ETHKL24 | Panel | Raising Funds in Web3

so we got to keep things moving right now we're running a bit behind time uh up next we have a panel about raising funds in wet tree can we invite on stage darl Lim from trive digital Ben Beerman from auran ug Nicholas Chong from pitchin and our moderator no Lee from lydian labs also just lead up to our main event at 510 where we have a live Q&A with metalic butterin uh we asked that if you guys are having questions for that live Q&A to keep them short within 30 seconds if your question is longer than 30 seconds I will cut you off okay so prepare short questions for the 510 Q&A Noel please take it away thank you hello hello ladies and gentlemen good morning aaaba oh everyone is so serious is it this topic is too serious for everybody so I think today um we are talking about um raising funds in web Tre I think that is one of the key challenge or a key issue that all the projects Founders in web tree are currently very very focusing on and try to like seek funding across the world so today we will um have our discussion around what is the fundamental difference between raising fund from web to and also web three what are the different ways of doing it and also we will talk about challenges that we have right now in Southeast Asia and also some of the key takeaways that our panel is today for all our project Founders so let's start with a short and brief introduction from all the panelists welcome Benedict hi thank you for having me so hi everyone I'm Ben I'm coming in from Germany but I'm predominantly affiliated with right Guild Dow uh which is essentially like a a mercenary shop uh for web 3 development um but we're also having a couple of uh European Ventures we looking at connecting um web 2 and web 3 uh through digital wallets um in Malta but also in Germany and now we're looking into southeast Asia um to see what's happening here because I feel like a lot of interesting stuff is happening thank you Ben how about Daryl uh y so I'm Daryl I'm the general partner at Tri digital we are actually a Singapore licensed fund manager uh traditionally we've been investing in web 2 but uh we started a web 3 division this year um and of course a fun fact we've invested in a uh Central centralized exchange here in Malaysia tokenized um exchange itself but the headquarter in Singapore um and of course we invest in preed C stage startups um you know ticket size SI ranges from 50 to 250k yeah thank you Daryl and Nicholas all right hi everyone um Nicholas from pitchin uh so pitchin is basically a regulated launch pad uh we have regulated and Incorporated in Malaysia um we we started off uh 9 years ago very traditional doing uh private Market fundraising um helping companies to raise funds using private market shares uh the private Equity um this year we launch our new product two new product we launched a secondary market for private market shares and also our token launch pad which is also regulated uh product um so we help companies to raise funds uh using equity and also tokens uh tokens can range from utility tokens all the way to security tokens thank you Nicholas and um hi everyone I'm Noel from Lan Labs um we are incubator C marketing agency focus on advisory 10 marketing and we do hyper localized Mar marketing across the whole aack plus China regions so thank you panelist for being here today so let's dive into the first questions um can you guys give us a brief like comparison between different ways of raising fund like compare IPOs to different ways of raising Fund in web tree we have Launchpad we have um IO we have um Ido Ico different styles so maybe start with Benedict do you see is there like a very huge difference or is it only on the timeline or method or anything that you want to raise specifically in terms of the comparison yeah thank you for the question now when we look at the web to landscape it's either very very short Cycles so you have like a disruptive technology a disruptive solution that well gets you to the market um to the capital markets really quickly um or you have really a long cycle so it's it's very decisive it's very clear so the path way that you take as a Founder um should be said in the beginning so you're participating in an accelerator you're participating because spinning something out of a university and then it's very clear which path to take whereas web 3 is a lot more ambiguous so you can survive a lot longer on Grand funds so you you don't fail as quickly as in web to but also you can race in new ways in new modes so for example there's something called AER um which is basically a dow based fundraising where people or investors can withdraw their funds at any time if they do not have conviction anymore in your um solution or in your product that you're trying to sell so I would say web 3 offers a lot more color uh compared to traditional fundraising thank you Ben so I have actually another question for daro do you see that the current web trade fundraising is more dgen like how is the DU diligence process or is actually just based on the networking effect that people have around to actually EAS their fundraising process so how does it um go in the Venture Capital World um I think when it comes to fundraising itself um you know to a point of how stringent the process is we have seen Evolutions um you know in terms of the process Wise from last cycle to date uh I mean if you guys know the 2021 days you can uh simply race around uh oh no not even that there has been in conferences that I've attended where valuation jumps within uh overnight actually overnight valuation jump that that was the most insane thing I've ever seen during 2021 but now