Veritaseum Short Summary NDA light.docx

Transcription

Sector
Financial Technology
Stage
Early stage
Raising
Founded
December 2013 with formal Incorporation in May 2014
Location
New York, New York
No. of Employees
Key Customers
Newspaper magnates and media moguls proffered disbelief in the early ‘90s. When was the last time you read the
classifieds, rented a Blockbuster movie or called into a radio station? As the Internet clearly showed us in the ‘90s,
when change comes… It comes fast and takes no prisoners!
“47% of all jobs will be automated by 2034, and no government is prepared.” - Economist
“In the next 10-20 years, 58% of financial advisors will be replaced by robots and AI.”-Frey and Osborne, Oxford
University
Magna est Veritas, et praevalebit! Vincit omnia Veritas!
Copyright © 2014, Veritaseum, Inc. “UltraCoin”, “Veritaseum”,
“Verit”, and “Veritas” are trademarks of Veritaseum, Inc. Patents
pending. All rights not explicitly granted pursuant to written agreement
are reserved.
___________________
Wednesday, June 4, 2014
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Market Research
Global value transfers have the inherit characteristic of having at least one intermediary (between a transaction
originator and the end-user or beneficiary), in the absence of which a transaction is not possible to execute. The
involvement of intermediaries (which is a must) involves fees which range from 1% to 4+% depending upon the nature
of value transfer transaction. For instance, a transaction involving insurance of assets requires a fee payable to an agent
or broker who helps purchase the insurance. Even if such insurance is purchased directly from an insurance company,
the cost of brokerage is built in the insurance cost. Similar is the case of purchase of stocks, transactions with banks for
(say) opening of LCs, making an investment through an asset manager, etc.
In addition, when we have intermediaries involved in a payment transaction, the time to execute transactions
increases. The more the number of intermediaries, the more is the time required proportionately. Time and cost
factors incur material friction, and has done so for centuries. The evolution of digital currencies can potentially
eliminate these factors, reducing cost of transactions to a fraction of the current cost as well as eliminating much of the
time involved.
Notably, unlike it is perceived, digital currencies will act as a global, intelligent payment platform providing innovative
payment options rather than replacing fiat currencies.
For the purposes of this paper, we will characterized value transfers as actual payments. Payments, as used in this
sense, differ from simple payments facilitated by payment processor such as Visa, Mastercard, Bitpay or Coinbase.
Involvement of intermediaries
Almost all financial transactions involve participation of one or more intermediaries. These intermediaries either help
introduce the parties entering the transaction, or facilitate (in one form or the other) the execution of the transaction.
Over the past few decades, intermediaries have become an inseparable constituent of a financial transaction, be it a
bank, an exchange, an insurance broker / company or an asset management company.
Below are a few illustration of involvement of intermediaries in different types of transaction
Contact Reggie Middleton:
[email protected] or 718.407.4751
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For centuries, it has been commonly accepted that most financial transactions simply won’t happen without the
involvement of intermediaries. In fact, some transactions may have more than one intermediary, such as reinsurance,
asset management, etc. – literally compounding the cost, time, inefficiencies and friction required in the execution of
transactions.
Average Cost Involved in Payment Transactions (% of transaction value)
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4.50%
4.00%
4.00%
3.50%
3.00%
3.00%
2.50%
2.00%
2.00%
2.00%
1.50%
1.50%
1.00%
0.75%
1.00%
0.50%
0.00%
LC
Forex
Asset Management
Future
Options
Insurance
Ultracoin
Average Time From Opening of Account to Settlement of 1st trade in Value Transfer (Payment Transactions) (no. of
days)
25
21
21
21
20
15
15
10
7
5
1
-
LC
Forex
Asset Management
Future
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Options
Insurance
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Role of digital currencies – Not a currency but an “intelligent transaction” platform
The emergence of digital currency has precisely been due to the time, cost and risk factors associated with fiat
currencies. What matters in today’s business world is the velocity of money, i.e. the pace with which money travels
from an originator of a financial transaction to the person at the other end. Unfortunately the expansion of the global
central banks’ balance sheets in an effort to save profligate actors who normally would have succumbed to insolvency
has also stymied the velocity of money in truly value creating transactions. It is ironic that that which was designed to
rescue banks is also that which is threatening banks’ traditional payment platforms. This has led to emergence of digital
currencies like Bitcoin, Litecoin, Namecoin, etc. Key characteristics of digital currencies such as – zero storage cost, high
security, trades that can’t be blocked or confiscated, etc. – have made these currencies widely preferable as alternate
payment currencies to those who are truly in the know.
