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The idea for Iconic Funds came from investor demand, to invest in cryptocurrencies with more traditional vehicles.Maximilian Lautenschläger, COO and Co-Founder Iconic Holding
The Founder
Maximilian Lautenschläger (https://www.linkedin.com/in/maximilian-lautenschl%C3%A4ger/) grew up in the beautiful city of Heidelberg (https://en.wikipedia.org/wiki/Heidelberg). He stayed in the Rhein-Neckar Metropolitan Area (https://en.wikipedia.org/wiki/Rhine-Neckar) to study in Ludwigshafen and took every opportunity to study abroad. After university he started out working in consulting and found his passion in alternative investments. He started as analyst of private equity funds, moving to a venture developer position. Before joining Iconiq Lab, he has been a startup investor himself.
I am not the guy who said in 2014 Bitcoin is the thing.Maximilian Lautenschläger, COO and Co-Founder Iconic Holding
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The Startup
Iconic Holding is the parent company of Iconic Funds. Iconic Holding originally started out as Iconiq Lab, an accelerator for ICOs, based in Frankfurt. After the end of the ICO craze, they decided what to do next and so they evolved into a crypto asset manager and Blockchain VC. The new structure was renamed Iconic Holding (no more q).
The crypto asset manager is called Iconic Funds
(https://funds.iconicholding.com/invest/) and the blockchain venture capital arm is called Iconic Lab (https://lab.iconicholding.com/, https://www.crunchbase.com/organization/iconiq-lab).
You can find their blog on Medium here (https://iconicholding.medium.com/). Iconic Funds offers to accredit investors hedge funds, a fund domiciled in Malta and also exchange-traded notes, to get exposure to cryptocurrency.
There was this craze about a thing we have never heard before, an ICO.Maximilian Lautenschläger, COO and Co-Founder Iconic Holding
Venture Capital Funding
Iconic Holding is currently preparing the series B round.
Bitcoin for me is digital goldMaximilian Lautenschläger, COO and Co-Founder Iconic Holding
The Video Interview is set to go live on Thursday, February 12th 2021, at 17.00 CET
Further Readings / Additional Resources
WM Daten is a financial service provider, a competitor of Bloomberg and S&P, amongst others, with a strong focus on the German-speaking area: https://www.wmdaten.de/index.php
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The Interviewer
This interview was conducted by Jörn “Joe” Menninger, startup scout, founder and host of Startuprad.io. Reach out to him:
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Automated Transcript
Intro
[0:00] Music.
[0:08] That I owe you were podcast and YouTube blog covering the German startups.With News interviews and Live Events hello and welcome everybody this is Joe from celebrated oh your startup podcast and you to block from Germany today I do haveMaximilian AKA Max here as guests hey how you doing I’m fine thank you how are you.
[0:35] I’m doing great thank you as people cuz I could see whether very tiny moment I’ve shifted to your picture that you arefirst with iconic Holdings and secondly you are,in the city of Frankfort we can see some of the iconic buildings in the background but let us firsttalk a little bit about what you did that brought you into your current position I’ve seen you studied at universities quite internationally and finished with an MBA.
The Founder — Maximilian Started In Consulting, But Found Passion In Alternative Finance
[1:11] Yeah that’s very true actually my bachelor degree was in Lucas Hoffman.The reason for that is that I was not good at good enough it’s cool to actually join Mannheim Business School,my rod I enjoyed life back in the days when I was 18 19 20 yeah I didn’t get my bachelor’s degree in looks half decided to start as a Management Consultant.I’ve worked in the area Asia of digitization and project management.Is this for a few years but yeah to be almost never I was never very passionate about Consulting itself.It was a very interesting from a learning curve perspective.But then on the personal level I actually became passionate about fighting finance and alternative Finance in particular so I decided to then do my MBA here at the Frankfurt School of finance that to do my Charter deterred if investment analyst.Yeah this is a lot more or less came to the private Equity space then.
