EFTA01088644.pdf

BLOCKCHAIN CAPITAL, LLC CCP II, LP OCTOBER 2015 BLOCKFtlprIIN ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 95111 [email protected] EFTA01088644 TECHNOLOGY THOUGHT-LEADERS ARE CONVINCED Bill Gates: "Bitcoin is better than currency...a technological tour de force." Ben Bernanke "[Virtual Currencies] may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system." Eric Schmidt "Bitcoin is a remarkable cryptographic achievement and the ability to create something that is not duplicable in the digital world has enormous value." Milton Friedman (1999) "I think the Internet is going to be one of the major forces for reducing the role of government... The one thing that's missing, but that will soon be developed, is a reliable e-cash" Peter Thiel "I do think Bitcoin is the first encrypted money that has the potential to do something like change the world." Al Gore "I'm a big fan of Bitcoin...Regulation of money supply needs to be depoliticized" David Marcus (former CEO PayPal) "I really like Bitcoin. I own Bitcoins. It's a store of value, a distributed ledger. It's a great place to put assets." •-•,•/ BLOCKCHRIN CRI=ITRL ONE FERRY BUILDING. SUITE 255 SAN FRANCISCO, CA 94111 [email protected] EFTA01088645  INCUMBENTS EMBRACING THE BLOCKCHAIN NASDAQ- partnered with Chain to launch private company exchange NASDAQ "As blockchain technology continues to redefine not only how the exchange sector operates, but the global financial economy as a whole, NASDAQ aims to be at the center of this watershed development," - Robert Greifeld, NASDAQ CEO, Citi - launched "Citicoin" project 6 .6 "Blockchain technology not only has an opportunity to transform financial services but also extend far beyond payments to new use-cases and applications across industries," - Debby Hopkins, Chief Innovation Officer at Citi 4161 Santander - published: "Fintech 2.0 Paper: Rebooting Financial Services" Santandc "Blockchain technologies could reduce banks' infrastructural costs by $15-20bn a year by 2022" Standard Chartered Standard S "The banking industry is starting to see the many potential benefits of its underlying technology. For banks, Chartered 10•4 the blockchain has the potential to become a technology model for a low-cost and transparent transaction infrastructure." - Anju Patwardhan, Chief Innovation Officer Royal Bank of Scotland - announced a $3.5 Billion technology revamp over next 3 years RBS Me Roy,,, Rut:: 6-1!:‘,,!!,,,, t; "I don't know what's going to succeed. What I'm certain of is that we are going to see blockchain solutions, peer-to-peer solutions emerging in our industry and we want to be close to that development." - Simon McNamara, Chief Administrative Officer at RBS 111111 Bankof America Morgan Stanley BBVA UnionBank JPMorgan STATE STREET \\ ( •1 RBC NYSE CREDIT aUISSE *BARCLAYS ti. UBS BNY MELLON \-,••••:% BLOCKCHRIN CRIDITRL ONE FERRY BUILDING. SUITE 255 SAN FRANCISCO. CA 94111 investor@blockchainscapital EFTA01088646 THREE TECHNOLOGY EVOLUTIONS OF DISRUPTION 1975 The PC Era The Internet Era The Blockchain Era Semiconductor Technology TCP/1P Protocol Bitcoin Protocol &ii 4 Goo* amazon it coinbase :: Microsoft facebook ebay ABA OD ChangeTip i=TRNLJ_ ',...;:i) BLOCK EpplII 4 ripple 4 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 [email protected] EFTA01088647 EXPERIENCED TEAM IN INVESTING BART STEPHENS BRAD STEPHENS BROCK PIERCE PAUL STEPHENS Chairman of the Stephens Inv. Stephens Inv. Bitcoin Foundation Robertson Mgmt. Mgmt. Board Stephens & Co. Ivanhoe Capital • Fidelity Ventures Founded 15x • RS Investments EXPERIENCE • E*Trade Group • CSFB Startups • Duke Endowment • Princeton • Furman Selz • Raised > $200M UC Berkeley • Duke • Invested in > 25x Endowment Startups Founded 8 crypto 40 Years in Silicon #2 U.S. Long/Short Hedge Fund" currency startups Valley Investment RECOGNITION $500 Million AUM and often referred