1Mby1M Virtual Accelerator Investor Forum: With Greg Borchardt of Caerus Ventures (Part 4)

Sramana Mitra: I’ll tell you where I am a little bit uncomfortable with what you’re saying. I don’t feel a token angle of it. Your point is well-taken that somebody with a proven business model is a more interesting scenario than a concept financing or concept ICO. Why do I want tokens in this ecosystem and this exchange?

There are certain businesses that are very token-friendly businesses where the tokens will naturally float around and change hands. There are certain businesses that have that characteristic. There are others that don’t have that characteristic which in my opinion should not be doing ICOs. In this case, I’m struggling to understand the token angle.

Greg Borchardt: There are two separate tokens that the company is releasing. I don’t work for the company. I’m an investor. I’m not on the Board. However, there are two things to look at. One is the security token. It gives investors the ability to invest in the company and participate just as if it were investing in a piece of equity.

Sramana Mitra: That sounds more like equity crowdfunding than ICO.

Greg Borchardt: From a security token perspective, that’s how security tokens work. It is similar to an equity stake. From a utility token perspective, that’s much different. A utility token gives the user access to a database that is built on a Blockchain architecture. It’s two different things. There are different values to different people within that.

Sramana Mitra: Based on this investment thesis, if you look at the last 12 months of deal flow, what trends are you seeing? What kind of connected hardware ideas are out there that throw light on emerging trends?

Greg Borchardt: We’re starting to see technology become more and more disruptive. For example, we’re seeing some interesting agricultural tech products in the retail space. Smart cities is a larger and all-encompassing space. Some of the related software that goes across some of these industries such as whether it’s computer vision or AR/VR.

We’re starting to see a lot of different deals through M&A where non-traditional tech companies are starting to acquire tech companies. I think it was announced yesterday that Walmart bought Spatialand. Most people think that’s going to be related to the in-store shopping experience. These are companies that maybe weren’t doing tech acquisition in the past. We’re starting to see companies from a variety of non-tech industries either invest in or acquire hardware tech companies and even some software tech companies as well.

Sramana Mitra: You mentioned agriculture. Are we talking about monitoring kinds of use cases? What are the trends in agriculture and construction? What kinds of use cases are we seeing?

Greg Borchardt: In agriculture, we’ve seen a substantial amount of companies doing monitoring. That can be for soil quality, moisture levels, others with different types of sensors that are sensing disease, amount of sunlight or things like that. They’re connected to the cloud so that they become somewhat more predictive. They may sync up with what the weather patterns have been over the time that they’re collecting the data and then look forward to what is the weather forecast. What recommendations are being made to the farmers?

We’ve seen a company that is focused more on the golf course industry, which is one of the largest water users in the nation and in the world. They’re trying to help the golf course owners maintain the course as well as possible. Beyond that, there is somewhat of an eco friendly play there, because they can maximize that water use efficiency as well as the chemical use efficiency. Things like that are interesting to us.

Sramana Mitra: It sounds like the overriding thread tying together all these use cases is that there is a sensor that is monitoring a bunch of stuff collecting data and throwing that to the cloud. Then there is a predictive analytics kind of application on the software side.

Greg Borchardt: Exactly. There’s infrastructure around that whether it’s the rollout of 5G and how quickly people think that will or will not happen and various things that need to be put in place to determine whether this is something whera a farmer can be the owner of the usage of in a sense that they may own the drone and it’s an autonomous drone that they can put outside each morning or once a week, or it can fly a predetermined path and bring back all the data. Currently, we see more of a model where it’s almost more of a consulting basis where you have companies go into larger farms on a monthly basis.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Greg Borchardt of Caerus Ventures
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