On July 9th, CityBlock Capital opens early access to our first tokenized venture fund, NYCQ. We believe we’re at the start of something very exciting, and want to share a high-level overview to help prospective investors understand the fund.
The NYCQ fund will focus on the strengths of the city that inspired it, investing in early-stage startups at the intersection of blockchain and Wall Street. NYCQ is the first of a series of funds from CityBlock that will combine security token technology with low minimums and early liquidity opportunities to give investors around the world unprecedented access to hands-on investment expertise in thriving startup ecosystems.
Schedule: The NYCQ presale will run from July 9th to September 15th, and investors joining during that period will be eligible for a 25% token bonus. NYCQ will accept investments in Bitcoin (BTC), Ether (ETH), and USD, and we expect tokens will be issued on or before December 15th, 2018.
The $NYCQ Offering
Fund Size and Minimums: We’ve decided to cap the NYCQ fund at $10 million. By keeping NYCQ small, we are able to take advantage of recent changes in the regulatory environment that allow us to truly democratize access to venture capital for CityBlock community members. We’re excited to have a large pool of investors, in part because we aim to build a community that advocates for NYCQ and its portfolio companies.
Investor Community: In addition to up to 250 accredited U.S. investors, we will be able to accept up to 500 unaccredited investors from outside the U.S., and up to 2,000 total investors, inclusive of international investors who qualify as accredited by US standards.
Lockups: NYCQ investors will have extraordinary flexibility after the initial fundraising period to seek liquidity as needed. NYCQ’s token lockup ends just 365 days after issuance of tokens for U.S. investors, and just 45 days for international investors, instead of the 8 to 10 years that is common for most venture capital funds.
NYCQ’s large pool of investors, short lockups, and low minimums, along with its token offering, will support CityBlock’s major strategic goal of creating an active secondary market for tokenized securities.
The $NYCQ Strategy
Thesis and Objective: New York City is the world’s financial capital, and the NYCQ fund will focus on the next generation of financial technology — blockchain and security tokens. Trade in digital assets has already shown huge growth among consumers, captured by U.S. exchanges such as Coinbase and Poloniex. The creation and trading of security tokens requires different regulatory and technical approaches, but, we believe, will be the leading driver of crypto growth over the next 5 years.
NYCQ will invest in companies that are building the framework for the emerging security token ecosystem — a picks-and-shovels strategy. Our investment objective is to achieve long-term capital appreciation for our community through equity and equity-related investments in early-stage technology companies.
$NYCQ Investment Partners
CityBlock Capital is using tokenization to create global access to top-tier venture capital investments, and each of our city-focused funds will be guided by proven domain experts (Read more about CityBlock’s company vision). In New York, we’ve brought together four partners to add to our core investment team, each with specific strengths and insights, to form a dream team of hard-nosed builders focused on creating real value, not short-term hype. That’s the ethos that drives them — and for good measure, CityBlock’s general partners and NYCQ investment partners are incentivized with shared carried interest on investments.
Future-Proof Vision: Nikhil Kalghatgi — Founder and Partner, CoVenture Crypto
The CityBlock Team was introduced to Nikhil and the rest of the CoVenture team by our advisor Anthony Pompliano. His background and intellect — including both a Harvard MBA and time in U.S. military intelligence — were instantly magnetic. Over the last decade, Nikhil has honed his skills as a Partner at Vast Ventures and Principal at SoftBank Capital. These firms invested in dozens of technology, digital, and biotech projects including Hyperloop One, Planetary Resources, Recombine and Ginkgo Bioworks. Nikhil comments on crypto and technology for CNBC and Bloomberg TV, and lectures at Stanford Graduate School of Business.
As we got to know Nikhil, we learned just how broad and bold his vision is. Nikhil has described his investment style as “moonshot investing,” a commitment to long-term transformative possibilities that has led to investments in asteroid mining and bioengineering. That same spirit of transformation led him to found CoVenture Crypto, which is helping build key components of tokenized finance, including a cryptocurrency index fund designed to make it easy for more traditional investors to gain exposure to top digital assets, and backed by partners including SoftBank.
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Trading Expertise: Ateet Ahluwalia — Managing Director, CoVenture Crypto
To invest wisely in the future of financial technology, it pays to know the present inside and out — and Ateet Ahluwalia is NYCQ’s expert trader, with a relentless focus on quantitative precision. Ateet has traded at some of the most prestigious desks in the world, including Barclays, Goldman Sachs and Bluecrest Capital. At Goldman, Ateet was a Credit Index Trader and guided European credit trading strategy through the global financial crisis and subsequent Eurozone crisis. It was Ateet’s attention to quantitative detail that first helped him see the power of cryptocurrency. While working on global macro trades during the 2013 Cypriot banking crisis, he noticed Bitcoin correlating to the crisis as capital sought a new safe haven — an early hint of the true potential of blockchain technology in the financial market. He’s followed that insight since, and is now Managing Director at CoVenture Crypto and Portfolio Manager for CoVenture’s Active Crypto Fund. He is also a pioneer in developing and advocating for a quantitative approach to crypto trading, including highlighting the need for better data.
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Community Leadership: Rob Paone — Partnerships, AirSwap
Rob Paone is better known as Crypto Bobby, one of the most level-headed and influential thought leaders in blockchain and cryptocurrency investing. Though he began his career with enterprise software at giants like Oracle and LinkedIn, his passion for cryptocurrency helped him found a YouTube channel with an audience of 150,000 subscribers eager for his insights on crypto markets and the blockchain industry.
Rob is also influential behind the scenes, advising large companies and institutions on asset tokenization at AirSwap. AirSwap’s peer to peer, Ethereum-based trading technology is part of the movement towards a digital asset ecosystem.
Decentralized Engineering Prowess: Don Mosites — Co-Founder, AirSwap
No technology fund — especially one focused on blockchain — can succeed without deep technical insight. Don Mosites is a full-stack engineer and product designer with over a decade of experience building everything from social games to advertising technology for companies including Google and Zynga.
Don has also become a major advocate for asset tokenization as co-founder of AirSwap. AirSwap, which facilitates a peer to peer trading network for ERC20 tokens, saw $1 million in trades in its first 24 hours in operation. Don holds Bachelors and Masters degrees in Information Systems Management from Carnegie Mellon University, and is an inventor on several patents connecting gaming and digital commerce.
NYCQ’s local partners, along with the experienced venture capitalists at the helm of CityBlock, will work together to source dealflow in the most promising early-stage companies building the future of tokenized finance and digital asset trading. We believe that our team has a balanced portfolio of vital strengths: decades of collective experience without hidebound thinking, and deep passion for the blockchain rooted in real expertise, not hype. There is no formula for guaranteed success in venture capital, but we believe we’ve put the odds in our favor.
Much more information about the fund is available in the NYCQ investment presentation, Private Placement Memorandum, and subscription agreement. To review those documents, please go to cityblockcapital.com and request an allocation in the NYCQ fund.
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