However, notably the real advantage of digital currencies can emerge when these are used as a complete value
transaction (payment) platform rather than just an alternate payment currency to be churned by payment processing
entities. If there emerges a platform that can be used to buy/sell anything, or do any type of financial transaction within
seconds without involving an intermediary (additional costs, risk exposure, friction and delay), the potential for digital
currencies can truly be unleashed – with a devastingly effective “Creative Destrcution” wave unleashed upon the entire
financial sector and all of those who use it.
We believe that digital currencies like Bitcoin could be used as a software protocol through which one could rebuild the
payments industry in ways that are better and cheaper. There is already ample evidence that a number of Bitcoin
enthusiasts that are building systems to exchange money through the Internet securely at a much lower cost compared
to wire transfers or bank remittances. That mere scrapes the surface. True, comprehensive, intelligent, scriptable value
transfer is the wave of the future that is already here in Veristaseum’s UltraCoin!
What type of transactions could be possible from a “Smart” digital platform like
UltraCoin?
Specialized digital payment processors are stepping in to cash-in the opportunity available in the digital currency
payment sphere. Well funded start-ups such as Coinbase, Bitpay and Circle convert digital currencies like Bitcoin into
fiat currency for a fee. Utracoin, as a digital payment platforms, enables any and all financial transactions that can
possibly be done by global banks, asset management companies, hedge funds, investment managers, insurance
companies and other participants in the global financial industry. Examples include:
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Issuing a letter of credit (in a few minutes)
Secure volatility in any currency, stock, index, commodity, options/futures
Diversify risk in an investment portfolio
Act as an investment manager
Replacing securities brokerage houses
Replacing commodity dealers
Protect Intellectual Property
The public beta of the application is due for release in 4 to 6 weeks.
Benefits of such an application include

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Scalability: Scalable to any level to act as a comprehensive payment technology
Elimination of intermediaries: Remittance through simple and secure transfer of value online, without
intermediaries, including the credit card networks, card-processing companies, brokerage firms, merchant,
commercial and investment banks.
Low transaction fee: Efficiency and low cost in comparison to legacy payments tools will ultimately prove too
tempting for merchants, individuals, and business-to-business billing
Protection against volatility: Ability to hedge value of any asset against another asset
Eliminates risk of fraud: No disclosure of information of the parties to the transaction, Zero Trust Smart
Contract characteristics
Impact of growth of Digital Platform
Digital Platforms shall flourish on the back of their ability to power transactions that are extremely low-cost and easily
possible across national borders with no friction. With these advantages, these have the ability to significantly impact
other forms of payments, value transfer transactions, cash, credit cards, and money transfers.
As explained above, a number of digital payment platforms have already stepped-in while a larger numbers are
believed to enter the sphere soon. If we look at the data recently released by BI Intelligence, Business Insider's paid
research service, we can see that daily average transactions for Bitcoin are now almost 1/12th of the transactions
executed by Western Union.
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As more number of digital platforms such as UltraCoin emerge, the share of digital currencies in the global payment
industry is set to increase as these platforms take payments from just merchants receiving compensation for goods to
investment, risk management, insurance, asset management, brokerage, etc.
What does it mean for the conventional payment system?
