BLOCKCHAIN CAPITAL, LLC CCP II, LP OCTOBER 2015 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 1 TECHNOLOGY THOUGHT-LEADERS ARE CONVINCED Bill Gates: “Bitcoin is be0er than currency…a technological tour de force.” Ben Bernanke “[Virtual Currencies] may hold long-‐term promise, parDcularly if the innovaDons 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 potenDal to do something like change the world.” Al Gore “I’m a big fan of Bitcoin…RegulaDon of money supply needs to be depoliDcized” 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.” ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 2 INCUMBENTS EMBRACING THE BLOCKCHAIN NASDAQ -‐ partnered with Chain to launch private company exchange “As blockchain technology conDnues 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, Ci< -‐ launched “Ci<coin” project “Blockchain technology not only has an opportunity to transform financial services but also extend far beyond payments to new use-‐cases and applicaDons across industries,” -‐ Debby Hopkins, Chief InnovaDon Officer at CiD Santander -‐ published: “Fintech 2.0 Paper: Reboo<ng Financial Services” “Blockchain technologies could reduce banks’ infrastructural costs by $15-‐20bn a year by 2022” Standard Chartered “The banking industry is starDng to see the many potenDal benefits of its underlying technology. For banks, the blockchain has the potenDal to become a technology model for a low-‐cost and transparent transacDon infrastructure.” -‐ Anju Patwardhan, Chief InnovaDon Officer Royal Bank of Scotland -‐ announced a $3.5 Billion technology revamp over next 3 years “I don’t know what’s going to succeed. What I’m certain of is that we are going to see blockchain soluDons, peer-‐to-‐peer soluDons emerging in our industry and we want to be close to that development.” -‐ Simon McNamara, Chief AdministraDve Officer at RBS ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 3 THREE TECHNOLOGY EVOLUTIONS OF DISRUPTION 1995 2015 1975 The PC Era The Internet Era The Blockchain Era Semiconductor Technology TCP/IP Protocol Bitcoin Protocol ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 4 EXPERIENCED TEAM IN INVESTING BART STEPHENS BRAD STEPHENS BROCK PIERCE PAUL STEPHENS EXPERIENCE • Stephens Inv. Mgmt. • Ivanhoe Capital • ETrade Group • Princeton • Stephens Inv. Mgmt. • Fidelity Ventures • CSFB • Furman Selz • Duke • Chairman of the Bitcoin Foundation Board • Founded 15x Startups • Raised > $200M • Invested in > 25x • Robertson Stephens & Co. • RS Investments • Duke Endowment • UC Berkeley Endowment Startups RECOGNITION #2 U.S. Long/Short Hedge Fund $500 Million AUM 2.5x Venture Fund, 11.5% IRR Founded 8 crypto currency startups and often referred to as the “father of digital currency” 40 Years in Silicon Valley Investment Management and Banking Leaders in Technology Investing Incubated and Founded Dozens of Startups 100’s of Silicon Valley Investments Absolute Return Magazine 2004 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 5 SUCCESSFUL TRACK RECORD OF HOME RUNS PRIVATE PUBLIC 2014 25.0x 2014 77.0x 2004 8.1x 2009 39.0x 2008 6.9x 2010 4.6x 2008 5.0x 2011 5.1x 2014 TBD 2007 3.4x ( 7 IPOs and 13 Acquisitions ) ( 17 Public Acquisitions ) Private and Public Exits through Multiple Market Cycles ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 6 BROCK PIERCE - CHAIR OF THE BITCOIN FOUNDATION INDUSTRY LEADER AND SPOKESPERSON SERIAL ENTREPRENEUR IGE (2001-2007) - Merged with ItemBay Zam (2004-2012) - Sold to TenCent Singularity University IMI Exchange (2004-Present) Xfire 2.0 (2011-Present) Playsino (2011-Present) GoCoin (payment processor) Blade Financial (Bitcoin debit card) Coin Congress (conference) Repeat Entrepreneur and Digital Currency Visionary ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 7 PARTNERS AND ADVISORY BOARD ALISON DAVIS | Director: Royal Bank of Scotland, XOOM, Fiserv 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 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 8 CRYPTO CURRENCY PARTNERS I, LP The First Dedicated Bitcoin Venture Fund - 30 Investments, Fully Deployed ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 9 CRYPTO CURRENCY PARTNERS II, LP Current portfolio - both contributed and new investments ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 10 PIPELINE & PROCESS 600+ Business Plans CONSUMER 200+ Meetings • Exchanges • Remittance • Digital Wallets • Deep Global Domain Knowledge 37 Portfolio Companies INFRASTRUCTURE • Side Chains • Blockchain Apps • Mining ENTERPRISE • Multi-sig workflow • Extensive Networks • Proprietary Deal Flow • Primary Investigative Due Diligence • Exhaustive Management/Industry Interaction • Recruiting • Business Development • Capital Introduction • M&A HISTORIC VENTURE RETURNS • Payment Gateways • Financial Tools ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 11 ACTIVE BLOCKCHAIN VENTURE INVESTORS Blockchain Capital has co-invested with these leading VCs ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 12 CCP II - 8 CONTRIBUTED INVESTMENTS DATE INVESTED $ AMOUNT DETAILS BitGo June ’14 $75,000 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 $70,000 Series A preferred LedgerX July ’14 $50,000 Series A preferred BitAccess September ‘14 $25,000 Note discounted to Series A preferred BitNet October ‘14 $75,000 Series A Preferred TOTAL $470,000 (current value ~ $815,000… 1.7x) General Partners contributed co-investments at cost to CCP II ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 13 CCP II - 12 NEW INVESTMENTS MADE DATE INVESTED $ AMOUNT DETAILS 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 TOTAL $2,100,000 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 14 CCP II - STRATEGY AND MAKE-UP EXPOSURE Diversified Sector-specific FUND POSITION ALLOCATION 50% 30% 20% New CCP II investments Reserves for CCP II follow-on rounds Option to use CCP I’s follow-on rights INVESTMENT STRATEGY Leverage our network and industry expertise to find 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 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 15 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 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 16 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 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 17 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 Business license Business Incorporation/dissolution HR Records Supply chain mgmt Business transaction records Accounting records Software licenses Business Ownership records Regulatory records Trademarks Spam Filters Hotel room keys Criminal records Passports Death certificates Voter IDs Building permits Health/safety inspections Non-profit records Court records Gun permits Voting Global trade network Loyalty Points Vouchers Domain names Betting records Movie Tickets DRM: Music/movie/book license GPS network identity ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 18 OPPORTUNITES FOR BLOCKCHAIN ADOPTION Micro-Transactions All Global Media Companies Financial Settlement Stock, Bonds, Derivatives, etc Remittance Hot Spots USA, UAE -> India, Mexico, Philip. Early-Adopt Millennials USA, EU, AU Currency Controlled Markets Korea, S. Africa, China, India Unstable Markets Africa, Venezuela, Argentina ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 19 INDUSTRY GROWTH: 2014 to 2015 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 20 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. ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 21 HYPER-GROWTH- 2013 to 2015 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 22 SUMMARY FIRST DEDICATED BITCOIN VENTURE FUND UNPARALLELED ACCESS TO DEAL-FLOW PROVEN TRACK RECORDS Building the Future Leaders in the Blockchain Economy ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 23
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 the world.” “I do think Bitcoin is the first encrypted money that has the potential to do something like change 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.” BLOCKCHAIN CAPITAL ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024272¶
INCUMBENTS EMBRACING THE BLOCKCHAIN NASDAQ citi Santander Standard Chartered ** RBS The Royal Bank of Scotland IIII NYSE NASDAQ - partnered with Chain to launch private company exchange “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 Greifela, NASDAQ CEO, Citi - launched “Citicoin” project “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 Santander - published: “Fintech 2.0 Paper: Rebooting Financial Services” “Blockchain technologies could reduce banks’ infrastructural costs by $15-20bn a year by 2022” Standard Chartered “The banking industry is starting to see the many potential benefits of its underlying technology. For banks, 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 “I don’t know what’s going to succeed. What l’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 BBVA UnionBank JPMorgan STATE STREET RBC *BARCLAYS UBS BNY MELLON Bank of America Morgan Stanley CREDIT SUISSE BLOCKCHAIN CAPITAL 3 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024273¶
THREE TECHNOLOGY EVOLUTIONS OF DISRUPTION 2015 1995 1975 The PC Era Semiconductor Technology (intel) Microsoft The Internet Era TCP/P Protocol Google facebook amazon ebay The Blockchain Era Bitcoin Protocol & coinbase itBit BLOCKCHAIN CAPITAL ONE FERRY BUILDING, SUITE 255 chain Change Tip ripple SAN FRANCISCO, CA 94111 investor@blockchain.capital 4 HOUSE_OVERSIGHT_024274¶
EXPERIENCED TEAM IN INVESTING EXPERIENCE BART STEPHENS • Stephens Inv. Mgmt. • Ivanhoe Capital • ETrade Group • Princeton BRAD STEPHENS • Stephens Inv. Mgmt. • Fidelity Ventures • CSFB • Furman Selz • Duke RECOGNITION #2 U.S. Long/Short Hedge Fund $500 Million AUM 2.5x Venture Fund, 11.5% IRR Leaders in Technology Investing Incubated and Founded Dozens of Startups BLOCKCHAIN CAPITAL ONE FERRY BUILDING, SUITE 255 BROCK PIERCE PAUL STEPHENS • Chairman of the Bitcoin Foundation Board • Founded 15x Startups • Raised > $200M • Invested in > 25x Startups Founded 8 crypto currency startups and often referred to as the “father of digital currency” • Robertson Stephens & Co. • RS Investments • Duke Endowment • UC Berkeley Endowment 40 Years in Silicon Valley Investment Management and Banking 100’s of Silicon Valley Investments *Absolute Return Magazine 2004 SAN FRANCISCO, CA 94111 investor@blockchain.capital 5 HOUSE_OVERSIGHT_024275¶
SUCCESSFUL TRACK RECORD OF HOME RUNS PRIVATE PUBLIC Q RelatelQ 2014 25.0x ValueClick s/na RUPTURE ADDEPAR 2004 2008 2008 2014 8.1x 6.9x 5.0x TBD (7 IPOs and 13 Acquisitions ) tencent.com illumina US AUTOPARTS MiSILON® SYSTEMS “nCSOFT’ 2014 2009 2010 2011 2007 77.0x 39.0x 4.6x 5.1x 3.4x ( 17 Public Acquisitions) Private and Public Exits through Multiple Market Cycles BLOCKCHAIN CAPITAL 6 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024276¶
