Tokens vs Equity: FAIR's Fundraising OS Replacing Token Rounds

The new core for the next era of finance.

Mark, welcome to Steelash Live. Good to see you. Good morning. Good afternoon. Good evening. Good morning. Good morning. Looking good, man. We're we're excited to dive into this. This has been a hot topic. We were even just talking about last stream. We were talking about MetaDAO, talking about Credible going out, you know, raising fundraising, raising some money there.

And it really just drew Drew asked the question, like, if you wanted to go raise funds and you didn't wanna go the traditional VC route, like, would you go? So this this this conversation couldn't be more timely. So I was even telling Drew before the stream, you've been building, it seems like in the Web three system, four or five years now. Started on the more NFT metaverse side of things and have kind of evolved. So maybe give the people a quick introduction. Where'd you start?

Where'd you decide to pivot, and what are you building now? Thank you for having me, guys.

Yeah. Name is Max Sathome. Been an entrepreneur fifteen years. Web two, started Web two, raised seed series a from some top VCs across Europe. Built big platform guy. I've I've built scalable platforms. I had the biggest ecommerce furniture marketplace for furniture makers in Europe and built currently still running as the world's largest social network for architects. Then crypto came along. 2017, I built the first ICO platform in The Netherlands.

Big crash and burn, but I absolutely loved the the, you know, the decentralization and democratization of finance and allowing anyone. Went on as a background in architecture, actually, so that was, like, my that's how what I studied. And then NFTs came along, and I built the first three d NFT marketplace and did very well with that. That we raised from some top Web three VCs. I have been acting on both sides of the table, so raising, but also investing.

Big user of, like, AngelList, also, like, Echo in a number of groups there. And then about, like, just under a year ago, I became a mentor, an incubator, an an on chain Solana incubator called ICM dot Run. Included in that is, like, Alon from Pumped Up Fun, looking at some Pudgy Penguins, Sergio from Etiara, a bunch of amazing mentors. And this incubator got, like, 1,600 applications, and we had to go through them one by one, and we spoke with every project.

And we just saw the demand and the appetite for for projects to raise equity instead of token launches. And we realized that these are, like, you know, web three native projects,

but the real value was lying in the equity and not in the token. Was that not what you expected? Maybe at that point, you kind of thought tokens and doing everything natively with tokens was what people would want. That was a little kind of an insight for you. So

I I built the first ICO platform in The Netherlands. I love tokenization. But, yeah, I maybe I'm being kind of here my my opinion, of course, but token launches where the value really accruals is in the equity. Tokenization right now is not fully legalized. It's not it's not classed as a security. Projects, if they're acquired, the equity's acquired, the token isn't. It's not possible for them to IPO.

And Yeah. We saw a big that was a big blow up recently on on on X with with Cypher and that whole model, which, again, it really just reintroduced that conversation. I think that's actually I think I found out about Fare Club through a com I think you were commenting or I think I don't know Ron. Well, I know his name is Swanson, was commenting, I think, on on that that topic of just like, hey. This is this is not good for the space. Like, this should not be how businesses are struck structured. Yeah. Yeah.

And, you know, Padre was acquired,

but then, you know, the equity was acquired. But there were a number of acquisitions last year where the equity was acquired and the token became worthless. Right? And and we saw the investors demand for equity then over tokens because, you know, tokens are just hard. You need to have more buy pressure than sell pressure. Where does that sell where does that buy pressure come from? Hyperliquid, obviously, it did extremely well, but they didn't have any VCs. They didn't have any sell pressure right off out the gate.

So and I'm not I don't wanna be shitting on tokens at all, but that's I I love tokens. But we built a platform where you can raise equity using stablecoins, and there's never been more stablecoin holders. There's never been more never been a higher amount in in TVL in in stables. And I think what we want to do is we want to bring those stable point holders incredible opportunities. Everyone's looking for the next cursor. You know, everyone's looking for the next robotics company.

