Former IBM member: “coronavirus causes investors to suffer economic uncertainty”

The Cryptonomist had the chance to interview Heinrich Zetlmayer, founder of Blockchain Valley Ventures and former member of IBM to talk about his work in the advisory company and the impact of Coronavirus emergency in the industry.

Could you introduce Blockchain Valley Ventures to our readers, what do you do and what is your mission?

Blockchain Valley Ventures (BVV) is a leading company in the blockchain and fintech space, covering advisory, corporate finance, and venture capital with offices in Zug & Zurich, San Francisco, and Singapore. BVV is part of Draper Venture Network, the active association of independent VCs that joined forces to share deal flow, access to capital, and corporate introductions, with a preferred route into the US ecosystem. At BVV,  we believe in the opportunities blockchain technology and emerging business models bring to new and established companies. Our mission is to help blockchain-enabled business models to succeed.

My name is Heinrich Zetlmayer and I am Founder & General Partner at Blockchain Valley Ventures (BVV). I have extensive operational and strategic experience in the growth and turnaround of small and large companies internationally as an investor, entrepreneur, advisor, and executive. Prior to BVV, I was a Vice President with IBM and before that, Senior Partner at Arthur D. Little, an international management consultancy firm, leading the company’s Global Operations Practice. I am also an active member of the board of Lykke Corporation, the global trading platform based on blockchain technology and former Co-CEO, now board member, of ESL gaming (www.eslgaming.com).

How is this global Coronavirus emergency affecting your work, startup funding and what are you doing in this regard?

The Coronavirus has affected our work in many ways. Investors are grappling with economic uncertainty and may delay some decisions. We are also used to going on roadshows with our portfolio companies or for our own investment vehicles and meeting investors in person, which is simply not an option at the moment, so we are adapting to doing this all remotely now. Operating remotely is not entirely new to us, given the global nature of our business, but we are used to investors wanting to meet in person before closing a deal. These changes will take time, but we are adapting quickly and effectively and we are working on new ways of supporting startup funding.

We are also seeing some very positive impacts such as increased demand for our portfolio companies, like Peddler, Teleport, and Keyless. Increased online commerce, the need for remote working, secure authentication and spikes in streaming activity mean each of these are experiencing rising demand. 

What are the most common challenges that blockchain startups encounter on their path to product release, and how do you assist them in overcoming them?

First and foremost is the funding challenge, where we not only support as investors but also in further fundraising through our corporate finance team. When you’re an early stage startup, you don’t have all of the proof points to prove your product’s potential, so with our credibility, we can help and offer connections to investors. 

Secondly, there are many business decisions to be made, resulting in the potential for mistakes from startup founders that may not have much business experience. Leveraging our own experience, we can help to avoid those critical mistakes. 

Last but not least,  besides the product, you need a market-entry strategy.  We have a wealth of knowledge and experience on how markets and clients work and can therefore provide guidance regarding market entry strategy and tactics. To successfully launch a product, you need to also support everything else around it.

ICOs have lost their former popularity, what tools do you offer to blockchain startups to reach retail investors?

It’s currently very difficult for startups to reach retail investors in general. We have great experience with STOs — Security Token Offerings — and have conducted several of them in the past few years. They are certainly at a low level currently but will gain more prominence once we see more licensed exchanges that can trade security tokens, which might be as early as the second half of this year.

 In your personal opinion, what is the future for public blockchain cryptocurrencies in digital payments?

I think public blockchain cryptocurrencies have a clear future as an alternative to centrally controlled cryptocurrencies. Even while we will see the CBDCs (Central Bank Digital Currencies) evolve strongly and drive further adoption of digital currencies, I do believe that independent currencies will still maintain their attraction for not being centrally controlled. Much of this will depend on how attractive or unattractive these new CBDCs will be once they launch to the public