 Live from San Juan, Puerto Rico, it's theCUBE. Covering Blockchain Unbound. Brought to you by Blockchain Industries. Hello everyone, welcome back to our special exclusive coverage in Puerto Rico for Blockchain Unbound. I'm John Furrier, your host of theCUBE. We're here getting all the action, extracting the signal from the noise. Our next guest is Sunil Verma, who's the partner, a team in residence and venture capital firm doing traditional VC as well as investing in token economics, blockchain and decentralized applications. Sunil, welcome to theCUBE. Thank you. So I got to get to your perspective because you guys have done a lot of high profile deals on the venture side, Slack, Instacart, and a slew of others, great portfolio. But you guys are also got your eye on the prize on the token economics. So explain the strategy of the investment thesis. Is it still venture all in on token mix? What's the makeup of the firm? What are you guys doing? Yeah, for sure. It's definitely a combination of both. We really feel there's opportunity in the decentralized world and we're really looking at sort of the white spaces there. So what is the LinkedIn of blockchain look like? What does the Amazon of blockchain look like? So those are the things that we're trying to solve for. But at the same time, we're really looking at companies that have the governance and the accountability and transparency that blockchain really locks today. And that's really what we're investing in. So if there's a token or tokenomic that we really appreciate and really understand, we'll be participating. That's good stuff. I want to ask you kind of the question and that's the classic Silicon Valley metaphor, but I want to put it in context of the venture architecture. How do you architect the venture in this new world? So the minimum viable product or MVP, minimum viable, MVV, minimum viable venture architecture. What do you look for? You mentioned governance. We hear consensus. We hear transparency. We hear open source. We're seeing a new venture architecture emerging. It's not your grandfather's classic VC deal, which is team, team, team, patent to technology. Things are running much faster, running hotter. It's a moving trend at the technology, the plumbing level. But the business models, as you mentioned, are pretty clear on some of them. What is the minimum viable architecture of a venture look like? Yeah, that's a really good question. I think when we were looking at traditional venture companies, I think team technology, the financials, product market fit, all those things still apply in a big way here. And really what we're banking and kind of what we're looking at is how responsible is the team itself? I think over the last sort of 12 months, we've seen folks go out and raise really big amounts of capital with no product roadmap, no business development roadmap, no real way to get from zero to X. And now really what we're focusing on is, is there a product that's already been built? Do they really understand tokenomics? Are they trying to shoe-borne a regular business onto the blockchain? And just assume that by adding crypto at the end of toilet paper, they're going to get something. So I think that's stuff that we have our red flags up on. I want to get your reaction to a comment I made earlier on theCUBE, but also this event. There's three types of profile startups that we see on getting your reaction is, one, the startup. We have an idea, it's going to be blockchain enabled, good vision, white paper, check. Maybe some VC might want it, but it's more token. And then the other in the spectrum is that I call the, oh shit, we're going out of business. Call that a pivot. They throw the Hail Mary. And then the middle one is the growth company that's growing with token economics. All the elements are in place for a real go-to-market. What's your reaction to that? Do you see that something similar and how do you identify each one the role that you might play as an investor in that? No, for sure. I think when we come at it, we're looking at it from a full stack experience. So does the company need resources on blockchain developers? Does the company need product and marketing support? Do they need PD support? And once you've actually gone live, one of the things that we're starting to realize now is you have to really approach this from both a PR standpoint as well as the IR standpoint. And you really have to sort of divorce what the company and what the employees are thinking about and what the investors really want. And it's really about, for a lot of the protocols out there, it's really about the next sort of 15 to 24 months and really getting the exposure that they need. But from the early stages, it is about the white paper. It is about the technology. It is about making sure you're thinking about it in the right way. And so you just got to be cognizant of what you're saying. It's early stage, they're going to have self-awareness to know that they got some work to do to build it out. Exactly, exactly. And then the growth is, where's the growth elements? Yeah, exactly. All right, so I want to get your reaction to the utility token versus security token. Obviously, a lot of people say, hey, I got a utility token. And then basically raise money without a product. That's essentially, no, there's