Ciaran Hynes, COSIMO Ventures
In our next CEO Q&A, Ciaran Hynes, COSIMO Ventures, speaks about recruiting top talent and dealing with information overwhelm.
My top priority is to find promising deep technology companies in which to invest, and to grow them with the appropriate management teams and investment partners. When building the right network both here and in the United States, I ensure an effective alignment between our investment goals at COSIMO and the goals of our prospective portfolio companies and investment partners. My main goal is to launch COSIMO X, our first security token venture fund, later this month and for our portfolio companies to advance to the next funding stage – whether that’s a Series A or an ICO (initial coin offering). Another goal, which we have been pursuing for some time now, is the establishment of a new, global digital currency through one of our portfolio companies. As one of the CEOs of COSIMO Ventures, a major challenge I face is apportioning my time across the variety of projects that we are working on. Another is finding the right talent for our portfolio companies and the right co-investment partners to fund them. We do a lot of work in the blockchain space and, because it’s still a nascent field, there are not many experienced blockchain engineers or business developers to go around. Due to our hands-on, incubation model, this does not just become a burden for our portfolio companies, but for COSIMO as well. We aim toward balancing the right level of autonomy with the right level of support for our portfolio companies to strike the perfect ratio that each company needs to succeed. We often find ourselves recruiting top talent and allowing management teams to focus on doing what they do best: growing their business. A separate, but related challenge is staying on top of the firehose of information within the deep tech sector. Development is happening so fast and new information is coming out so rapidly that it can be overwhelming. I need to filter through all the noise to get to the really good stuff that can be useful in my day-to-day role. I have always been driven to be a globally successful entrepreneur. Everyone at COSIMO lives by this same mantra of achieving big goals and all have the drive to make it happen. Every day my co-founder Robert Frasca and I are motivated towards achieving our goal of being a true global venture firm that is at the forefront of the new blockchain and deep technology revolution. We encourage our team to this share the vision of being a future leader and then we all work together to make it a reality. The first challenge is that venture is moving away from the traditional venture capital model and towards a security tokenized fund model, which gives investors the very attractive option of much greater liquidity. But it’s a pioneering model; it hasn’t yet been done successfully so we’re really at the very beginning of a whole new world of venture capital – one we not only aim to be a part of, but to lead. The second challenge is that, as a result of the industry becoming tokenized, a lot of companies that would have traditionally gone to venture capital firms for funding are now able to raise capital independently in the form of initial coin offerings (ICOs). This has the potential to lessen the market demand for venture capital firms which has been high in recent years. Of course, COSIMO has adapted to this potential threat and incorporated the ICO model into its investment process in an effort to turn this challenge into an opportunity. A third challenge, mentioned previously, is the disconnect between the education that is available in the workforce with regard to blockchain, deep tech, AI, machine learning, and cybersecurity, and that which is needed to scale companies properly. It is competitive in the short-term to find the right talent and expertise to grow emerging companies into billion-dollar enterprises. The tokenization of venture funds is one of the first of many new trends – as is the emergence of ICOs. With this, we have seen a flood of individual investors enter into early stage Angel backed deals as institutionalized venture firms move toward later stage deals – Series A and beyond. One of the most significant implications of this trend is the emergence of a material gap between Seed funding and Series A funding. While valuations remain relatively high, fewer deals are being done – investments are larger and companies getting funded are becoming fewer. As such, there is this major hurdle in trying to get a company from Seed or Late Seed to Series A funding. This is precisely where COSIMO can step in to bridge the gap and give promising companies between Seed and Series A the support they need to reach their next inflection point. I would really like to see clarification at a global level on the regulation of tokenization. Distinguishing between a utility token, a security token, and a digital currency from a regulatory perspective is critical to the legitimate growth of this space. G20 countries must establish clear and firm stances on the digitization of assets so that individual and retail investors alike can understand