We're speaking with quantum computing projects, robotics, you know, the full spectrum. I think crypto investors, crypto holders deserve the right to also have access to some of these incredible, you know, legitimate, like, high performing companies.

What what what is what is the hardest part about actually making this this happen? I'd imagine it's perhaps not on the actual technical utility underpinning. And and what like, where where does the actual difficulty of of building this type of system really lie in your mind? Because we we're, one, we're really excited to explore this topic more broadly.

We're starting to see more companies realize this and and kind of take unique approaches to how they want to go to market by serving and helping more companies do what you're doing. I'm wondering, like, where does the difficulty arise for you, and how are you thinking about, like, defensibility or focus in terms of the business model here a little bit?

So, I mean, you you can kind of see us as, you know, we're we're building a competitor to AngelList, and we're bringing that on chain. You know, Y Combinator did their first stablecoin investment in April this year in one of their cohort projects. And how are we how are we competing, you know, with AngelList? First of all, to bring we we have tech that helps founders, like like, no other tech at the moment. So we basically we have a bunch of AI agents within our platform.

So founders can join Fare completely for free. They can create a deal room. That deal room is compliant, so it can be password protected. Investors can request access, and we cover we we make sure that it's all compliant even with, you know, US regulations. And within our products, founders can create the deal room, they can share the deal, but we also help them identify the most relevant investors for their project.

And we're using we have a number of AI agents which can actually dive into, for example, a founder's x, a founder's LinkedIn, a founder's Telegram, and go and source those those investors in your warm network, put them into a pipeline, and then we help the the founders with actually reaching out to those investors, and we provide a number of tools there. And then we also have a database of over 300,000 investors, and we have what we call deal fit technology. So we look at the deal room.

We use our AI agent to look at the deal room, and then we go and match that deal with the most relevant investor. And then we help founders with, you know, reaching out to those investors and actually kind of contacting them. And then Cool. Cool. Within and then we've had within our pipeline, we have all of KYC, KYC, anti money laundering. So we make sure everything's compliant. And then we also manage the the special purpose vehicle roll up,

and we're, like, the GP on that SPV as well. We we've we've we asked this question on our last stream, and, like, sometimes it feels like a chicken and an egg. Right? Do you go get all the investors first and then the founders come? Do do investors come once you have all the founders? Who do you start with right now? Like, who whose pain is bigger? The people that want to invest or the founders that need a raise, or they do you feel like they're growing in tandem? Yeah. It's I've always built platforms

in tandem, and it's really down to, like, having I I think we have this constant conversation in the team all the time, and it's down to having incredible deals, but then also having incredible tech for the founders too. And so we also work with curators that are actually helping with the deal flow.

So we actually share some of these with curators, and some of those curators include, like, some of the super teams, like La Familia, that includes, like, some agencies, like surgeons, Lunar Strategy, and then we also have, like, incubators like ICM dot run. And we're working with this group of curators that are incredible, and they basically vet the deals and then bring them to to Fare, and then they use our tech stack.

Now how many how many deals are roughly going through this flow currently? Like, is this, like, once a week, once a month, multiple times a day? Like, what's the volume looking like currently of deal the deal rooms? We have two projects raising right now.

One of them is called Dapital. Their lead investor there is Binance, EasyLabs. We have another project called Dominion. They're about to launch the first one to one backed silver token on Solana, and they're basically like a silver treasury company. And then we have 10 more deals currently creating their deal rooms and actually sharing their deal rooms privately. Is that the most friction filled part is, like, the deal room

onboarding process? Like, what would you say is the most intensive I'd imagine that part, like, getting the right quality and vetting and going through that process and making sure like, how of of the total pie, like, how many founders that are trying to get in do you expect to actually accept? Is it pretty low, or is it pretty pretty easy to get in?

No. It's not easy to get in. We we do require that they have a curator. And as I mentioned, a curator could be an incubator, an accelerator. We're also working with VCEs that are curators, but we want to see like, we do our own vetting, but we want to see a third party also doing its vetting. We have built into fair as well, k y b. So the the project that's raising actually has to do a full KYB, and we can prove that that's been done. And then that shows investors that they're really investing in a real business.

