The AssetBlock Fundamentals

Essential background knowledge for the interested investor & technologist

Fresh off AssetBlock’s first AMA (ask me anything) with a global community of technologists and potential real estate investors, I am inspired to elaborate on some of the key questions that I see as fundamental to understanding the roots of AssetBlock and how we create value. For those interested, here is the link to the transcript of the AMA.

Throughout this post, I provide product and business-focused perspectives wherever possible as my roots are both in product management leadership roles and an education from Harvard Business School. I also link to relevant outside reading throughout in case you find a topic that you want to explore more deeply.

What is AssetBlock?

AssetBlock is a modern investment platform, built by an accomplished team. We offer direct access to world-class commercial real estate investments from top-performing investment partners. Our technology platform uses the blockchain to bring together the worlds of traditional investing and digital assets (i.e. cryptocurrency), allowing us to transact with lower fees, better transparency, and unparalleled efficiency.

Tell me more about the team behind AssetBlock

Starting a company is hard. If you’ve done it, you’ll know that there are a lot of highs and lows that come along with the ride. My experience on the startup rollercoaster has taught me that the best way to smooth out the peaks and valleys is to surround yourself with the right people who will ride the rails right alongside you and hold your hair when necessary after the ride. You can’t pick your family, but you can pick your team. We are:

• Early-stage company veterans with 30+ years in startup and growth companies, 10+ of those on collaborate projects
• Experienced fundraisers with over $200M in venture capital raised
• User-oriented technologists with experience building scalable products and teams at HubSpot, CarGurus, PathAI, Slalom Consulting, Intel, and Fuze
• Financially credentialed experts with accreditations such as Chartered Financial Analyst (CFA), CFP, Series 7, 63, 65, 86, and 87

All of this adds up to a team with the kind of experience and cohesion you can trust. We are committed to building quality products that serve our users and help them handle the investment process corkscrews.

Let’s discuss the product in more detail

Well-designed products not only keep users engaged, they help users become more informed to make better decisions in the future. A great product experience elicits trust and confidence. Jay Ciruolo and I have spent many years building products that not only fit this description, but have proven successful as a result of their focus on optimizing for the user’s experience. We are focused on building a platform that serves experienced real estate investors, but most importantly offers tools and resources for up-and-coming investors. Bringing a much-needed design eye to the blockchain world is necessary to driving adoption and understanding of what we believe will be the next major evolution of the web as we know it today.

Here are a few examples of what we’re doing to ease the burden of investors:

1. reducing the friction of investing by bringing together complex third-party processes into a simplified workflow (e.g. KYC/AML, diligence, purchase flows, and post-transaction portfolio analysis)
2. educating our users on the value of investing in real estate and the use of digital assets (e.g. sophisticated calculators and guides give investors a better understanding of the impact of adding our investments to their portfolios)
3. using Algorand’s blockchain, and a modern server-less infrastructure approach, to keep the security and privacy of our investors at the forefront while providing technological advantages (e.g. liquidity for investments)

Who do you partner with for your investment opportunities?

As an investment platform, we focus primarily on sourcing attractive deals for our investors. In order to maintain our deal quality standards, we’re partnering with some of the top investment firms in the country, focusing on high-potential commercial real estate assets.

Recently-announced relationships with firms like Lodging Capital Partners bring decades of experience to the AssetBlock platform with an earned reputation as both trusted advisors and operators of complex real estate holdings. To find out more about how we source and think about new opportunities, you can expect more blog posts from our resident financial strategy expert Brandon Groeger coming soon.

Who can invest in your platform and why are there limitations?

In April 2012, President Obama signed the JOBS Act into law. The JOBS Act was written to encourage small business growth and to relax securities regulations that were impeding entrepreneurship. The Fintech space took advantage of the new regulation which provided new ways for companies to raise money and include non-accredited investors to invest in assets such as startup companies, new product launches, and real estate. Importantly, these new methods were much less restrictive about advertising and promotion, which was critical for platforms to stimulate investor demand and achieve scale. Investors were exposed to a democratized set of investment options that appealed to both their desire to make independent investment decisions and provided solid portfolio diversification potential.

At AssetBlock we have structured our early deals specifically for global accredited investors. This means that we have asset and/or income requirements that need to be met in order to qualify for these investments. While this doesn’t fully address our democratization goals, it provides us with solid deal flow and investment mechanics that we will share with retail (non-accredited) investors over time.

Tell me about AssetBlock’s cryptocurrency focus

Bitcoin, inarguably the most well-known example of a digital asset, has a massive market cap and global reach. While the intricacies of how digital assets work and the blockchain technologies that they are built on could fill many volumes, the thing to focus on is that these new currencies have tangible value and holders of them want to do something with this value. If you had a pocket full of a traditional fiat currency you would buy groceries, go out to dinner, deposit them in a savings account, etc. The challenge that digital asset holders face today is that there is limited utility for digital assets outside of the basic necessities.

The evolution of digital assets and the dearth of useful ways to use them has created a prime opportunity for AssetBlock and our mission. We are focused on providing digital asset holders with attractive investment opportunities, starting with Algo holders, the digital currency of Algorand. We offer direct investment options (immediately put your cryptocurrency to work) and leveraged options (hold onto your cryptocurrency, but pledge it as collateral for a loan). The combination is attracting a global set of digital asset holders to our platform. Investors are seeking the ability to diversify their digital asset holdings with tangible real estate securities instead of being forced to diversity with other cryptocurrencies that are by nature strongly correlated. Investors can expect AssetBlock to continue to innovate for our digital asset holders as we see strong demand and growth.

Beyond the financial benefits to digital asset holders, AssetBlock’s use of Algorand’s blockchain provides benefits to all investors. Each investment can be represented digitally. These digital securities can be immutably linked to key property documents, a transparent and verified transaction history, and secure proof of ownership. This combination can provide our investors with liquidity options that don’t exist in traditional real estate, transparency to critical transaction data, and the enhanced security inherent in the leading blockchain technology provided by Algorand.

That all makes sense, but what are the investment mechanics like?

After being granted access to AssetBlock, our users complete KYC/AML checks as well as accredited investor verification processes. We accept domestic and global investors. From there, investors browse our available investment options (U.S. commercial real estate), perform due diligence, and pick one or more properties to invest in. Our platform helps investors navigate their funding options (cash, pay with Algos, leverage their cryptocurrency, etc.) and we facilitate the necessary transactions with investors. In return for the funding, investors receive both a paper-based representation of their ownership as well as a digital version of their ownership, better known in the blockchain world as as token. Investors are subject to lock-up periods (varies by deal) before they can seek liquidity from a secondary market, though typical investors desire to hold for many years.

Thanks for reading. I will address further questions in subsequent posts and share more product specifics as well. If you’re interested in learning more about AssetBlock, we invite you to become an investor, partner, or to contact us for more details.