no utility yet. There's no product. And people were trying to shortcut that, which is really not an optimized experience because you've rushed the product to market. In some cases it takes a year to get there. So essentially the SEC is kind of signaled against that. So as an investor, how do you decide what's the best avenue, security token or utility token? And why in each case would you go for either one? Yeah, no, that's a great question. I think it comes down to where they actually domiciled, where they being, and where are the customer base, right? In all honesty, the center of gravity for blockchain has shifted away from Silicon Valley. It's not Silicon Valley itself. It definitely is around sort of the Asia marketplace. And when we look at sort of the SEC and some of the stuff that they're kind of saying, that's great, no problem. I think we definitely need those checks and balances in place. We're investing in security tokens. That's not a problem for us. That's something that we do all day long, no problem. As far as you know. Yeah, as far as we understand. Accredited investor, R&D, one dig. Yeah, so I mean, we do KYC all day long. The thing is for on the utility side, it's like, is there a utility that is broad enough that really is going to affect a billion plus people that we're actually interested in? And to your earlier point, they do have to have a product ready to go. And so we're working with folks like Orchid who have been working on their product for over a year plus. They've actually waited to do the token offering and whatnot. So those kinds of things, which is a decentralized VPN. Those kinds of things are the ones that are really exciting to us. So talk about the dynamic where a company might want to do a security token to raise some cash, and then also have a utility token for either consensus or other things. And can a company coexist with two ICOs at the same time? Have you seen that? You know, that's a really good question. And I would point you to a lot of the smaller public companies that are on the NASDAQ that are just adding crypto to their product offering and seeing huge spikes. So they have to manage both the public investors and then they've also got to manage the token offerings and token investors that are doing now. So I think they're definitely ways to do it. But at the end of the day, is the team structured correctly to manage it? And are we going to see a convergence of the pricing? I mean, you're not really going to get the same premium you will in the token markets as you will in all the public markets. Quick question on security token. What are you looking for pledged against the security? Are you okay with future revenues? Is it equity? What's your preferred? Do you care? Is there a preference? No, definitely, it's definitely equity in the company. I think, you know, depending on the stage of the company and the security token type that they're doing, you know, it's equity, might be future revenue. Sometimes it's dividends or the opportunity to get dividends. So it's a combination of a lot of this. You have a preference, you care? You know, at the end of the day, equity is always preferable. Okay, what are you looking at here? What deals have you seen here? You doing any deals here? Yeah, we do. We have a couple. One is called creator.ai. They are a decentralized content patient platform. One is iCash, which is one of the security tokens that's actually kind of out there. Another is Ponova Financial. They're actually doing a JCO, Jobs, from the Jobs Act, a token offering based on that. And they're actually going to be announcing some really big stuff that is coming up in the next week or so. I'm really just talking about the Jobs Act and how instrumental that was and how that's changed the game on NGOs and mission-driven investing, which we've been covering a lot in DC. Sonia, love to have you come down our studio in Palo Alto and talk more. Great to have you. Thanks for spending the time. Thank you. Team in residence doing a lot of hot deals on the front end of investing. You know, you get nervous at all. You worried about things these days. What's your mindset like? I mean, it's like white water rafting. You're like in the middle of the action. What's it like? No, for sure. It's exciting. It's fast paced. With the haircut over the last few days, everyone's sort of rubbing their heads right now, but at the end of the day, you have to have the stomach for it. And I think you just have to be as educated as you can. And look for new liquidity ways. And this is the key thing, new liquidities out there. Yeah, I think we're seeing a lot of new liquidity. I think Telegram is a really good example of that. I think folks that didn't want to participate in round one are now getting sort of slugs of ton tokens that are out there and they're buying it at a premium and it's all happening in the secondary market. That's awesome. With new infrastructure, new dynamics, new reimagining wealth, creation value, capture store, harnessing that value, it's changing liquidity, changing the structural of entrepreneurship. Thank you so much. This is Neil Verma. Thanks for coming on. I appreciate it. Thank you. I'm John Furrier, more live action coming here in Puerto Rico, the Cube. We'll be right back with more after this short break.