Welcoming Rubicon to the Genesis Portfolio
On behalf of Genesis, I’m excited to announce our investment in Rubicon. Rubicon is an Ethereum based protocol that enables efficient and secure peer-to-peer transactions of digital securities and assets.
— Anuj Jajoo (Venture Partner), Inara Haque, Alex Liu, and Noah Penny
DeFi, or decentralized finance, is the group of cryptocurrency and blockchain-based solutions to the intermediary problem endemic to traditional finance. Through smart contracts, DeFi enables capital transfer in a secure and trustable way without a centralized overseer or administrator with executive authority. The Rubicon protocol is an open-order book marketplace for any security, with a vision of including publicly tradable equity of currently private and often early-stage companies.
The Problem
The legacy financial system. Capital markets today are still inaccessible for most people by various levels of fees, status requirements, and time-based restrictions. This extends to private and early stage companies, who must go through several rounds of approval and advisory to trade publicly.
Currently, there are platforms that allow for private companies to be exempt from the traditional registration offering requirements with the SEC and allow them to list their shares in the primary market and maintain private status through a “mini-IPO” process, formally called the Regulation A securities offering. However, these private companies cannot promise liquidity because there is no secondary market, thus making it more difficult to gain the support of investors and secure funding. In short, public access to private markets has become legal, but no infrastructure yet exists to truly facilitate it. Rubicon hopes to change this.
The Founders
Rubicon was founded by Benjamin Hughes and Forrest Norwood, two McCombs undergraduate finance majors with significant firsthand experience in traditional finance through coursework and internships across investment banking, trading, and equity research. In early 2020, they individually began to more seriously learn about DeFi and started learning Solidity, connecting over a shared enthusiasm for crypto. They quickly realized the equity exchange problem was still unsolved and have since been building Rubicon, which started with this whitepaper.
Benjamin Hughes — CEO, cofounder — Ben is a UT ’21 graduate of the McCombs Canfield Business Honors program, where he majored in finance and previously interned in investment banking at Cain Brothers. He built Rubicon’s MVP as the main Solidity developer and also leads strategy, fundraising, and team management.
Forrest Norwood — COO, cofounder — Forrest is a UT ’21 graduate of McCombs, where he majored in finance and previously interned in commodity trading at Musket. Alongside helping with product and strategy, he is responsible for navigating and understanding Rubicon’s regulatory landscape, including compliance.
How’re They Doing?
Team Rubicon has been building in public for an exciting summer 2021 mainnet launch. Currently, you can test the beta on the Optimism Kovan testnet, with a one-click process if you have a MetaMask wallet. Since receiving Genesis funding, Rubicon has also recruited full-time engineer Otavio Madalosso, and they are actively hiring for more roles. You can follow them on Twitter and join their Discord to get the latest on new testnets, contract features, and what they’re excited about with layer 2.
Why I Led This Deal by Anuj Jajoo, Venture Partner
Rubicon is aiming for large-scale disruption in the institutionalized industry of capital markets. For such a large goal, the founders have correctly identified approachable entry markets in regulation-A securities and the vibrant Ethereum developer space. The founders Ben and Forrest have also been a joy to work with and learn from; this was my first deal in the DeFi space, and their clear passion for democratizing capital markets persisted through every conversation, manifesting in significant technical product traction just along the course of diligence. There are also enormous tailwinds for retail-friendly Ethereum projects like Rubicon, which combine the underlying blockchain technology with a direct use case (private equity liquidity). I am excited to watch and help this team build the future of finance.
Anuj Jajoo is a Venture Partner and the Portfolio Management Lead at Genesis, UT Austin’s startup fund.