[2:08] We met at that loot x 1/2 and Manheim are two cities just a just divided by the river Rhine with Ludwig’s half may be famous for being the headquarter of the chemical companyBASFand home to the largest chemical plant complex in the world and the City of Mannheim is famous with in Mannheim because it’s basically a circle and within the circle they are squares,and so for example you don’t live in this and that street number this and that but you livefor example in qu7 in Q7 9 which is quite interesting but trivia I learned not one square,so to say square of the city of Manhattan is actually a square ha so basically you grew up in this area I seem right.
[3:00] Yeah absolutely so I’m born and raised in Heidelberg and of course I mean Heidelberg I mean just for the audience Heidelberg Mannheim duplex house and they all belong to one metropolitan area.We have quite a strong economy there I mean we have BASF as you have already mentioned we have sap we have highly drug we have Heidel cement we have MLP we have built the company behind the kbreeze um.So yeah very cool I’m area for doing business.Yes and there’s a big plant of Tandoori the tractor manufacturer of the US right yeah the European headquarters exactly.
[3:40] I remember a friend of mine used to live close by and actually I was always wondering what are those guys doing there that’s the European headquarters haha I learned something but let us getback a little bit to you I’m you’ve been a private Equity analyst many people out there is by to do something like this what what did you actually do there.
[4:04] It was actually not private Equity directly so I never analyzed the underlying companies so the target I analyzed from a fund of funds perspective two different funds.So what we did normally we got like all the private placement memorandum so ppm’s,from the different found they could be turnaround strategies leveraged buyout management buyout or even venture capital and growth funds then we analyze them based on different kpis and then we brought the best into one vehicle,which then acts as a fund of fund for private Equity like Investments so we analyzed the funds itself,Toby went on frequent frequent isn’t tool body alternative asset space that similar to Bloomberg so you see how the different fund managers perform,how the fans didn’t want vintage years and that way you can Benchmark the funds and can see the track record because private Equity as the name suggests is a little bit.Yeah more private I like that one yes a very the company behind it is something like a German version of,Morningstar for everybody who doesn’t know them and then you went on to become a venture developer and I do believe that’s where we kind of see the way to words being an entrepreneur for from you right.
[5:26] Yeah 100% then we really wanted to Deep dive into the fintech space and alternative assetsI do suppose the perfect position it was actually the best job I ever had I mean besides what I’m doing now because now I have my own business but what we did and we created a fintech startups from scratch,normally in the alternative asset base so my first project was it’s called the bow V app by Commerce Bank so it was an app where you imagine you walk around the city and you think I would this is a district where I want to live,you will be dragged by geo-tracking and then you would find similar buildings to the one where you are standing which are on the market,and until you get like a quote for buying the house you could do everything digitally.I think until today probably no one has done it yet but at least at least we saw a what yeah feasible from a technological point of view,at the second project was,not terms of as a platform so way to digitally invest into alternative assets and that way just make this or give access to people in an easier manner,for private Equity Commodities real estate and as a classes like that.
[6:42] Those actually so you are absolutely right because this is actually where my entrepreneurial career started because,to be very honest with you I’m not the guy who in 2013 said yes Bitcoin is the best thing in the world and I bought into the old 14,10,000 Bitcoin and now I’m a billionaire and don’t have to work anymore that’s not the story here as you can see I’m still in the office.
[7:07] But it would be nice story though right.Whoopee a nice story about wouldn’t be true and what convinced me of crypto hazards was actually aetherium.It was in 2016 so when I was working at a company building we also had a project in the insurer Tech space.And I saw because in parallel I was already invested in a Nigerian startup and I saw how extremely difficult it is for them to get an insurance it’s impossible,but with a peer-to-peer approach.You can actually ensure everyone on the world even if he doesn’t have access to financial infrastructure this is what really convinced me so mad contracts at the way not only to send cash or to send moneybut also to settle an asset at the same time.