Management and 2.5x Venture Fund, 11.5% IRR to as the "father of Banking digital currency" Leaders in Technology Incubated and Founded 100's of Silicon Valley Investing Dozens of Startups Investments *Absolute Return Magazine 2004 BLOCKCHRIN CRPITRL ONE FERRY BUILDING. SUITE 255 SAN FRANCISCO, CA 94111 investor blockchain.capital EFTA01088648 SUCCESSFUL TRACK RECORD OF HOME RUNS PRIVATE MM. Q RelatelO 2014 25.0x 2014 77.0x Yalu 2004 8.1x illumina 2009 39.0x at,a 2008 6.9x 2010 4.6x RUPTURE 2008 5.0x aS1LON 2011 5.1x A ADDEPAR 2014 TBD lrCSOFT 2007 3.4x ( 7 IPOs and 13 Acquisitions ) ( 17 Public Acquisitions ) Private and Public Exits through Multiple Market Cycles BLOCKCHRIN 6 CRPITRL ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 [email protected] EFTA01088649 BROCK PIERCE - CHAIR OF THE BITCOIN FOUNDATION INDUSTRY LEADER AND SPOKESPERSON SERIAL ENTREPRENEUR IGE (2001-2007) - Merged with ItemBay Money I MILKEN INSTITUTE 20/20 Zam (2004-2012) - Sold to TenCent IMICICcsio IMI Exchange (2004-Present) Singularity University ©IRE Xfire 2.0 (2011-Present) Playsino (2011-Present) CoinSummit GoCoin (payment processor) 6The 0 BLADE Blade Financial (Bitcoin debit card) INSDE tg41047 I -o•todl tS areek """'"Cis4AcouAr, i ^ CO co—L— Coin Congress (conference) Repeat Entrepreneur and Digital Currency Visionary ••-•••!/ BLOCKCHRIN 7 CPIPITRL ONE FERRY BUILDING. SUITE 255 SAN FRANCISCO, CA 94111 [email protected] EFTA01088650 PARTNERS AND ADVISORY BOARD ALISON DAVIS* Director: Royal Bank of Scotland, XOOM, Fisery and First Data MARY CRANSTON Director: VISA, ex-CEO and Chair of Pillsbury Winthrop TERRY SCHWAKOPF EVP: Federal Reserve Bank of San Francisco, banking supervision MICHAEL MCADAM CFO: Union Bank (Mitsubishi UFJ Financial Group) SIMON MCNAMARA CTO: RBS, ex-CIO of Standard Chartered, BNP and Deutsche Bank VINNY LINGHAM CEO: Gyft (acquired by First Data) BOBBY LEE CEO: BTC China NICCOLO DE MASI CEO: Glu Mobile STEVE BEAUREGARD CEO: GoCoin CHRIS PALLOTTA Special Advisor: MIT Media Lab, Partner: Raptor Capital MATT OCKO Partner: Data Collective WILL O'BRIEN Co-founder: BitGo CHARLIE LEE Coinbase, Founder of Litecoin * Chairman of the Advisory Board Built a robust team of Advisors and LPs from the Blockchain ecosystem .----,// OLOCKCHRIN 1111.--1 ERPITRL ONE FERRY BUILDING. SUITE 255 SAN FRANCISCO. CA 94 i 1 1 investorablockchain.capital 8 EFTA01088651  CRYPTO CURRENCY PARTNERS I, LP =I AlphaPoint b bex.io "T?tBitFury Q BitGo pS, ESS 1. 11y l 114, 10 BLADE 4/O Blockstream BTCC BLOCK YPHER chain ChangeTip *exPress'in O CIRCLE coinbase ' 11" Gem Go coinsetter Mind CLedgerX Alt Aweem4 ....toy. xapo _Box zao The First Dedicated Bitcoin Venture Fund - 30 Investments, Fully Deployed EILOCKCHRIN ERPITRL ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor.ockchain.caoital EFTA01088652 CRYPTO CURRENCY PARTNERS II, LP BITACCESS ABRA 0 BitGo OitPesa Blockstream Bitnet -114 idcoinbase 011. *expresscoin ABA chcir ChangeTip coinsetter kor Gern GOCOIN eilLedgerX /: PEERNOVA .4 ripple Current portfolio - both contributed and new investments BLOCKCHRIN 10 CRPITRL ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investorablockchain.caoital EFTA01088653 PIPELINE & PROCESS 600+ Business Plans 200+ Meetings CONSUMER • Exchanges 37 Portfolio • Remittance • Deep Global Domain • Digital Wallets Companies Knowledge > > • Extensive Networks HISTORIC INFRASTRUCTURE • Proprietary Deal Flow • Recruiting VENTURE • Side Chains • Primary Investigative • Business Development • Blockchain Apps Due Diligence RETURNS • Capital Introduction • Mining • Exhaustive . - Management/Industry ENTERPRISE Interaction • Multi-sig workflow • Payment Gateways • Financial Tools 'i• i BLOCKCHRIN .....