BROCK PIERCE - CHAIR OF THE BITCOIN FOUNDATION NDUSTRY LEADER AND SPOKESPERSON Money 20/20 Singularity University I MILKEN INSTITUTE ge ZAM IMI EXCHANGE WIRED TNABC CoinSummit• The INSIDE BITCOINS the future of virtual currency GOCOIN O BLADE c) COI SERIAL ENTREPRENEUR IGE (2001-2007) - Merged with ItemBay Zam (2004-2012) - Sold to TenCent IMI Exchange (2004-Present) Xfire 2.0 (2011-Present) Playsino (2011-Present) Go Coin (payment processor) Blade Financial (Bitcoin debit card) Coin Congress (conference) Repeat Entrepreneur and Digital Currency Visionary BLOCKCHAIN CAPITAL 7 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024277¶
PARTNERS AND ADVISORY BOARD ALISON DAVIS* MARY CRANSTON TERRY SCHWAKOPF MICHAEL MCADAM SIMON MCNAMARA VINNY LINGHAM BOBBY LEE NICCOLO DE MASI STEVE BEAUREGARD CHRIS PALLOTTA MATT OCKO WILL O’BRIEN CHARLIE LEE 1 Director: Royal Bank of Scotland, XOOM, Fiserv and First Data 1 Director: VISA, ex-CEO and Chair of Pillsbury Winthrop EVP: Federal Reserve Bank of San Francisco, banking supervision CFO: Union Bank (Mitsubishi UFJ Financial Group) 1 CTO: RBS, ex-CIO of Standard Chartered, BNP and Deutsche Bank CEO: Gyft (acquired by First Data) 1 CEO: BTC China 1 CEO: Glu Mobile 1 CEO: GoCoin 1 Special Advisor: MIT Media Lab, Partner: Raptor Capital 1 Partner: Data Collective 1 Co-founder: BitGo 1 Coinbase, Founder of Litecoin¶
- Chairman of the Advisory Board Built a robust team of Advisors and LPs from the Blockchain ecosystem BLOCKCHAIN CAPITAL 8 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024278
CRYPTO CURRENCY PARTNERS I, LP NAUTHY 4 BLADE AlphaPoint • bex.io [| Blockstream CIRCLE Kraken BLOCKCYPHER & coinbase LedgerX MARKETS coinsetter SFOX PEERNOVA BitFury © BitGo¶
- BCC expresscoin Gem Freshpay BitPesa chain GOCOIN shapeard xapo BITACCESS BITCOIN TELLER MACHINE Change Tip Koinify 3 ZIpzap zenBox The First Dedicated Bitcoin Venture Fund - 30 Investments, Fully Deployed BLOCKCHAIN CAPITAL 9 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024279
CRYPTO CURRENCY PARTNERS II, LP ABRA BITACCESS BITCOIN TELLER MACHINE © BitGo BitPesa Blockstream BONAFIDE Bitnet & coinbase expresscoin it Bit chain coinsetter Kraken Change Tip Gem GOCOIN OLedgerX • ripple PEERNOVA Current portfolio - both contributed and new investments BLOCKCHAIN CAPITAL 10 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024280¶
PIPELINE & PROCESS 600+ Business Plans 200+ Meetings CONSUMER • Exchanges • Remittance • Digital Wallets INFRASTRUCTURE • Side Chains • Blockchain Apps • Mining ENTERPRISE • Multi-sig workflow • Payment Gateways • Financial Tools • Deep Global Domain Knowledge • Extensive Networks • Proprietary Deal Flow • Primary Investigative Due Diligence • Exhaustive Management/Industry Interaction 37 Portfolio Companies • Recruiting Business Development Capital Introduction M&A HISTORIC VENTURE RETURNS BLOCKCHAIN CAPITAL 11 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024281¶
ACTIVE BLOCKCHAIN VENTURE INVESTORS Google ventures khosla ventures NEA. BENCHMARK¶
- DFJ Redpoint SP VENTURE PARTNERS FORTRESS greylock partners. HIGHLAND CAPITAL PARTNERS Ribbit Capital @ IDG unions ventures bUost RADAR PARTNERS PLUGANDPLAY Silicon Valley in a Boxe Foundation CAPITAL ANDREESSEN HOROWITZ FE RRE Ventures FOUNDERS FUND Y Combinator PANTERA First Round CAPITAL Blockchain Capital has co-invested with these leading VCs BLOCKCHAIN CAPITAL ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 12 investor@blockchain.capital HOUSE_OVERSIGHT_024282
