Sramana Mitra: I think there is a lot of garbage and a few good ones. What are your pointers for people who are trying to understand good ICO examples? What are ones that you consider are good credible ICO’s?
Andrew Romans: Rahul Sood was the head of Microsoft Ventures. I knew him there. He left Microsoft Ventures to acquire a company they had invested in and merged it with a new company he established called Unikrn. It’s an ambitious name for a startup. They do real money gambling for esports. Madison Square Garden will sell out three to five nights in a row or people paying money to watch other people playing video games.
I recognize that that’s a real thing. People like to gamble on sporting events and people love to gamble on esports. That is legal in the UK. It’s legal in Australia, but it’s not legal in the United States. In the US, they came up a couple of years ago with their own currency called Unicoin so that American domicile people could participate in this gambling in exchange for Unicoin for real-world prizes.
I asked Rahul. Lawyers have looked at this and said that this is not real money gambling. When ICO’s came along, we looked at each other and said, “We already have a crypto type of currency for our company. Maybe we should use the Blockchain for this and have the Unicoin exchangeable for these cryptocurrency exchanges. They raised $30 million dollars.
Tech Crunch wrote about the transaction as finally an ICO that makes sense. The rest of them were like equity crowdfunding. This company is doing very well. It’s got real technology and a very strong management team. It’s very international. It seemed to check a lot of boxes for what an ICO should be.
Sramana Mitra: For me, the only box that it doesn’t check is if it’s worth doing – supporting people’s gambling habits.
Andrew Romans: Fair point. It became clear to me when I was in the Middle East in November. I’m flying to Dubai again next Friday. Apparently, a lot of these people who have so much money have someone in the family who really destroyed his life on gambling. We’ve set a policy that we don’t want to be investing in any additional gambling-related companies.
If you’re watching an American football game, they say, “Will he make the first down?” While the game is happening, people are answering questions. You can put some money down at the beginning and depending on how many answers you got right, you win money or you lose money. These are very profitable investments,but it is a vice. We decided that, in the future, we’re not going to invest more.
Sramana Mitra: I’m glad to hear that because I have zero interest in these kinds of businesses. I think there is zero value addition. It has vast opportunity for value destruction.
Andrew Romans: If you talk to the CEOs, they will not use words like gambling. I’m being quite to the point.
Sramana Mitra: I know Rahul Sood. I know very well what he is doing. I have no interest in this business.
Andrew Romans: They’re use the word fan engagement.
Sramana Mitra: It is gambling.
Andrew Romans: I said what I think it is too – real money gambling.
Sramana Mitra: Same debate that we are currently encountering in a much bigger topic, which is addiction to social media and addiction to games. People are realizing that this is not good. It’s not healthy. This debate is going to play out in real-time in the next few years. How much time do we want to spend on these devices and destroy the mental health of huge populations of people?
Andrew Romans: I was speaking to my brother about this this morning. We both have young children. The world we grew up in is very different from the world that others have grown up in. Our kids can hardly brush their teeth without having a video running on YouTube.
Sramana Mitra: It’s terrible. I’m happy to learn about what you’re doing. Good luck with your ambitious agenda of doing global venture capital with a new fund. Thank you.