[7:53] Ha and we may add because like eighty to ninety percent of the people out there are not German speakers when you talked aboutAlfie that’s kind of the abbreviation of puffins and ceiling which usually refers tothe credit you need to build your own home your own house or buying a part or something like this plus he used something that is called a litter ‘nativeassets which used to be in the past defined as private equity and hedge funds but basically asset managers.Tend to refer to it everything that is not,bonds shares or cash May is some include ETFs some include derivatives but it’s not a 100% defined space right.
[8:45] I mean by the Kya so by chartered alternative investment Association.It is actually defined as the following its structure product so you’re right yeah structure product its infrastructure its commodities.
[9:01] It’s also Timber and Forestry private Equity hedge fund and also surprising to you real estate.
[9:10] Hi I remember vividly when I was looking into into doing a CFA at one point for the CFA Institute in the past even ETFs used to be alternative Investments.
[9:24] Yeah but that’s crazy I mean I think the definition is I mean even the definition of an asset class varies a lot from you might yeah you might ask this Tower and get a different answer than from this Tower yeah.You never know f.Hahaha I see I see see and then you have been a venture developer which as you said was an awesome job,but then you started your own your own investment company but highly going Scottish after all what did he do there and how did it happen that you started one of those companies.
[10:00] It actually started with my investment in Nigeria and so.I always wanted to support entrepreneurs when they have ideas I mean very very early stage and what actually a friend of mine I met him in my MBA John I’m who’s from Nigeria and he had the idea to launch and.Startup there in the logistics base more or less has Marketplace for logistic capacities,did you can actually match transporting capacities with the demand on the market I was so convinced of it and this is like yeah this was my first investment as a business Angel and I just did it in this gmbh so limited,umbrella because it’s just from an investment point of view better,now today I think I’ve done seven or no.6 Investments personally as an angel and yeah I just found it to have the right vehicle to do so.
[10:55] People may not know this but Nigeria is a very interesting Market if you want to invest in Africa because it’s the most.Populous country they’re so basically you have been.Business and angel investor with this entity how did you approach a Vespers because first apparently was just a friend of yours that you do.I’ll be investment and how did you find them it’s very different stories let me think very quick.
[11:28] I mean most of the people were actually like warm leads how you would Define it so people I knew and I was very convinced of what they’re doingfor example another yep could we go of mine or guy I know launched a prop Tech startups from the real estate space I invested into this,I invested into Captain Bitcoin from harsh it’s also.A colleague of mine which is apparently in the crypto space and my last investment this was actually a cold we child I never met this guy’s before it’s called prep my meal.It’s like a fresh food delivery and yeah I decided to invest there like two months ago,as you can see it’s quite industry agnostic but always I would always just go with small ticket sizes and in the very early stage that’s extremely important because otherwise it will be too much money for me I’m not that wealthy I unfortunately I didn’t buy Bitcoin in 2012.I have mentioned earlier and then in 2017 you joined.
Joining Iconiq Lab, Later Iconic Holding
[12:26] Iconic Lab at this point will soon get to this he said he became interested in the crypto space with aetherium for several reasons right.
[12:41] Yeah I mean I just sorted use cases I mean for example I mentioned the insurance place earlier.But also also if you look for example at the supply chain yeah,how you can now track for example the stain ability within the supply chain imagine a banana gets from let’s say Morocco to the Port of Spain yeah and it has to be cooled down the whole time at 15 degrees.Now you have a you are measuring the temperature within the container and then an NFC chip directly send it to a blockchain and it can never be changed again.And I dislike single source of trust that the blockchain offers just.Yeah convince me from the very very beginning but the reason pattern me found iconic is when in early 2000 I think it was the first quarter of 2017 we saw a report by CB insights.Who how blockchain companies are actually getting funded,and then you saw a huge increase of this bullshit thing I see oh yeah we have never heard of it we didn’t know what it is we thought oh my God now more blockchain companies I actually getting funded through an initial coin offering then through equity.And we had the vision that venture capital and we still have the vision that Venture Capital One day will be decentralized.You won’t have PCS as a gatekeeper and that it will be.