The conventional payment system that works under a centralized environment could see a major impact on its players
in terms of loss of business AND margin compression. Imagine if one could transfer millions of dollars to another
country at a fraction of the cost he pays for remittance through the conventional system. Next, imagine the ability to
program said transfer to enable the monies to take the contractual form of any asset, security, fixed income asset,
commodity or derivative the payor can conceive, with near zero counterparty risk. What would his preference be? The
factors like cost, time, security, fraud-less transactions, protection against volatility are more than enough for a user to
select digital currency payment system. In addition, the increasing acceptance of digital currency as a mode of payment
by merchants will be dramatically increased by the use of this platform as a trading, commerce, investment
management, and risk management vehicle - further bolster the use of these payment systems. With the pace with
which the digital currency payments are emerging, the global payment system is set for a major overhaul. Big
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companies like Visa, Mastercard or even banks like JPM, BOA who earn billions in credit/debit card, asset management,
brokerage and risk management fees are seen comforming to this new way of doing business or going the way of the
classified ad, Blockbuster DVD rental or compact discs. No matter what, a major overhauling of their current fee
structures are in the cards. Companies like Paypal, Western Union will have to think innovatively to counter the pace of
digital currency payment. A few weak players may see their exit in less than 2 years if they are not able to withstand
fierce competition in fees charged to customers.
What We Do @ Veritaseum
A promise is a commitment, made now, to perform an action in the future. All business transactions are essentially a
string of promises. The basic business transaction consists of two promises - the promise to deliver a product/service
and the promise to pay for said delivery. Business can get much more complex by involving intricate, interwoven
models of transactions, which are essentially just layered… promises.
Significant resources are spent ensuring people and business entities keep their promises to pay, to perform, to honor
their words and contractual agreements. Due diligence, research, lawyers, litigation, mediation, arbitrators, escrow
agents are all methods of doing such, but historically a promise has always been just a commitment to perform a future
act, and nothing more.
Veritaseum has discovered a way to codify promises in the actual money used in a business transaction. We make
and sell… “Unbreakable Promises”!
How we do it
We use an essential portion of the Bitcoin protocol, the Blockchain, to enable businesses of any size to encode and
store their “promises”, or obligations and rights directly within the currency used for the business transaction. The
Blockchain is a huge peer-to-peer ledger which creates and records all digital currency transactions using incorruptible
mathematics enshrined in computer code. With the aid of cryptography it uses the computing power of the global
public. It is owned by no one, in no one place, and so cannot be hacked by criminals or seized by governments. The UK’s
Daily Telegraph quotes: ‘[the blockchain] has devastating potential… it represents a technological breakthrough that
could sweep into obsolescence everything from social networks to stock markets... and even governments’.
Since the blockchain stores aspects of the transaction, and is as immutable as math itself, all middlemen historically
used to transact, exchange, store, adjudicate, secure or deliver are eliminated and no longer needed. The technical
term for this occurrence is…
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Sans intermediaries and middlemen, entities of all sizes (from the kid with the lemonade stand on the corner to the
global manufacturer to the multinational bank) can now conduct business at a fraction of today’s cost.
Veritaseum UltraCoinTM technology is directly comparable to the internet protocol which created (nearly overnight)
global business monoliths and a myriad array of new multi-billionaires.
The benefits of this decentralized system using our patent pending, downloadable ‘Zero Trust Smart Contracts’, are
slashed costs, shorter execution time, improved security and lower risk by the potential removal of all middlemen.
About the Company and the Product
VeritaseumTM, Inc. is a C corporation formed to exploit modern cryptography in the field of finance, economics and
value transfer transactions. UltraCoinTM, a patent pending technology invented by the company’s founder, globally
renown analyst and investor Reggie Middleton, harnesses the abilities of recent discoveries in cryptographic science to
literally enable programmable money.
Using that programmability, Veritaseum’s UltraCoinTM transforms traditional contracts and agreements by embedding
the terms directly into the currency itself. As a result, where Veritaseum’s UltraCoin is used to conduct transactions,
any transactions, the money will perform according to the terms agreed to by the parties, and only as agreed. It cannot
be spent in any other fashion. This is true from anything as simple as a purchase of a widget from a retail store where
the widget must be delivered to person B on time X and in Y condition or person A does not get paid, to considerably
more complex transactions such as global stock, currency, and commodities exchanges, letters of credit, insurance
underwriting, or the trading and licensing of intellectual property.