CCP I| - 8 CONTRIBUTED INVESTMENTS BitGo Coinsetter expresscoin GoCoin Kraken LedgerX BitAccess BitNet TOTAL DATE INVESTED June ‘14 December ‘13 November ‘13 October ‘13 April ‘14 July ‘14 September ‘14 October ‘14 $ AMOUNT $75,000 $50,000 $25,000 $100,000 $70,000 $50,000 $25,000 $75,000 $470,000 DETAILS Series A preferred Converted to Series A at 1.5x Convert to Series A, $2.5m Cap Converted to Series A at 4.5x Series A preferred Series A preferred Note discounted to Series A preferred Series A Preferred (current value ~ $815,000… 1.7x) General Partners contributed co-investments at cost to CCP I| BLOCKCHAIN CAPITAL 13 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024283¶
CCP I| - 12 NEW INVESTMENTS MADE DATE INVESTED PeerNova BlockStream ChangeTip Bonafide BitPesa Coinbase itBit Ripple ABRA Stem Chain Gem September ‘14 October’14 November ‘14 November’14 December ‘14 December ‘14 January ‘15 March ‘15 July ‘15 August ‘15 September ‘15 September ‘15 TOTAL BLOCKCHAIN CAPITAL $ AMOUNT $50,000 $100,000 $250,000 $50,000 $100,000 $200,000 $250,000 $250,000 $100,000 $250,000 $250,000 $250,000 $2,100,000 DETAILS Converted to Series A preferred Series A preferred Series A preferred Note discounted to Series A preferred Note discounted to Series A preferred Series C preferred Series B preferred Series A preferred Series A preferred Note discounted to Series A preferred Series C preferred Series A preferred 14 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024284¶
CCP I| - STRATEGY AND MAKE-UP EXPOSURE FUND POSITION ALLOCATION INVESTMENT STRATEGY Diversified Sector-specific 50% New CCP Il investments 30% Reserves for CCP Il follow-on rounds 20% Option to use CCP I’s follow-on rights Leverage our network and industry expertise to find 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 BLOCKCHAIN CAPITAL ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024285¶
CCP || - SUMMARY OF TERMS FUND TARGET $10-15M TERM 6-8 Years FEE/INCENTIVE 2.5% / 25% GP CONTRIBUTION +5% Fund or +$1 m INVESTMENTS 25 ($100k - $500k per deal) STRUCTURE 4 x 25% capital calls, BTC Accepted BLOCKCHAIN CAPITAL 16 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024286¶
CCP || - SERVICE PROVIDERS ADMINISTRATION / CFO Kranz & Associates LEGAL Sidley Austin TAX / AUDIT Crawford Pimintel BANK CUSTODIAN Silicon Valley Bank Merrill Lynch BTC VAULT Xapo & BitGo BLOCKCHAIN CAPITAL 17 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024287¶
USE CASES FOR BLOCKCHAIN TECHNOLOGY Financial and Records Legal / Health / Education Bitcoin Private Equities Bonds Public Equities Shareholder Voting Remittance Crowd-funding Spending Records Micro-payments Commodities Trading Records Derivatives Mortgage/loan records Digital Coupons Servicing records Micro-charity Smart Contracts Signatures/identity Degrees Wills Genome data Trusts Licensing Medical Records Escrows Delivery records Arbitration Grades Patents Copyrights Certifications Academic Credits Public Records Commercial / Media Land titles Business license Birth certificates Vehicle registries Business Incorporation/dissolution Business Ownership records Criminal records Passports Regulatory records Death certificates Voter IDs Building permits Health/safety inspections Non-profit records Court records Gun permits Voting HR Records Supply chain mgmt Business transaction records Accounting records Software licenses Trademarks Spam Filters Hotel room keys Global trade network Domain names Betting records Loyalty Points Vouchers Movie Tickets DRM: Music/movie/book license GPS network identity BLOCKCHAIN CAPITAL 18 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024288¶