That's awesome. Yeah. We because this makes me feel like like like Entendre,

like, how in the same way that they were empowering teams like RAIN and Braille through their early, you know, their early stages. There's I think feel like there's this there's this tendency in the space. Know? We wanna go look at the mega companies that have already raised a $100,000,000, and how do we how do we go get their business and and make money off of them? I love the angle of, hey.

How do we empower this next generation of startups, and how do we grow with them, and how do we help them raise their pre seed, their seed, and maybe one day they go raise a, you know, $100,000,000 series series b. That definitely I feel like there's probably at least some patience on your end to say like, hey. We we're okay starting with, you know, these early stage teams and and growing with them. Exact yeah. So we're definitely focusing right now on pre seed and seed.

And we're but we're also speaking to, like, you know, the y company, the latest cohort, you know, as I mentioned, speaking to quantum computing, robotics companies. The Cursor, you know, I have a few friends that invested quite early in Cursor, and, you know, many people have for them. Opportunity. Yeah. Many people them. And they and they passed. Right? And so we want to we wanna bring those opportunities really to stable coin holders and, know, get them get them having, yes, some incredible opportunities.

It sounds like you've created a really strong distribution on the investor side just, like, through your career and all of the the stops along the way. I'm imagining you've you've you've built a really strong you said 300,000 investors who are in this network of sorts that are are around

at least? That's in the database. Yeah. So that's In the database? We we have a database that basically looks and in my personal network, it's difficult to say exactly how many. It's like that's a lot of, like, purse but so you have at least, like, connectivity to those.

I'm I'm curious what you think about the if you've run into this company at all, just given the Solana native nature of things, StartUp Fun in their approach with We we got pretty close to that team. We've had Adam on the show before, and what we find really interesting is how they how they think about media in relationship to fundraising. Like, this kind of a really exciting moment when founders are actively like, they go through the diligence.

They have the deal room set up, and now they're in this, like, active fundraise moment and really helping equip them and and get get visibility to to those deals. How do you think about like, what any thoughts on, like, that media strategy or how you help founders get visibility to their their deals when they're fundraising? Because because we're doing equities,

we, like, as Fair. Club, you know, we can't solicit investors. It's, it's it's not it's not token sales. I'm I'm definitely a fan of what Staff. Fund are doing. They do high quality media for each project. The projects that are listing on Fare, most of them have, like, a high quality trailer video,

and that's that definitely helps. Interesting. Right. So you legally are bound by not soliciting for those teams. Just legally, that's a constraint you have. If you're selling securities,

unless you have, like, a full broker license, no one is allowed to, like, share deal terms with other investors publicly.

Interesting. Just yeah. So Where where do you see the risks or, like, the opportunity slash risk for the tokenized alternative of this? Like, is that a benefit of the more token native nature of STAR's doing, or do you actually see that kind of coming into a regulated state similar to what you're doing eventually?

I'm I'm a big fan of Bedrock, which start up fun are using. And, yeah, I know, yeah, a number of the Meteora team and how they've developed that, and I've spoken to the Bedrock team. And I think I think it's a a real also know, for example, the the street standards with the FDN. I also know the saw guys. They had to also their model. Right now so the projects that that we're working with, their exit or, like, their exit strategy is looking at an acquisition or an IPO.

And right now, because tokenized equity is such a gray area, many of the projects that we work with, you know, we if you like, MetaDow is amazing for projects that want to be fully decentralized in, a Uniswap because then all of our equity is represented with the token.

But if you're a project and you're looking for an acquisition in the future or an IPO, having non KYC or KYB shareholders, and there's multiple definitions of that, and I know Bedrock has its own model there, is really tricky because, you know, every investor needs to be an accredited or sophisticated investor. So for us, Fare is a great solution for projects that are, like, turning it around where it's, stable coin holders can invest in in a web two projects more.