[14:09] That there will be a secondary market for thought of Investments and in the tokenized word I still believe that absolutely true but at the end of the day we were still too early because I mean law has to adjust,I’m too that a lot of things actually also the financial infrastructure the vehicles everything has to adjust I think in three to five years we will see a tokenized economy,where you have a liquid secondary Market also for start-up Investments and where Venture Capital Venture Investments are more decentralized.Um yes and this is what we wanted to do there with iconic lab back in the day still will be Q we will get to that shortly I’m sure.And yeah we invested into 10 companies and total and the idea was to then get a part of their or certain percentage of the total when they do an IC o — —Two of those companies didn’t Ico actually the remaining ones actually decided to do an equity fundraising instead and be converted our money into Equity there.We were actually quite successful so if we look today I mean eighty percent of them so 9 out of the eleven.Are actually still around and pretty well financed and in total I think we have like five times our money back.
[15:26] Sounds pretty good so you guys help them.As an initial idea to prepare for an IC o — — we may skip a little bit the Ico topic because we talked in the last few years a lot about it but I do believe you change your business model since,icos became a little bit unsexy.
[15:51] Yeah absolutely and just just know what I mean with the problems I mentioned earlier I’m I’m still completely convinced of a tokenized economy.But ico’s how they were done in 2017 of course balls just a hype it was not sustainable.Not sustainable at all and as you can see now the whole world is getting funding through again or still through Venture Capital business angels corporate venture capital and so on.But I’m still 100% percent aligned with the Visions we had back then but nonetheless it was.
[16:28] You’re not an attractive business model for us anymore because ico’s died in yeah in the beginning of 2018,and so we decided to do crypto asset management for let’s say blue-chip cryptocurrencies,so because we saw a lot of investor demand actually for Bitcoin for aetherium for ripple Litecoin all this blue chip crypto acid,but they are no good traditional Vehicles how you can invest into those assets but we thought okay let’s always find the best possible vehicle,and give traditional minded investors the right vehicle to get exposure to crypto acid.
[17:07] Before we get into that.
[17:12] Iconic lab was nice eox array do you still believe in it do you think that there will be a,unless hyped second wave of ico’s at one point in the future where startups again are finding themselves via icl’s.
[17:29] I think it will never be named Ico again.But what I believe is that all equities in the future will be tokenized and hands every fundraise.Would be an initial coin offering in this I mean it doesn’t matter if you call it security token offering initial coin offering initial exchange offering this were all buzzwords,but I completely believe that startups will get that all equities will be tokenized.And hands of the whole early stage investment.Ecosystem could be a leak liquid and fungible Market because now people can trade the equities lying on the tofu directly with each other.And this is what I find beautiful and I completely believe that this will be the future.ICC and I said you’ve seen ico’s died and he decided to give.Access in the more traditional way.To the crypto space how did you guys start and how did you get this idea.
[18:38] And the idea was actually investor demand so we saw that some of our investors so the people who invested into our startups into the ico’s and also into our equity.Dead why is there no proper vehicle how I can get exposure for example to pit.To aetherium because we don’t have any ETFs we don’t have any usage funds.Aren’t there any because on the world that you could actually use to where you could have crypto as an underlying and this is around I think two years ago where this happened and we decided to found iconic funds.I’m at the first vehicle so we really we looked at every country in the European Union and we then discovered a vehicle called piff professional investment Fund in Malta,well we were able to do the first licensed crypto Index Fund in Europe.That was pretty cool because now we can give investors exposure to the top 20 cryptocurrencies,but in a traditional vehicle where all the data is in the systems of like in Germany we have those I don’t know if you’re familiar with it BMW does this like you could maybe compared to like mornings dowel or to Bloomberg,so it is.It is in the it systems of the bank so everyone who invest into the bank and then see the net asset value of their Holdings every month.
[20:05] So the end Darton is a German version of.I would say it’s a german-speaking a version of financial data data provider and you guys were in there still,iconic fans with the Q I do believe right yes yeah.