-1 -..., CRPITRL ONE FERRY BUILDING. SUITE 255 SAN FRANCISCO. CA 94111 investor al blockchain.capital EFTA01088654 ACTIVE BLOCKCHAIN VENTURE INVESTORS Gook greylock ventures CC khosla ventures NEA. BENCHMARK FJ partners. b ig Redpoint LIGHTSPEED HIGHLAND Nio VENTURE PARTNERS * FORTRESS CAPI IAL PAR I NI RS Foundation unionA • • • •• Ribbit Capital RADAR 0 PARTNERS ANDREESSEN PANYERA Ty; ventures HOROWITZ • • • •• FOUNDERS FUND IDG b ° °St PLOWERAY IT- RR E Ventures Combinator e firstii.i ) CAPITAL Blockchain Capital has co-invested with these leading VCs BLOCKCHRIN 12 CRPITRL ONE FERRY BUILDING. SUITE 255 SAN FRANCISCO. CA 94111 investor@blockchainscapital EFTA01088655 CCP II - 8 CONTRIBUTED INVESTMENTS BitGo June '14 575.000 Series A preferred Coinsetter December '13 $50.000 Converted to Series A at 1.5x expresscoin November '13 $25,000 Convert to Series A, $2.5m Cap GoCoin October '13 $100.000 Converted to Series A at 4.5x Kraken April '14 S70.000 Series A preferred LedgerX July '14 S50.000 Series A preferred BitAccess September '14 S25.000 Note discounted to Series A preferred BitNet October '14 $75.000 Series A Preferred TOTAL $470,000 (current value — $815,000... General Partners contributed co-investments to CCP II BLOCKCHRIN 13 CRPITRL ONE FERRY BUILDING. SUITE 255 SAN FRANCISCO, CA 94111 [email protected] EFTA01088656 CCP II - 12 NEW INVESTMENTS MADE PeerNova September '14 $50,000 Converted to Series A preferred BlockStream October'14 $100,000 Series A preferred ChangeTip November '14 $250,000 Series A preferred Bonafide November'14 $50,000 Note discounted to Series A preferred BitPesa December '14 $100,000 Note discounted to Series A preferred Coinbase December '14 $200,000 Series C preferred itBit January '15 $250,000 Series B preferred Ripple March '15 $250,000 Series A preferred ABRA July '15 $100,000 Series A preferred Stem August '15 $250,000 Note discounted to Series A preferred Chain September '15 $250,000 Series C preferred Gem September '15 $250,000 Series A preferred $2,100,000 BLOCKCHRIN CRIDITRL ONE FERRY BUILDING. SUITE 255 SAN FRANCISCO, CA 94111 investor (r) blockchain.capital EFTA01088657 CCP II - STRATEGY AND MAKE-UP Diversified Sector-specific 50% New CCP II investments FUND POSITION ALLOCATION 30% Reserves for CCP II follow-on rounds 20% Option to use CCP l's follow-on rights Leverage our network and industry expertise to find INVESTMENT STRATEGY investments that utilize Blockchain technologies and help these portfolio companies disrupt legacy industries. Access to CCP's early seed deals as well as future deals BLOCKCHRIN 15 CRPITRL ONE FERRY BUILDING. SUITE 255 SAN FRANCISCO, CA 94111 investor blockchainscapital EFTA01088658 CCP II - SUMMARY OF TERMS FUND TARGET $10-15M TERM 6-8 Years FEE/INCENTIVE 2.5% / 25% GP CONTRIBUTION +5% Fund or +$1m INVESTMENTS 25 ($100k - $500k per deal) STRUCTURE 4 x 25% capital calls, BTC Accepted •-•••!, BLOCKCHRIN 16 CPPITRL ONE FERRY BUILDING. SUITE 255 SAN FRANCISCO. CA 94111 investor@blockchainscanital EFTA01088659 CCP II SERVICE PROVIDERS ADMINISTRATION / CFO Kranz & Associates LEGAL Sidley Austin TAX / AUDIT Crawford Pimintel BANK Silicon Valley Bank CUSTODIAN Merrill Lynch BTC VAULT Xapo & BitGo BLOCKCHRIN CRPITRL ONE FERRY BUILDING. SUITE 255 SAN FRANCISCO. CA 9 4 11 1 [email protected] EFTA01088660 USE CASES FOR BLOCKCHAIN TECHNOLOGY Financial and Records Legal / Health / Education Bitcoin Private Equities Bonds Public Equities Smart Contracts Signatures/identity Degrees Shareholder Voting Remittance Crowd-funding Wills Genome data Trusts Licensing Spending Records Micro-payments Commodities Medical Records Escrows Delivery records Trading Records Derivatives Mortgage/loan records Arbitration Grades Patents Copyrights Digital Coupons Servicing records Micro-charity Certifications Academic Credits Public Records Commercial / Media Land titles Birth certificates Vehicle registries HR Records Supply chain mgmt Accounting records Business license Business Incorporation/dissolution Business transaction records Software licenses Business Ownership records Regulatory records Trademarks Spam Filters Hotel room keys Criminal records Passports Death certificates Global trade network Loyalty Points Vouchers Voter IDs Building permits Health/safety inspections Domain names Betting records Movie Tickets Non-profit records Court records Gun permits Voting DRM: Music/movie/book license GPS network identity ••-•-!