exactly how to conduct themselves within the blockchain and cryptocurrency space both locally and internationally. Yes, there is a lack of expertise in blockchain from an engineering perspective, a business development perspective, an operational perspective, and a product perspective. There is also a shortage in true artificial intelligence expertise, particularly on the engineering side, and in the area of cybersecurity. Technology is moving quicker than the educational system can keep up with. Blockchain is truly a revolution – just as the internet was a revolution. But the problem is that blockchain is moving ten times faster than the internet did and the educational system is struggling to keep up with such a rapid pace. Our strategy developed after both of those crises so it wasn’t directly affected or influenced by either. Our strategy was very clear then and is very clear now – to work with the best companies in deep technology and to grow and scale them into billion-dollar enterprises. That was our strategy in 2012 and that’s our strategy in 2018. Brexit has had a big effect on COSIMO in a strange and unexpectedly positive way. Irish companies that would traditionally look to the UK market as their first international market are now turning their attention more quickly to the US, which aligns with COSIMO’s Ireland/UK-to-US business strategy. And UK companies that would traditionally have looked at Europe also are looking at the US much more immediately than they were prior to Brexit. We’ve also found, as a result of Brexit and the isolation of Great Britain, that the local government is injecting a significant amount of capital into the early stage start up space to foster the growth of technical talent and new technology. The standard of what we’re seeing out of the UK in particular is very strong as a result of that. I define success as achieving big goals and am driven by the big goals that my co-founder Rob and I have set for COSIMO. Working with our deep technology portfolio companies on a daily basis – companies trying to change the world – is really exciting! Such companies include GECKO Governance, which is changing the face of regulation and compliance by introducing blockchain for the whole financial industry, Novaleah, which is at the forefront of cybersecurity for medical devices in hospitals, and Oneiro, which is building a Blockchain-based technology that we believe is going to be the next global digital currency. The best advice I can give is to be resilient, be strong, and never give up. Definitely being involved on a daily basis with the impending launch of a new global digital currency. Watching our portfolio companies develop, grow, and move to the next phase of their maturity has, too, been extremely exciting and deeply rewarding. COSIMO is also launching an ongoing new thought leadership series that’s about to go live, COSIMO Verbatim, that will feature both our podcast and Medium blogs. Our goal with Verbatim is to educate people on critical deep tech trends and explore how they might change the world. The completion of our security token fund, COSIMO X, is next on the agenda. Oneiro’s successful launch of ndau, a new global digital currency, is the next big step with regard to our existing portfolio. To be sure, COSIMO is looking at several very exciting companies in the blockchain space, and a number of those companies are in Ireland and in the UK. Out of those companies, we hope to add at least two to our portfolio this year. The big opportunity is blockchain. COSIMO is at the forefront of that both from an investment perspective and from a thought leadership perspective through COSIMO Verbatim. We really see this as being truly disruptive and game changing for every single vertical and industry. That’s the next big opportunity for growth for COSIMO and for the world. COSIMO would like to be one of the leading transatlantic deep technology investment firms around. We’d like to be a pioneer in the new wave of venture and we’d like to be a key player and thought leader in the emerging blockchain/crypto economy.Q. What are your main priorities and goals in your role?
Q. What are your biggest challenges as CEO?
Q. How do you keep your team/staff motivated?
Q. What are the challenges facing the industry going forward?
Q. What new trends are emerging in your industry?
Q. Are there any major changes you would like to see in your sector?
Q. As an employer are you finding any skills gaps in the market?
Q. How did your strategy develop in the context of the banking crisis and economic crisis?
Q. How will Brexit affect you, or have you started to feel the effects already?
Q. How do you define success and what drives you to succeed?
Q. What’s the best advice you’ve been given, or would give, in business?
Q. What have been your highlights in business over the past year?
Q. What’s next for your company?
Q. What opportunities or plans for growth do you see in 2018?
Q. Where do you want your business/brand to be this time next year?
The best advice I can give is to be resilient, be strong, and never give up.
Business & Finance, CEO Q&A
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