ICO Angel Investor Interview with Steven McClurg
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Steven McClurg Interview Transcript


 

Adam Chapnick:

Hey, everybody. It's Adam Chapnick here at Block-Con 2017 in Santa Monica. I'm here with angel investor Steven McClurg. Hi Steven. How are you doing?

Steven McClurg:

Hey. Good, how are you doing?

Adam Chapnick:

Good, thanks. Thanks for being with us.

Steven McClurg:

Thank you.

Adam Chapnick:

This is an exciting time to be in this new world of everything blockchain. How were you involved or how did you get to be involved?

Steven McClurg:

I took a very slow approach when I started looking at it at first, because I was worried about regulation and as an investor, how you would actually be taxed on it, how would you follow securities rules, just because that's the industry that I came from, and I felt like the FCC started getting better guidance, I felt like it was a good time to start coming in and dipping my toe in the water and looking at a few things.

Adam Chapnick:

Got it. That was relatively recently.

Steven McClurg:

That's right.

Adam Chapnick:

Now, you come from a particularly relevant field, the little bit of dipping your tow into equity crowdfunding, which is also something I share background in. Something that I constantly ask people, is how does this regulation impact the future? Is it going to tamp it down, or is it going to not hamper the growth of all these ICOs and everything? What do you think?

Steven McClurg:

I actually think it's really good for the industry. I think having some clear lines so people understand that they do securities rules in certain cases actually brings in your more sophisticated and better investors, and then a lot of the deals that are let's say crap are going to go start going away, because they're going to have a little bit more eyeballs on them.

Adam Chapnick:

Got it. What about the phenomenon of the tens of millions of dollars in minutes. Is that going to be impacted by the fact? Are we talking about just a little wonky reggae, is it? How is that going to impact do you think?

Steven McClurg:

I don't think regulations and the attention that the FCC is paying to this space is going to hurt that. I think what's really going to hurt that is just the pure size and volume of momentum of what people actually have and what they can invest. I think at the beginning of this whole era, there's been some irrational exuberance and that's slowly going to start going away. You're going to see right-sized deals coming to market again.

Adam Chapnick:

Got it. What are you most excited about? Is it Bitcoin per se, is it cryptocurrencies, is it ICOs' tokens of this kind and that kind, or is it - what do you think?

Steven McClurg:

Well 80% of the people out there, maybe even fewer than that that are watching this are going to think I'm crazy, but I am a libertarian. I do believe in the blockchain, I do believe in the technology, and I do think that this is a really good path to create various currencies or even a single currency that has a little bit less regulation from a good standpoint, I mean, invisible hands coming in and moving markets as opposed to letting free markets work for themselves, but I do believe in a world where there is a certain amount of regulation that protects people, in some cases protects people from themselves, most the time protecting them from other people trying to rip them off.

Adam Chapnick:

Yeah, yeah. I think it's such a tricky balance, and the promise here, there's so many different ways you can look at this.

Steven McClurg:

That's right.

Adam Chapnick:

Are you interested in sort of the blockchain as distributive ledger technology as how it can help all kinds of businesses? Are you more, it's the libertarian in you, is it the currency as something people can transact with like in Africa and they'll have access to have something they didn't, or is it something like gold, like digital gold, you know, up and speculating, or you know, all of it?

Steven McClurg:

Well, there's really two pieces, right? In one of them, it was kind of an aha moment for me. In my previous business, we had brought a company, I'll go ahead and say the name, Dwolla, to do a to of our online ACH transactions, and a lot of our friction for something that's supposedly a newer technology, but the amount of friction, the amount of cost, it was a burden on our business, I literally thought well, you know blockchain technologies reduce that friction, reduce that cost, it makes it easier on small businesses trying to do transactions. It really puts on notice a lot of these legacy technology platforms. When I say legacy, only within the last five years, but legacy financial transaction platforms that still create that friction and still a high cost to small businesses, and I think this is great technology that will help a boom in small businesses in the United States and around the world.

It's interesting that you brought up Africa, because my background from way back was I was an emerging market bonds trader and analyst and I did a lot in Africa, and it's a really interesting continent because you got all these independent countries and it's really the area the world is going to experience the highest growth of population and commerce in the coming future, so there's a lot of opportunity there, but the banking industry there is very fragmented, not like it is in Europe or in the United States or in Asia. I think there's a lot of opportunity in Africa to create a new technology that will actually make it even more frictionless so that all the people in the various countries working with fragmented banks and really come together.

Adam Chapnick:

I brought it up, because I hear a lot of people saying snippets of that, that there's promise in Africa, there's promise in Africa, it's this democratization of currency in some way, shape, or form. I'm very excited by that, too, not that I pretend to understand it entirely.

Steven McClurg:

Yeah, yeah, exactly.

Adam Chapnick:

For you, in terms of where you want to get involved, if you had to look into your crystal ball, where do you think the most interesting developments are coming in terms of all of this?

Steven McClurg:

Well, I'll tell you where I'm looking as far as where I'm putting my money, and that's mostly in companies that have real blockchain technologies, or real transformative technologies that are either mostly created or already exist, and they're raising through token sales the ability for people to use those technologies. I'm mostly in that, and it's oddly enough that you say I am very interested also in companies that are doing business in Africa and bringing that together.

Adam Chapnick:

Interesting, huh.

Steven McClurg:

Look, I think it's 10, 15 years from now, but ...

Adam Chapnick:

It's a good time to get in then.

Steven McClurg:

Yeah, exactly. I actually had the opportunity about a year ago to sit down with Bob Diamond who was the former CEO of Barclays and he had started this business with another partner called Atlas Mara, which is trying to centralize all the fragmented banks in Africa, and he's one of the smartest guys out there in capital markets, and the fact that he's doing this now really early seeing 15 years into the future is quite impressive. I think that's where I want to be. Sometimes I'm not so smart myself, so I try to follow what smart people to ride markets.

Adam Chapnick:

Amen, amen. That's why I got married.

Steven McClurg:

Exactly.

Adam Chapnick:

You want to give a shoutout to particular investment that you're really hot on that you really feel like has got promise, not to hurt anybody else, but anything you're feeling excited about?

Steven McClurg:

No, because I don't want to feel like I'm giving advice, but ...

Adam Chapnick:

Okay, even still.

Steven McClurg:

I will give a shoutout to Ryan Scott, I don't know if you know him.

Adam Chapnick:

I don't.

Steven McClurg:

Him and I have been working together quite a bit in making some investments in the ICO market. You should get to know him. He's a famous investor.

Adam Chapnick:

Ryan, you're invited to a piece with us very soon. I can't wait to meet you.

Steven McClurg:

Yeah, exactly.

Adam Chapnick:

Cool. Thanks so much for taking some time to talk to us today, Steven. It was great meeting you.

Steven McClurg:

Yeah, thank you.