually what we are doing we are building a platform we are already ongoing with that R&D and this platform is for two phases of the of the structure is for this step of let's say

4:56the funding itself the investors management investors relations although involved in can we see AML processes they have identification processes that that's it being done on our platform but the second phase in a in my eyes that's the most important phase is the post sale management because after you create that funding and you complete it that funding round

5:21you need to take care of your investors you need to take you over the alert amplification the asset management so an investor can log into the platform sees portfolio and take care of his own assets and and and funds because you know that's that's there it's not just holding a token in their wallet it's a true asset that that will create yield for them and they need to keep it safe

5:47and in a certain platform that will allow certain benefits so it's also asset management and investors relation management platform and that's the main products Taleo is building these days the product is already operational so what we are doing we are implementing it with our customers on the website as a white label so they can use it order investors but in the future you know our

6:16vision is to have many more customers and we call them partners companies that we help raise capital and so we can create like a portfolio and open this platform to the public to become some kind of a secondary market to manage the public assets very interesting and have you also used your own platform to create a still arrow security token

6:44yeah that's correct so what we came to realize that we are working for more than a year now in based Intel view in the startup nation and we are you know we are conducting those are crowdfunding campaigns and not only quite fun and painful but also they say larger rounds for let's say private equity funds that wants to raise 100 or 200 million and that's a different different structure

7:13from your regular old funding campaign in Europe for example so what we came to realize is that we have that structure of private equity funds or real estate funds we have the structure for real assets but we don't have a structure with startups OS and bees because startups or SMB is you know they have like proprietary assets right it's not to realize it but that's the proprietary

7:38acid so the the first thing which we thought is let's do that structure on ourselves and create that security token called STL and utilize the platform post Alero on our website in order to create the use case from A to Z with that regulatory environment that we are working in Europe under the yes emailing relations and let's remember guys this

8:05is a security token right so it must be fully complied it must be escorted by by talk to firms we are working in partnership with BDO one of the biggest I think audit and consulting firms in the space we are working with top deal lawyer firms that make make sure that we are working in a fully compliant environment so when you take that structure you have that validate or

8:33bottle dealer in Europe that allows you that sign that white paper allows you to sell to the public in Europe and also to retail up to five million euros so that's a very good structure so we build that structure not only in the technology aspect the issuance the platform but also we took care of the missing puzzles of the Asians in legal and you know that's the

8:57most important thing for any issue to make sure it stays fully compliant and work in a very safe environment mm-hmm very interesting and how does the business model differ from traditional investment banks to talero are you guys still making money in the same ways that you would yeah I think you know it's very interesting because what we are trying to do here is

9:20is create some kind of electrical of the traditional capital markets because you know this is a financial industry it's not the technology in my eyes it became like a commodity okay it's not the message here because to be honest anyone can create a smart contracts right it's not that hard but the smart contract itself is just the infrastructure the issue and also the investor they don't

9:47care as much as we think about the technology itself they just want it to work right it's like it's like Wi-Fi it works or not right because that's a digital sure they hold it if it's secured enough it's easy if it's fully compliant and exported by by the best partners so it just works and if you take the traditional investment banking this space is so expensive you can't

10:15even walk in the door to think about any of finding ground so it's just not suitable for your small medium businesses it's not irrelevant for them it's not relevant for the start of a tier level okay so for that you need some kind of an alternative investment method which digital security just makes sense because you you sell shares that represent some kind of a revenue stream

10:43or dividend portion but you don't sell any seed in your board or on your decision-making quarum so it just just a win-win situation interesting and and if there's companies that are around the world looking to do security token issuances I would suspect that depending on where they're based in the world there would be specific laws or regulation

11:08they would have to abide by now how does stiletto deal with that and are you quarantined to specific countries or can anybody really use talero well first we are a global firm and we are working with partners all around the globe starting from USA Canada and also in the Middle East in Europe in Australia what we decided to do is create like an ambassador plan or hubs

11:37of stellar own in those certain places so in places that we know certain instructions were fully compliant from A to Z legal and under specific regulations like in Europe for example in Spain in Switzerland in Eastern Europe places like Malta Estonia places like that but also in Western Europe you already sing the the German regulated regulator in London those guys are

12:08starting to get into the game and you see structures that are actually working and we know how to collaborate both with local broker dealers with local law firms and with actually the regulator themselves I've conducted more than a dozen calls with regulators around Europe and in Canada and United States because we are walking with them not in a different path than the regulator this

12:38is an industry that when you want to stay fully compliant you need to work in a specific let's say legal framework so for example in the States obviously everybody knows that the SEC has their own limitations so what we offer to our customers is working with the most common practice as the regulation be five or six seed you know that accredited investors can join and invest

13:04their own money but if you are working in Europe that's open to the public and specific exemptions if you'll be working in the Middle East you have that as well what we've done is created an automation in our platform when you log in and do the registration choose nationality and the system automatically pops up the specific form that's suitable for your regulator so if you

13:31are work if you are we are recognizing you IP so if you're sitting in a place in Africa and for my knowledge you can't invest in certain assets you will be notified them immediately and if I need you to be an accredited investor professional investor you will have that form pops up and you will not be allowed to join so we are working with the most common practices around the globe

13:58supported by lawyers of course that's great to hear that's wonderful and what is what is your team looking for right now are you looking for more developers are looking for investors or just more companies to to utilize the services so I think for starter you know we are now conducting conducting our own sto a 5 million euros around in Europe we can see that on our

14:24website as well but for our old map I thinks the level has decided to really act as the threshold between the traditional capital markets and the blockchain environment and when you combine the two you actually need the producer you need one a specific firm or a team that knows what they are doing in order to combine all the missing pieces of this puzzle together because

14:53you have many issuance agencies you have many marketing agency many developers in the in the industry but you don't have a team that combines everything together and acts like an underwriter and also takes care of the distribution at the end point because we have our network of visas family offices engine vessels also in Israel and abroad and what we are

15:19doing we are conducting wrong shows meeting face to face meetings we are taking that partner as we call in not the customer and going to this journey waiting shoulder to shoulder in order to complete the funding and also manage the funding after that the cell is over which is the I think the most important thing definitely and how can people learn more about Clara so anyone can

15:47obviously get into our website and see all the materials see our workflow you can check our official offering memorandum and light paper and investors that we have many many interesting materials that speaks about the digital signal in spades in general but also about conducting sto structures in a fully compliant way and you can check that out in our website our ongoing

16:16security token offering is just started it will be live for two months and hopefully we will conduct that find it as it in this very successful way and then we can utilize that for our customers place amazing tour medallion co-founder and GM of Solero it's been a pleasure speaking with you again and all the best on the project sounds like you got some good things going on and I wish

16:43you luck moving forward thanks ash thanks for having me in your show today to be an amazing and good luck thank you so much you