My Crypto Year in Review as a CEO
Bitfineon CEO Jared Grey about being a CEO in crypto
It's hard to believe we're a month away from 2020. I am only now getting used to jotting down the year correctly when I have to write the date on a document. Unfortunately, all that memory training will have been for naught as we enter the new year and the process begins again. Sigh. While lamenting this tragedy, it occurred to me that this year has included some of my professional career's most trying and rewarding times. Most of my past business experience consists of private consulting and almost zero social media involvement. However, the crypto industry's lifeblood is social media; whether it's Twitter, Discord, or Reddit, you need to be involved in one or more platforms daily. Social media is powerful, and it took me time to understand and acclimate to its influence in crypto.
My year started on a somber note in Jan. As CEO of Bitfineon GmbH; I am responsible for the company's direction and execution of its product roadmap. One key role Bitfineon provides is the core development of the ALQO [ticker: XLQ] cryptocurrency. Unfortunately, at the end of 2018, our team experienced several setbacks exacerbated by the market downturn. In addition, it caused the depreciation of the value of our dev fund, the primary source of our funding at that time. Long-time community members are aware of most of the setbacks, which include Bitfineon's development delays, team member turnover, and more. However, these setbacks were minor compared to the problems we would face in 2019.
In Dec 2018, it became clear the developer fund would no longer support business operations for Bitfineon and ALQO, and the decision was made to seek funding via an equity sale in the company. During the last few weeks of Dec, we were approached by a top fund to invest, and their requests were standard, a product code, and a financial audit. This sudden interest seemed tremendous, and we requested our lead developer (Kevin Collmer) to make code available for several products. In addition, I was to provide a financial audit and our business plan. What happened next became a siren call as we went from a potential funding partner to the next… Kevin failed to deliver any code for any product that wasn't publicly available. This massively hindered our attempts at securing funding and put considerable strain on my business relationship with Kevin.
When negotiations produced a positive response, I flew to Germany to support Kevin. My presence in Germany was to help him ready the code for audit and give it to the interested parties for review. During this time, the fund was in talks to purchase an established exchange's user base, and they wanted to re-brand it to Bitfineon, provide us funding, and re-launch immediately. Unfortunately, while I was in Germany, it became clear that we would be unable to deliver on the contingency of the code audit, and the deal stalled and ultimately failed. What happened next is worse…
Towards the end of my Germany visit in Jan, we began receiving messages from community members that their Liberio accounts had been compromised. Liberio was an online wallet that we released under the development oversight of Kevin [Collmer], our lead developer. I was in a panic… I immediately requested that Kevin review the platform and address the community as to his findings. I know that brand integrity and trust are paramount in any industry. Still, in crypto, losing confidence in your brand can be an absolute death knell. And, if you have issues, you must fully disclose them to your community and the crypto public and make right on them. Kevin informed me he would review the platform and issue a public response. Unfortunately, he released a half-baked attempt to reassure the community that the platform was safe. He suggested users had experienced brute-forced entry into their accounts, and he instituted 2FA for Liberio accounts, and business went ahead as usual.
Ultimately this was not the case, as later in 2019, we were able to confirm that the unauthorized access was most likely Kevin accessing user accounts on the Liberio platform, draining them of their XLQ, liquidating them via Crypto-Bridge, and withdrawing the funds for himself. (Side note: any affected users should join our Discord and claim any loss associated with unauthorized access to their Liberio account, Discord link: https://discord.gg/TbJdXFs). I can't begin to explain how disappointed I was with Kevin, as working closely with someone for a year-plus and having them lie to your face will, at minimum, make you question your judge of character and, at worse, make you feel like a fool. C'est la vie…
Back to funding, in January '19 as a search for a funding partner meandered through the spring months with little fanfare, as the market's bearish outlook likely impacted overall industry investment. I traveled back and forth to Europe to meet with investors, fielded dozens of email inquiries, and executed at least the same amount of video and conference calls. I obsessed over our business plan for Bitfineon and ALQO. I wanted it to surpass the industry standard, as I researched industry examples from other successful pitch decks and business plans. This obsessive preparation slowly began to materialize into more fruitful leads.
One of the most promising leads led to a meeting with potential investors in Milan, IT. Again, mirroring the process with the investors in Jan, we seemed to be headed to a fruitful outcome; ultimately, the deal collapsed at the signing table after several weeks of talks and meetings. It was a humbling experience. I remember walking out of the Four Seasons in downtown Milan, stunned. Only moments prior, we were on cloud nine, with the deal moments away from completion, when we were told, "we've decided not to meet your terms…". The investors walked from the table at the last minute due to concessions we previously agreed would be in our favor, which they ultimately rescinded. After the failed meeting in Milan, we returned to Germany to continue with the funding search.
Fast forward to June, and with what I believe was the result of a positive and bullish market outlook, we began to receive more funding inquiries. Over two weeks, I spoke with 4 of the most promising leads, which had materialized to date. From those leads came a group of individuals who had been invested in ALQO for some time. Ultimately they were interested in continuing with our original vision in our product roadmap. And they were located in the US, which was a welcome change for me; traveling had begun to wear on my resolve a bit. After speaking with the group, they would later form the investment fund BIG Fintech, LP. We agreed to preliminary terms and began the process of due diligence.
After a successful round of virtual meetings and an investor dinner in Orlando, FL, the terms of the deal were agreed upon, and we executed the equity sale for 1M EUR to BIG Fintech, LP. In retrospect, this is one of the greatest single moments of my professional career. It's a moment I share with ALQO supporters, who provided support and encouragement over the preceding months providing me the resolve to continue our search. It was a turning point in my attitude and outlook for the project. The successful funding round provided validation our project had intrinsic value and that people believed in us to execute our vision. The dichotomy of the two situations, the successful investor dinner, and the failed Milan dinner, were not lost on me. It was one of those quintessential "when we look back on this, we'll laugh" moments, almost entirely scripted as if a movie plot.
In summation [the tl:dr version] looks something like this:
1) We need funding.
2) Liberio is hacked.
3) We lose funding multiple times.
4) We receive funding.
5) We're accused of exit scamming.
6) I fire my lead developer and business partner.
7) We rebuild the ALQO team.
8) We prepare a swap to a new chain.
9) Bitfineon is readied for launch.
What. A. Year!
My best to all that believe in us, your support means a lot to me personally. 2019 is nearly in the books. Here's to a successful 2020!
Jared