OPPORTUNITES FOR BLOCKCHAIN ADOPTION B Micro-Transactions All Global Media Companies Financial Settlement Stock, Bonds, Derivatives, etc Remittance Hot Spots USA, UAE -> India, Mexico, Philip. Early-Adopt Millennials USA, EU, AU Currency Controlled Markets Korea, S. Africa, China, India Unstable Markets Africa, Venezuela, Argentina BLOCKCHAIN CAPITAL 19 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024289¶
INDUSTRY GROWTH: 2014 to 2015 Key Bitcoin Adoption Metrics Commerce Wallets Merchants Merchants’ annual revenue ($bn) ATMs Unique bitcoin addresses Industry All-time VC investment ($m) Number of VC-backed startups Media Mainstream media mentions Technology Network hash rate (billion/second) Valuation Bitcoin market capitalization ($bn) June-15 9,345,510 100,000 187 426 261,770 $832 113 371 Quarterly March-15 8,457,207 88,000 187 374 203,189 $687 105 458 Q2/Q1A Q1/Q4A 351,177,610 346,028,956 $3.8 $3.4 11% 14% 0% 14% 29% 21% 8% -19% 1% 11% 14% 7% 4% 9% 29% 50% 15% -10% 11% -22% Year Ago June-14 5,467,263 65,640 30 126 136,152 2x 2x 6x 3x 2x $252 58 3x 2x 1035 -64% 104,506,281 3x $8.0 -53% Jata sources and notes: CoinDesk, Blockchain.info, BitcoinPulse, Github, Coin ATM. Radar. Figures are cumulative from start of records, except uniqu itcoin addresses and media mentions, which are figures for the quarter ending that month. Number of VC-backed startups and VC investmen unadjusted for closed companies: Melotic, Buttercoin, Bitinstant, and TradeHill. State of Bitcoin Q2 2015 • CoinDesk 7 BLOCKCHAIN CAPITAL 20 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024290¶
CASE STUDY: Change Tip 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, Googlet, Tumblr, and Youlube. We believe that Change Tip’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 100k ChangeTip Sum of Social Accounts & Sum of Users & Sum of Tips 60k 20k Ok Mar ‘14 Apr “14 May ‘14 Jun ‘14 — Sum of Social Accounts Jul ‘14 Date — Sum of Users Aug “14 Sep’14 Oct “14 Nov “14 — Sum of Tips DataHero BLOCKCHAIN CAPITAL 21 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024291¶
HYPER-GROWTH- 2013 to 2015 Github repository references Number of daily bitcoin transactions 6000 5000 4000 3000 2000 1000 PayPal 220,000 tx 200,000 tx 180,000 tx 160,000 tx 140,000 tx 120,000 tx 100,000 tx 80,000 tx 60,000 tx 40,000 tx 20.000 tx Jun-11 Mar-00 Mar-13 Jun-15 Forecast for Total Bitcoin Wallets by End of 2015 Maintained at 12 million 1º - 0 56060 Nov-11 Jun-12 Jan-13 Aug-13 Mar-14 Oct-14 140,000 Bitcoin-Accepting Merchants Forecast by End of 2015 160,000 140,000 120,000 100.000 80.000 60.000 40,000 20,000 R° - 0.96195 Apr-15 Jan-13 Agr13 J4-13 0d-13 Jan-14 Aor-14 MINA Oct-14 Jan-15 Apr-15 J-15 0c1-15 Jan- N Total Willlets —=-==• Farecaited Walets Dura Soce end note a win and on et tema ata da ela e ite Ate Saias Mod Bian State of Bicon 01 2015 E ConDesk Sponsorod by Gem 53 Total merchants …== Forocasted merchants State of Bitcoin 2015 E ColnDes BLOCKCHAIN CAPITAL 22 ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital HOUSE_OVERSIGHT_024292¶
SUMMARY BLOCKCHAIN CAPITAL FIRST DEDICATED BITCOIN VENTURE FUND UNPARALLELED ACCESS TO DEAL-FLOW PROVEN TRACK RECORDS Building the Future Leaders in the Blockchain Economy BLOCKCHAIN CAPITAL ONE FERRY BUILDING, SUITE 255 SAN FRANCISCO, CA 94111 investor@blockchain.capital 23 HOUSE_OVERSIGHT_024293¶