/ BLOCKCHRIN ERPITRL ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 [email protected] EFTA01088661 OPPORTUNITES FOR BLOCKCHAIN ADOPTION E .—Micro-Transactions All Global Media Companies Financial Settlement Remittance Hot Spots Stock. Bonds, Derivatives. etc USA. UAE -> India, Mexico, Philip. Early-Adopt Millennials Currency Controlled Markets USA, EU, AU Korea, S. Africa, China, India Unstable Markets Africa, Venezuela, Argentina BLOCKCHRIN 19 CRPITRL ONE FERRY BUILDING. SUITE 255 SAN FRANCISCO, CA 94111 investor (e.)blockchain.capital EFTA01088662 INDUSTRY GROWTH: 2014 to 2015 Key Bitcoin Adoption Metrics Quarterly Year Ago June-15 March-15 Q2/Q1A Q1/Q4A June-14 A Commerce Wallets 9.345,510 8.457,207 11% 14% 5,467.263 Merchants 100,000 88,000 14% 7% 65,640 Merchants' annual revenue (Sbn) 187 187 0% 4% 30 ATMs 426 374 14% 9% 126 Unique bitcoin addresses 261,770 203,189 29% 29% 136,152 Industry All-time VC investment ($m) $832 S687 21% 50% $252 Number of VC-backed startups 113 105 8% 15% 58 Media Mainstream media mentions 371 458 -19% -10% 1035 -64% Technology Network hash rate (billion/second) 351.177,610 346.028,956 1% 11% 104,506,281 3x Valuation Bitcoin market capitalization ($bn) $3.8 $3.4 11% -22% $8.0 -53% Data sources and notes CoinDesk, Bleckctlain Info, B tcoirREse. GMAI. Coin ATM Radar Figures are cumulatrve horn start of records, except auque bitcoin adtresses and media mentions. ?Audi aro figures for the quarter ending that month Number of VC-backed startups and VC investment unadjusted for ctosed comparies: Meiotic, Buttercoin. BitInstant. and TradeHit State of Bitcoin Q2 2015 CoinDesk 7 BLOCKCHRIN ERPITRL ONE FERRY BUILDING. SUITE 255 SAN FRANCISCO. CA 94111 investor blockchain.caGital EFTA01088663 CASE STUDY: ChangeTip ChangeTip enables a "tipping" feature using Bitcoin on other companies' websites. It has built a Bitcoin micropayment platform that is currently integrated with Twitter, GitHub, Reddit, Google+, Tumblr, and YouTube. We believe that ChangeTip's micro transaction platform is poised to be the financial equivalent of the "Like" button, and enabling new mechanisms for premium online constant to be monetized. Social Accounts by Date ChangeTip NW '14 Apr 14 Adler, '14 ...Ln '14 Ju 14 Aug 14 Sip 10 OA '14 Na: '14 Acco,t, BLOCKCHRIN CRPITRL ONE FERRY BUILDING. SUITE 255 SAN FRANCISCO, CA 94111 [email protected] EFTA01088664 HYPER-GROWTH- 2013 to 2015 Github repository references Number of daily bitcoin transactions ' L0 000 1. 140 0)0 170.0001. 00.000 eo 000 t• 00.0001. 10 0001. : • 70.0001. Q. 0 • . • 2 • 0 11.011 Mir.10 Jan Forecast for Total Bttcoin Wallets by End of 2015 140,000 Bitcoin-Accepting Merchants Maintained at 12 million Forecast by End of 2015 8,0003 it' TIMMS 140 000 120.000 00 - 80000 60000 • - 40.034:0 . •-• 20000 4- 0 • act", ".. i ts e t .1 + Oft 1 4. 013 \bit / 5 dr° iet) AIM 04.$3 JesI41 Fiala Ai.« OSAI ~If .W.IS LAS Oct SS »a- 14 ToldI ~art. noon. Fool<0~0 ~Chet beat Fandt son. ado no ow oink non Ind ~see :adios MI try 0noo w wean Dootosotil Wcolba Iowa maim e atrneerre krew Me low ~es. c•••••••••• • MOW OP Sall. PI MOP Mip •.• *MI Soluisi or Nei NY naniaseo ~ABM sow Bra ~MS Nib) BLOCKCHRIN ERPITRL ONE FERRY BUILDING. SUITE 255 SAN FRANCISCO. CA 94 1 1 1 [email protected] EFTA01088665 SUMMARY EILOCKCHRIN CRPITRL FIRST DEDICATED BITCOIN VENTURE FUND UNPARALLELED ACCESS TO DEAL-FLOW PROVEN TRACK RECORDS Building the Future Leaders in the Blockchain Economy BLOCKCHRIN 23 CRPITEL ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor blockchain.capital EFTA01088666