you wouldn't see that um if you actually are fundraising or have been fundraising you would realize that the uh majority of the current um web 3pcs they actually you know ask for a lot more uh information as part of the due Deliverance process right we start diving down into okay you know what look at incorporations we look at who your previous investors we we check those documents are signed transactions have been sent um we look at if there's any IP itself um we look into the team biographies background checks on them um so I would say that right now it's a bit more mature uh compared to before and I think you know the days of just simply doing a Saft um is over I'm not saying that it's completely off the table I'm just saying that we are seeing more deals where you see um safe and warrants uh or safe convertibles uh being done more often than it's just um token deals alone so I would say that it's it's definitely more um um you know stringent compared uh to before yeah yeah thank you darl I think back in the 2017 2018 people can just raise a lot of fund just through white paper but today it's not longer in the La La Land so everyone needs to be bear about it and be aware of it and actually have a great preparation ahead so next up we have um Nicholas from PGN and also with the X regulator background do you think that regulation is one of the kind of like key um hurdles for people during the fundraising stage and is there any um different or like interesting way that people can actually raise fund through web Tre with the current landscape you have that we have in Malaysia well honest answer I I shouldn't say this because I'm regulated but the honest answer is yes I think regulations always creates impediments um but of course it's it's a double edged sword uh as well um so I think um as the industry mature um I think um there will be we expect more people to come into the space that include the mass Market which may uh not be as well vered uh as um you know uh the djans are um and I think often times I think when regulations comes in is really to protect that segment um and and speaking a I just to touch a little bit on on regulations uh so I I feel that regulations uh so we are a regulated Launchpad um and essentially what's important when it comes to raising funds at least to the masses um is actually balls down to just um two to three things um and and that's essentially what the core of the regulations that we are following and and what we do I think number one is I think in anywhere in the world this is something not just in fundraising but all uh even digital asset exchanges is AML risk you want to make sure that um you know you are you are helping your issuers you're helping the investors to manage uh uh funds that are coming in and uh being transacted within the platform so that they don't not exposed to AML risk um so that's one of the key part of regulations second part which I think is the most most important one and and the part that um still needs a bit of figuring out is really just reliable information making sure that information that is given out to the public um to retail investors they can be relied upon um and that's really a call part of what we do um I think similar to to what uh VCS do because VC they have a very strong team to to do due diligence to make sure everything is fact checked and things like that but when it comes to retail that's where um platforms like us we are relied upon to make sure to do the due diligence on behalf of retail investors um so that at least when they get the white paper they get the term sheets they know that these things are are actually properly checked the company can actually uh deliver it so I think I think I think um to answer your question right it's really a double edge SW regulations does create some impediment because it does make uh time to Market much lower um and it's it's quite bad when it comes to uh um comparing it with you know the speed of which people are doing it un rated waste but it also helps to get the retail the the masses to come in much earlier um so that that's uh my take on regulation your second uh question Noel I think it's about what are some of the unique ways that uh that we can do fundraising over here in Malaysia so I think for for us we have a very unique business model in Malaysia so we are a regulated Launchpad that also does utility token right I I don't think you see that model um very often um I think we are probably the one of if not the only um regulated utility token launch pad uh in the world um I wouldn't say the only one I I think there could be a few more but we are one of the few and I think because of that we do see a very interesting use cases you interesting markets um I think especially number one is being able to get um web to companies uh to be able to uh launch their project in a safe and more controlled Manner and we do have a lot of interest um uh in this space so I think I think that's number one we do have a lot of web to companies that's trying to launch their own Community project right U being able to Launch a project for their app the community that they have already built in order to S of engage them a bit more so we we uh we just closed one deal uh two months ago about 2 million USD just specifically for that it's a web to prop tech company launching a a project for their own Community um so that's one interesting thing due to the uniqueness of Malaysia regulations that we we can provide um and a second thing is um and this is more towards our vision as well is um because we are regulated uh utility token Launchpad um we we sort of have the permission and also have the have that uh that