This has quite profound implications for nearly every interaction where value is transferred. It virtually eliminates the
ability to default or defraud at a fraction of the cost of more traditional and less reliable mechanisms. Quite frankly, it
eliminates the need to have to trust your counterparty in a transaction. This is known as a ZeroTrust transaction.
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Key benefits summarized:
Attributes
■
Veritasuem’s UltraCoinTM “Zero Trust Smart Contracts” embedded in “Programmable Money” enables
entities of any size to trade value as if they were a global bank!
■
They can do so with NO COUNTERPARTY RISK!
■
They can do so with NO CREDIT RISK!
■
They can do so without KNOWING or TRUSTING the other party!
Abilities
Through Veritasuem’s UltraCoinTM “Zero Trust Smart Contracts” practically any entity, from the child selling
lemonade on the corner to a multi-national manufacturer or global service concern, can now implement
(quickly, easily and autonomously):
● Loans without banks
● Trades without brokers
● Contracts without lawyers
Ease of use
● Users download free software “wallets” using any modern computing device, from desktop to
smartphone, through which they design the terms of their transactions (or contracts) via a simple
interface within minutes.
● The wallets are funded with the programmable money through the click of a button, and the money is
easily translated into any major currency (e.g., USD, GBP, EUR, RMB) or translated into the value of
any publicly traded asset or commodity (e.g., gold, oil, stocks, bonds, pork bellies, or even real estate).
● No middle man or central agent is relied upon to hold and transfer the value of the transaction.
Counterparty risk and overhead from agents and exchanges are a thing of the past.
Management Team
Founder: Reggie Middleton, aka the Financial Nostradamus - Financial engineer,
financial analyst, entrepreneurial investor & world renown author of BoomBustBlog,
publicly called dozens of booms and busts in finance & technology including Bear
Stearns, Lehman, Research in Motion (Blackberry), Countrywide, European
sovereign debt crisis, Ireland, Facebook, Google, Apple, etc. Has won every
annual CNBC Stock Draft investment challenge for professionals – ALL of them.
Advises or advised the money center banks, global investments banks, family
offices, hedge funds and high net worth individuals.
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Contract & Architectural Engineer: Matt Bogosian aka “the Fixer” - Software
architect, practicing intellectual property attorney, 15 years of software
development, architecture, design, coding, & management with a focus on small,
nimble teams. Combines critical aspects of engineering and intellectual property
law. Practiced law with LaRiviere, Grubman & Payne, LLP, Manzanita Group and
served as Lead Software Engineer at Amazon.com, Inc., Software / QA Engineer
at Be, Inc., Senior Technologist / Client Services Lead at Grand Central
Communications, Inc., and Manager / Senior Engineer at Yahoo!, among others.
Manish Kapoor: Financial Analysis, Modeling & Forensic Accounting: Manish
Kapoor aka “the Counter”: Over 14 years in Valuation, Research, Investment
Banking, Statutory Consulting, Audit & Compliance for firms such as Deloitte &
Price Waterhouse Coopers. Manish has leads teams for leading investment
advisory firms, investment banks, hedge funds, private equity firms, portfolio
management entities and other buy-side firms in the US and Europe.
Market Overview
Veritaseum’s UltraCoin facilitates ZeroTrust Value Transfer. Value is a very pervasive concept. To keep things relatively
simple for the sake of this document, we can limit the market to our slogan (note, all numbers are on a global basis).
❖ Loans without banks – Syndicated loans $3,200,000,000,000
❖ Trades without brokers
➢ Bond markets = $157,000,000,000,000
➢ Stock markets = $57,000,000,000,000
➢ Forex markets DAILY TURNOVER = $3,980,000,000,000
❖ Contracts without lawyers – difficult to quantify, but not having to see their invoices = PRICELESS
Just Scraping the Surface of the Value Chain, there’s a potential market in excess of $220,000,000,000.
Value transfer encompasses so much more than just the bank and Wall Street transactions referenced above. UltraCoin
will disintermediate those in: Real Estate, Health Care, Estate Planning, Import-Export, Intellectual Property, and much,
much more…
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Problems Solved
All transactions (contracts) amount to what are essentially promises to perform between two or more parties.