[20:29] And now you guys we’re somewhere between being Ico accelerator and alternative,Asset Management you consider yourself an asset manager or a white labeling house or Asset Management service provider.We have one hundred percent in crypto asset manager.Do with iconic lab we are not in Ico accelerator anymore we are just an equity investor in blockchain companies so the last Investments we did is just very very early stage,we invest into blockchain startups and that’s industry agnostic could be from the iot space could be from the AI space from fintech from crypto itself,so quite industry agnostic because we believe blockchain plays a crucial role in a lot of Industries.
[21:18] So this is what we are doing with iconic lab but that’s maybe 10% of our focus at the moment 90% of our focus is really iconic funds and they are we are just the issuer of financial vehicles on as a manager,so we try to give you or with you have we try to give you the best possible exposure to crypto in the traditional manner.I’m normally a mutual fund in Germany is structured like there’s an asset manager for example many people may know DWS and then there is a company that actually keeps,the asset safe on behalf,of the investors to basically the asset manager doesn’t have the Assets in the house it belongs to a different bank in the case of DWS mostly State Street and.Are you guys working in a similar way.
[22:09] Yeah one understand what we found out in the very beginning is that a lot of players in the space unfortunately don’t use best practice.
[22:19] Base for example you’ll see a lot of players that are as you custody,so what this means is that they hold their own acid may be underwater it within their company yeah and this is very very risky or they are their own index provider for example for us is different we have,we have coinbase Pro and we have Fidelity digital assets as our custodians so they are holding the assets for us,I think they had a most trusted parties in the world and we are indeed as you just said we are the issuer of the financial vehicle itself.
[22:56] What it guys issuing is this like a user to complaint mutual fund.
[23:04] Use it is not not yet possible for cryptos,because you said has they must be Diversified to a certain extent and the problem at the moment is that Baffin views all crypto assets as the same as.That’s the problem that you can maximum have exposure and it uses fund I think 10% of crypto.
[23:27] Wants the buff and decides that like etherium for example is a different asset that Bitcoin and Bitcoin is a different asset than Ripple then use its funds are absolutely possible you can.At the moment as I said earlier we decided to First go with the professional investment Fund in Malta it’s quite similar to an alternative investment fund so to 1/8.In the u.s. I mean we also have an office in New York our hedge funds are launched through a Delaware Cayman Island structure.
[23:56] And then the product that we are doing at the moment which will get approved by Baffin here ret ends so exchange-traded notes.They are.Kind of certificate but they are trading in the regulated market where is certificates traditionally or typically trade on the open market that’s the big difference there.
[24:19] And as I’m really sorry I was buzzed wording usage is undertaking for
cholestacare Collective investments in transferable Securities is basically the legal framework for mutual funds.In the European Union and I do believe they became pretty popular worldwide so you guys are actually not.Necessarily especially with the hedge funds not addressing like the simple retail investor you are catering more to the really professional investor here right.Yeah we are little bit limited by law we want to Target everyone but the professional investment Fund in Malta and also aifs here,and also hedge funds of course on the Cayman Islands they are all targeting it depends what definition you use in the US you would say accredited investor,did you use the definition is qualified investor in Germany we have professional and say me take my professional investors.Though yeah but they’re yes they’re only targeting those for the ETP so for the ET ends it’s different,the day they will be trading on the exchanges he and they will be 100% accessible to retail investors.
[25:34] We may add that those qualifications you talked about are just basically an attempt at investor protection because those people who qualify at thishigher levellike a professional investor or the other forms as you said that are basically people that are doing this full-time they do have a full-time staff and they have enough financial assets to actually absorblosses and that’s the idea that the lawmakers have different brackets of professionalism forinvestors and now you have such a lot of structures and I do believe we talked to you as the CEO and co-founder of iconic Holdings and iconic Holdings is like the top structure above all of thatyeah 100 percent so iconic holding is the parent company and underneath we have iconic funds so the crypto asset manager,with the issue of financial vehicles,then we have iconic lab with this early stage blockchain investor in the future we might have another venture capital fund underneath the structure,and then the us we have the multi-manager which basically is the infrastructure where we launched a different hedge fund strategies.