sort of credibility to get retail investors onto good projects much earlier because often times when it comes to access to project uh token launchers retail typically come in much later during the Project Life Cycle when it's close to um getting listed on on the exchange um it's more practical issues and also regulatory issues because if you structur it to um uh at much earlier stage in most countries it's a security and you know that goes into a lot of regulary concerns and number two is accessibility uh because it's just very hard to reach out to retail but because in Malaysia it's it's very clear cut um projects can come to us at the earlier stage a strategic round for example and they can actually structure a deal where VCS and Retail can actually you know invest together at the same round so I mean just to highlight two two interesting um uh points and maybe a third one just one thing to uh cover as well um and this because P we do it uh we do both the equity side and token side so we also working with companies to structure um deals that covers both Spectrum like what Daryl SE saying earlier um potentially Equity um or or safe uh note with a token warrant um and and offering that to the the mass Market thank you Nicholas from the in for the Insight of of the current landscape that we have in Malaysia so we do actually have a strong or merch uh framework that we have for Malaysia so everybody do check out so I think we um let's jump into the next questions so for the previous two cycles I think wec are um keep looking at projects are coming out from the west but during or since like two years ago or even like this year is more obvious that many people that feel that the Innovation actually come from the Asia and in terms of um user acquisition or even projects idea liquidity are actually centralized in Asia as well so I would love to ask the panelists here what are the kind of like key areas or any vertical that are actually interesting that or busy or even investors are actually focusing right now to search from the southeast Asia let's start with V yeah um maybe to draw uh from your intro it is indeed true that we saw a lot of liquidity um and investment like pipelines opening up like in Southeast Asia even for Western projects now uh from my personal perspective like things like deepin um things that are resilient things that look at connecting real world assets with um the digital real and and B three are are the bus words um of this cycle um not so much nfts um as we saw previously thank you Ben how about darl uh I think there's several points to your question I think one is how we've seen um in terms of I would say liquidity or even talent wise we do see a lot of um Western projects receiving more liquidity um and I would like to say that westerners is really great talking right but what we have identified as well is on the Eastern side in Asia you see actually Innovation from a techn technology perspective you'd be surprised that actually um a majority of the good Tech uh companies in blockchain are actually in in Asia itself um and of course um when it comes down to um what we're looking at or or what's next itself the way we break it down is based on our thesis right so for blockchain infrastructure what is the current technological gaps uh one of things I look at is of course um FHS of like fully homomorphic encryption um of course you know other thesis that we have is entertainment that we look into Mass adoption and of course for finance you know it targets the liquidity fragmentation issue so that's kind of like what we have as a broad thesis itself but the thing is things are constantly changing right I mean every six months to a year you know we see how things have you know come up and go similar to like you know examples of like you know the DP narrative the AI narrative the rwa narratives so these things come and going right so so as VCS itself what our job is like we do have a core thesis at hand but underlying Trend that we kind of monitor um you know on a biannual basis um we kind of change it you know every single time because of course um we are also working with other investors um to was a CO invest and the honest truth is that everybody or most people do look to writing the wave itself right and of course you know as project Founders that's something you you'll have to do thank you Daryl and insight from Nicholas um yes uh thanks so I I think I think um so I probably take a different I think uh I think panelist covered more sort of gamechanging items you know I and I do agree right if you if you're building something that is solving a real problem um whether it's a dpin or infra um or ZK that's solving a real problem I think that's definitely going to be a market going to be investors looking for it you just need to be able to to tap into that I'll take a different spin coming from a more um more localized approach from from what I'm seeing on the ground um and also from what we are doing which is to link to the Mass market and also uh uh traditional investors for me I think I think three three things I want to highlight um so one is really um I think yes I think when it comes to the whole whole idea of of uh blockchain decentralized systems I think uh there are a lot of amazing things that's been built to get there um but also taking taking example of how for example NASA as they were trying to build um uh build a solution to go to space they've created a lot of interesting applications that has seen Commercial Success velcro for example microwave for example are examples of how there are spillover technologies that have seen commercial success I think I think as we as we set foot