Whereas, like, startup fund is very web three native projects. Yeah. Yeah. Yeah. The nuances there, know, are very, like, important and sensitive. So thank you for it's really helpful as we try to approach this conversation as thoughtfully as possible. That that difference is really is really interesting.

And and also knowing where we we might sit in that relationship too, like, idea of participating and like, my heart here is, like, we wanna if founders are fundraising and they're building cool stuff, we would love to help tell their tell those stories and, like, get more visibility. And but, yeah, the the nuances around solicitation and stuff is, like, really interesting and important to take into account.

So, yeah, we can I'd love to talk more offline on that and just, like, how we could think through that potentially. But A note from that, of course, is the Clarity Act. And if it like, if it if it passes

and the details of that. And if the Clarity Act comes out and it and it becomes legal that tokens equal securities or, you know, tokens are our securities, then there's going to be a lot more implications there, and there might be more opportunities. But for and because it's a gray area, yeah, I I'm not a securities lawyer, but, yeah, that's our focus is more on finding those incredible, like, Web two projects that it's it's real equity. Sure. Sure. So note, Zach, that we need to get Meteora and Bedrock

on to see kinda how they're thinking about things. So Yeah. We'll we'll put a pin in that. Mark, I'm just curious, like, from the perspective, you know, we we've seen this conversation of, like, yeah, you wanna invest in the next cursor or you wanna invest in the next, like, bridge. Like, those are clear, like, standouts of companies you would love to get in on the ground floor. Of the companies you're talking to, you've mentioned some interesting sectors. Were those the sectors that you were expecting?

Has this changed a lot in the last, like, six to twelve months, especially with the with the rise of AI and especially, I think, some of these, like, very niche business businesses being built, you know, with AI at its core? Are you seeing any companies coming in that just you would have never thought in a million years would come to fair? Or are you serving companies right now that you're like, nope. This is my bet. They're exactly what I thought would come. Just today, I spoke with a company

that is building robots for hotels, like, like, fully roboticized hotels, if that's the if that's right time. But, you know, like, quantum computing, I'm very excited about. Like, some of the space tech, you know, we want to provide incredible deals to to investors. So the investor appetite right now is space tech. That's the Blue ocean. You know, longevity tech, agri tech. AI hardware is really big. Obviously, Cursor was acquired, and that's that's, you know, AI software.

So the these are definitely verticals which we're finding

investors are really interested in. Why do you think space tech? What what about is this, like, piggybacking on SpaceX? You know? Is is is this just is this the the next frontier? Like, that would sort of surprise me even. I've seen I've

seen a really interesting research paper into how SpaceX is as it continuously makes getting to space cheaper and cheaper, it opens up far different markets. So mining asteroids, data centers in space, obviously, you know, multiple different types of satellites. Like, all of all of the stuff that you can do in space is all sorts. I'm seeing all sorts of projects popping up riding on the fact that SpaceX is is making space accessible.

And there's, like, an interesting curve of as it gets cheaper to access space, the market for space gets bigger and bigger. That one just What kind of a a four month old? Little, like, right now. I mean, it makes sense, but, hey. No no pressure, Elon. If you don't get anybody's face, only the lives of a couple, you know, probably thousand investors and and founders are are on the fringe. The data centers makes a ton of sense, though.

I mean, what is it about the the amount of, like, water consumption that current data centers go through for for water cooling. So, again, when you think about it from the not only just pure, you know, space, but even energy, how are you cooling these systems? It does make you go, But, again, manufacturing, how do you get them up there? How do you maintain them? You're right. I mean, it is the formation of a whole new whole new economy.

Yeah. Yeah. It's it's a universe. Right? It's it's, like, it's fascinating. Also universe. Yeah. The the minerals, like, yeah, about what you can do in space. I'd love to share this report with you guys after the call. I'll I'll go find it. And

I was gonna say, please drop drop it in our Telegram chat. That sounds like great great weekend reading.