[26:55] Opened an office in Dubai has well this is quite new.
[27:00] Very nice and realize every time we do something with crypto we arenot only in Switzerland the Philippines and Singapore pretty pretty sought-after but also in the UnitedArab Emirates and there is Dubai as well so you got to the right people let us talk a little bit abouthow big you guys are like in terms of headcount and what are the future plans when we going to hear from you again.
[27:33] So at the moment we are 11.So we are 12 people we are 10 people here in Frankfort no.13 sorry we had spent here in Frankfort so it’s a it’s always changing we have 10 people you have Frankfurt then we have one employee in Singapore.We have M to people in the US Dylan and Dominic that are heading our business there.Yeah future plans is of course scaling and we want to be the biggest crypto asset manager in Europe that’s our goal in PR 100% convinced we can become it.I mean our investors include Christian angermeyer with his cryptology group fin lab here from Frankfurt also High to crypto fund which is the biggest Continental European,BC so we have amazing investors with a good Network and we are very very optimistic that we can fundraise very well for our financial vehicles,yeah and at the moment we are just about to start our serious beef round which will be our last financing round and to scale the operations even further.
[28:35] And we may add we talk to herAlex front fighting back the CEO and managing partner of the high-tech uniform and we published it shortly before Christmas which is by now like two months in the past but we link,down here in the show notes of course everything there.Everybody is interested in getting into you Series be will have of course as always not only the website of iconic Holdings down here in the show notes but also yourpersonal LinkedIn profile so people can reach out directly to you right.
[29:18] Yes absolutely I mean we were just kick our fundraising I think today and we are very very excited and I think it’s going to be a bright future because crypto asset management is a little bit yeah one of the hottest topics I think at the moment.There’s a lot of interests and yes I’m very very optimistic about the future.I only do have one more question because I frequently heard.Especially Bitcoin but not only Bitcoin also cryptocurrencies referred to as the gold of the Future Would you agree to that thesis or do you work on another investment thesis.
[29:59] I’m so for me this narrative actually is absolutely right for Bitcoin Bitcoin for me is digital gold.I mean I don’t want to talk too much about theoretical and financial Concepts here but maybe just a very quick story there’s something which is called the stock to flow ratio is normally used,for evaluating gold what you let’s just do a quick example let’s assume they’re still one ton of gold under the Earth,let’s say there’s 1,000 tons of gold in circulation all over the globe this would mean that the stock to Pro Rachel’s 1000.
[30:40] If there now is only 500 kilos under the Earth and we have 2,000 tons in circulation,then the stock to flow ratio would be 4,000 so and you can see the higher the stock to flow washer goes the higher the gold price should be,and the Beautiful who is about Bitcoin that we always know the circulating Supply and we always know how many Bitcoins are getting mine 6.25 Bitcoins are getting mind in 10 minutes.And the interesting thing is now that not only this model does apply for Gold variable but also for Bitcoin.If you look like from 2013 to today you can see that the theoretical price of Bitcoin according to stock to flow ratio,is pretty much in line with the price of Bitcoin itself and if you follow the model it should be priced at like 100 thousand dollars until the end of this year.What I find very interesting I mean this is not a forecast but it’s very interesting what the model is suggest here and also JP Morgan made an analysis.
[31:59] Great so I think there is a lot we could talk about in the future maybe we’ll have you back in the fall and talk a little bit more more about the crypto space it was just a pleasure having youthank you very much for being my guest and sorry for the like dimming and brightening of your environment but I’m afraid that has something to do with the sun and that there’s nothing we can really can control from herethank you very much with pleasure having you here thank you so much and sorry for the lightning at least we can be sure it wasn’t a wallpaper.
[32:39] Music.
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