towards that uh that idealistic Vision there are a lot of very interesting applications that a lot of the more traditional players have started to adopt and and that's why we have tokenization coming about you know TR fight coming into this space um and and we also seen corporates coming to the space so I feel that is one one angle that from from more localized perspective is not g game changing per se but there is a huge market for that um and and and I think projects that's being able that will be able to bridge between um this this Innovative uh um soft uh Innovations with uh real world use cases uh web to that uh companies that have already their own traction I think that would be very very um very useful I think I'll just leave it at that uh cognition of time pass it back to you Noel no worries no worries so I was warned by the MC that we have to into the last question when it's five minutes left so let's um dive into the most um I think practical questions that I would love to hear from panelists giving advises um to all the project Founders here what are the things that they should avoid of doing when they approach the investors or what are the steps that they should do before they go to the investors so let's start with Ben thank you um and one of my co-panelist might not like my answer but I would advise to wait as long as possible so like what we've seen is let's take the example of of bit Dow or mental um they've come up with like a scout program where they um create like a grand like Grand distribution scheme so that you can actually get a lot of traction you can build up your project so that when you actually approaching investors you have uh consumers you have customers you have some traction you have something to show for and of course you have a larger valuation so it's much easier to negotiate um to you know make it work both for you but also for the investor then um that you want to try to get on board so really just make sure that you get traction and that you grow your project in a way that that is Meaningful before you're SE out um external capital for me uh if I could give one advice to Founders is don't lie we will find out especially due diligence especially raising from license fund manager please do not lie um we have come across situations where projects have claimed they raised from X Y and Z and uh when we do the due d check didn't happen at all right and and you have to understand that the VC world is very small everyone talks to everyone right because we want to reference check on why certain VC pass around or accepted around you know what's their what's their Theses behind it as well but but you know the thing is don't ever lie about anything you have because eventually people find out people talk um I think when it comes to fundraising advice is one thing I always share is um this why be kind of intive because you know obviously it's it's it's against me but always also you know do a a reference check or a check on your VC itself a lot of VCS will claim that they are strategic most of them aren't um we actually do provide a lot of value right and that's why one of the first thing we always tell Founders is go and ask other Founders about us especially your portfolio and see the kind of value they're bring to the table and that you know goes back uh you know to the project Founders itself is if you want to really find someone that's you know um able to support you you need to find out who else have this you know who else have they supported before so at least you know you know when they claim what they claim is true thank you Daryl Nicholas yeah so um I I I do Echo I think especially the part on timing um I think timing is definitely very important um I mean you you you could you could always do ra fundraising when you have a piece of paper and idea but there's not much leverage uh not much traction you can show it it it you may want to be considered whether it's it's the best for you right um so so that's number one um I I really Echo that sentiment a lot um applies to any investors right if um like if you are going in with a piece of paper the valuation and and the price that investors are expecting is going to be very much different when as compared as if you to go in with uh a product that you can show or actual users that are using your app so so that that's very important I think second thing is also um probably a more practical advice is also don't don't grow your team too fast um I think uh I think keep it lean so that you can manage your your operations cost uh and um especially if you are still uh trying to go to your Market or trying to actually get your first uh first first business so I think this these are two that I would like to share thanks thank you all the panelists so I think for all project Founders um don't rush don't light and always um timeing right so I think fundraising is difficult for some people but for some people not but after fundraising there are also a lot of steps that you actually need a lot of strategic um value that coming over from all the investors that you have so you do need to um check or select the investor properly that can actually help you in the long run as well so I think um that's goes our panel discussion and maybe we can jump on to the Q&A sessions uh okay uh thank you very much actually there is no Q&A session unfortunately yeah we are running really short on time right now um guys darl uh Ben Nicholas thank you so much for your insights Nicholas I need to take a closer look at your socks later um Noel thank you thank you so much for sticking to your time ladies and gentlemen another round of applause for our panelist thank you