Yeah. So this is definitely some of the stuff we're excited about. And more on, like, we do have a number of crypto native projects raising on fair, seem to be raising on fair too, and stuff that I'm excited about is still, you know, neo banking, more like, there's so many more rails for crypto where crypto's in the background. You know? Like, Collector Crypt's just, for me, is incredible. It's a great example as a project. One this week. Yeah. Just where crypto's in the background, but it's Pokemon cards.

It's collectibles. Right? And

What was the name of this? I don't think I saw this. Collector crypt. But then they just they enabled support, I think, for one piece cards. They've definitely been doing the and then they also it was it was it one piece cards and actual pack ripping now that they brought? I I could be off. I it's one of those ones where it's like it pops up on my timeline every now and again. I'm like, oh, that's cool. They're still they're still chipping away at it. Just the one? But Yeah. I mean, this a massive market.

They were doing they were doing more volume than pumped up fun. Wow. Yeah. Crazy. Is this effectively, like, a new kind of, like, NBA top shot for Yeah. Pokemon cards? Exactly. Yeah. Yeah. Cards, like, new ones sports on cards. I think they they do, yeah, sports, one piece. Yeah. What a massive industry. I mean, I'd lying. I love love a good love a good practicing session on on on YouTube. It's essentially an RWA. Right?

Because it's real it's a real Pokemon card that you own, but then you own it on chain, and you can redeem it. And you can get the Pokemon card or, you know, the the basketball card, like, delivered to your home if you wish.

Makes a lot of sense. I mean, that seems to be the big missing piece when we're talking about tokenization of these things. It's like, well, how easy is it to actually redeem it if you want it at your house? Man, cool stuff. I'm glad you brought that up. Yeah. Mark, anybody else? We we have to transition here to to Jess. Drew, any last questions for him?

I I was gonna ask just, like, in the learning journey of what's happening with fundraising using things like stablecoins or on chain rails in and around fundraising, Any teams that you would recommend that we meet with and learn from, we've mentioned a few of them, like Bedrock, Meteora, Street. These are all three, like, ones that we we'd be excited to talk with. Any other ones that are kind of in this category that you find would be compelling to learn from?

Yeah. I definitely a big fan of, like, the Bedrock guys and what they're doing. You know, we've that's Pat under Meteora, of course. Happy to make an intro to those guys. I think we obviously have like, for us, a project that's raising unfair right now is is Dominion. That, you know, they're doing real world assets over. That could be quite interesting Mhmm. And how they're how they're solving that problem. Around, like, the tokenized equity, yeah, you spoke with the startup fund guys, obviously, MetaDAO guys.

Numia Finance is a good one. That's these guys are basically bringing MetaDAO to to EVM.

That would be cool. We were just last guest was talking about tokenized gold and that the the upside of real world assets, tokenization, how that's coming together. So, yeah, Dominion would be great. These guys look these guys look interesting. So last question on my side. If we let's just say Zach and I are like, hey. This sounds great. Dominion's cool. What would the process to what would the process look like to potentially be an investor or apply to be an investor?

If, like, what what would we need to what boxes would we need to check? What's the process we would go through there?

You can sign in to Fare as an investor. You can check out their deal room, and you can register interest in the round. Are there any minimums or things that, like are are

these minimums typical, like, two fifty k accredited investors, stuff like that, that all still applies?

They we're we're going to file they can have 35 sophisticated investors and then unlimited accredited investors as part of the deal. So if you guys qualify as sophisticated or accredited,

I I've never heard of sophisticated before,

but we'll how do you define that? Is that kind of a loose term? It's defined by the SEC, but it's quite it's quite loose. Yeah. You need to I don't think that's true. Gonna qualify as sophisticated.

I might. I don't know. We'll see.

Yeah. Awesome. Yeah. Happy to introduce you to that team. Mark is great. They're launching the token very, very soon with Sunrise.

And first one to one back silver token on Solana. Pretty pretty exciting. That's huge. That's huge. Awesome. Well, thanks for your insights today, Mark. Thanks for sharing with us. Great to learn from you. Would love those interests whenever whenever makes sense. Yeah. Great meeting you both. It's a pleasure to be here.