Promises can be (and often are) broken. A significant amount of the value of a promise (or contract) is spent
in trying to assure it won’t be broken, (e.g., lawyers, courts and legal fees, escrow agents, insurance, due
diligence, middlemen and go-betweens, etc.).
UltraCoin allows promises to be translated into predictable, enforceable outcomes. Thus, when a promise or a
contract is made using UltraCoin, it is no longer made with the desire, gamble and/or hope that it will be kept
some time in the future. It is made as immutable fact that the transaction will be executed exactly as agreed.
The ability to make a promise, or create a contract as future fact versus present desire is undeniably attractive
to all participants in all transactions of value.
Business and Revenue Model
Veritaseum UltraCoinTM “ZeroTrust Smart Contracts” are available through a quick, free software download to
the Windows PC, Mac, Android or iOS tablet or smartphone. The use of the wallet requires no login,
registration or sign-up, nor does it require a purchase (which dramatically lowers friction and barriers to
customer user).
Once the end user has designed a contract, the system finds a counterparty for the contract, the two parties
agree to do business with each other, and funds are cryptographically committed and then exchanged per the
contract. It’s at this point that Veritaseum extracts a fee for the deal. The fee is a logarithmically scaled
percentage of the transaction amount (starting at 1% and scaling down to mere basis points). It is sent directly
to the Veritaseum servers at the onset of the transaction. Veritaseum, as it is constructed and to the best of
management’s knowledge, does not fall under the purview of any US or European financial regulator.
The system will be marketed to individual investors, traders, speculators, businesses, manufacturers, global
corporations, banks, hedge funds, any entity who has natural exposures it wishes to hedge, and any other
entity wishing to facilitate value transfer and trade without middlemen (no banks, trading houses, brokerage
firms or agents) – thereby bringing disintermediation full circle.
The Veritaseum Competitive Advantage
● Our Product
o First mover advantage - we’re the only one with a functional prototype, not to mention the
only one preparing to bring a product to market
o Several patents are pending for a suite of our technologies and processes
● Our Position
o No legacy products & conflicts - we can disintermediate through slashing margins of
competitive products without cannibalizing our own business
● Our Team
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Renown CEO, financial engineer, investor, analyst and media personality - proven to have
accurately predicted nearly all of the booms and busts of both the finance and technology
markets over the past decade
o World class engineering team with extensive knowledge in legal and digital contracts, as well
as world class experience inside companies, like Amazon, Yahoo, Google, and more
o An actual, experienced financial analyst that assists in designing financial products, in lieu of a
developer who attempts to recreate products from text books
o
Veritaseum plans to launch its beta product within 30 days, which will be capable of generating revenues. The
beta will be launched into one of the most rapidly growing industries of the millennium, with the cryptographic
payment processors universally experiencing a sustainable and increasing growth rate of over 6% per month
and high double digits Q on Q, with triple digit year-over-year growth.
We feel Veritaseum is ripe for a strategic partner to approach us before the end of the calendar year, likely
before we’re able to go for our Series C round. Strategic partners include payment processors, global banks,
and innovative technology companies such as Google, Facebook, Microsoft or Apple.
As we build out our business, penetrate the markets and increase our financial valuation, an eye on liquidity is
mandatory. The following are actual examples of the private equity market valuation and pricing of some of
our contemporaries:
Revenue Multiple
(assigned by recent funding rounds)
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Note: Revenue multiple for each year is benched on the Enterprise Value (EV) as per recent funding as shown
below:
Table 7- Valuation
Company
Calculated Valuation (US$)
Bitpay
160,000,000
Coinbase
140,000,000
Circle
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85,000,000
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Media Exposure
1. Reggie Middleton Intro
2. How Reggie Middleton's
Start-up Patented The
Future of Global Finance!
3. Reggie Middleton on
Wikipedia
4. Who is Reggie Middleton?
5. Bitcoin is not just digital
currency. It's Napster for
finance.
6. Reggie Middleton's
UltraCoin @ NYC
CryptoCurrency
Convention
7. Reggie Middleton Wins
CNBC Stock Draft for the
2nd time in a row - with
the same stock
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Veritaseum Short Summary NDA light.docx

Transcription

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