When Charlie Shrem was released from prison he was bombarded with hundreds of emails, according to the long-time entrepreneur and Bitcoin advocate. One, however, stood out. It began: “I am working on a private equity and portfolio management project on the blockchain.”
“It’s like saying I’m working on world peace. It’s such a big idea,” said Shrem, 27.
The idea stemmed from Jason Granger, 38, a figure with experience commanding large teams in banking, real estate, construction, and private equity.
“I come from a world with strict guidelines,” said Granger, who is based in Grand Rapids, Michigan. “I worked for a year just to negotiate a joint venture agreement . . .There was a strict amount of legal governance, a strict amount of fiduciary responsibility and a strict amount of transparency.”
Well Thought-Out Structure
The joint-venture partnership was with AIG and it amounted to a staggering $405 million equity commitment in a $2 billion real estate development platform for First & Main senior living.
So with such rigid experience rooted in traditional financial rules and practices, Granger reached out to Shrem. A few months later, according to Shrem, the two formed Intellisys Capital, LLC and Mainstreet Investment LP.
Granger is the CEO of the blockchain-fuelled endeavour; Shrem, the CTO. But the firm is much more complex than two like-minds.
There’s a well-thought out structure, an organizational framework unlike anything within the private equity investment space as the venture seeks to meld two worlds, traditional and the emerging. Helping fuel it is the Mainstreet Investment Token (MIT), a digital ledger security tied to hard assets, supported by blockchain technology.
It’s a different kind of digital currency investment, said Shrem. It mixes in established principles on how to raise and administer equity, utilizing next-era technology.
Private Equity Tokenized
According to Granger, the project is blockchain-facilitated, adding, “It’s about safe investment into middle-market companies, which will be diligently vetted.”
The project is essentially bringing traditional practices to the cryptocurrency space, a space which has operated quite informally, to date.
The organization will consist of two companies, Mainstreet Investment, a Cayman Island limited partnership, of which 30 percent will be owned by token holders (the MIT) and a controlling stake, 70 percent, will be owned by Intellisys Capital, LLC, based in Grand Rapids.
Token holders will essentially be a decentralized, peer-to-peer — or investor-to-investor — network.
In other words, according to Shrem, through the purchase of MITs, investors become part of the LP to effectively pool funds with other investors for projects sourced and analyzed by Intellisys Capital, the management firm.
“The main difference between what we’re doing and what The DAO is doing is that we’re taking a more traditional perspective on how to raise money and invest money,” said Granger, adding, “The MIT is the first private equity investment offered as a digital security.”
The aim is to invest in US-based middle market operating companies, real estate and blockchain technology projects, according to Granger and Shrem.
“We’re not trying to reinvent the wheel and raise money to build a new technology. We’re using existing technology and we’re applying it to the traditional finance world,” said Shrem.
Crawl, Walk, Run
Digital currency and blockchain technology can enable far greater control — peer-to-peer power — but the approach must be levied carefully with the end-user in mind.
“Making money is great but we really want to empower people and make a difference,” said Granger. “How can we change the world to make it better?”
Disaster relief, building wells, helping communities in third-world countries, these are just a few of the long-term achievements that Granger and Shrem envision as existing within the scope and purview of blockchain technology and private equity investment.
Just this year two blockchain-based projects, Helperbit and AidTech, found their way into the hands of the United Nations. The former is a natural disaster management platform while AidTech — “Aid and Trade through Innovation” — harnesses blockchain technology for distribution of aid supplies.
Decentralized technology enables greater control over assets and how to disburse them. It’s about accuracy and precision.
As IrishTimes’ Mark Hilliard wrote: “Blockchain is, at its simplest, a digital spreadsheet of transactions – easy to share, impossible to destroy – enabling safe, transparent accountability.”
He added, “Its use in the aid sector, where fraud, theft and general mismanagement all occur, appears a no-brainer.”
“As it relates to the blockchain side of things, we will only introduce blockchain projects to companies already within the portfolio,” Shrem said.
It is a lot less of an expensive investment, Shrem added, stating, blockchain concepts can be introduced, tried and tested at much lower costs and risk than if otherwise.
There is a perfect synergy to introducing blockchain ideas and opportunities with traditional and existing businesses using status quo technology and it’s these areas, like manufacturing and real estate, where the two entrepreneurs see a great benefit to the Mainstreet Investment fund.
To succeed, however, the venture must build trust and that will begin and end with good decision-making from Intellisys and early adoption of the MIT.
Mainstreet Investment for You
It was over seafood at the waterfront Swordfish Grill on the coast of Manatee County, Florida when Granger and Shrem first met face-to-face.
Shrem was known to Granger only through headlines and Internet research. And this was within just a few months of Granger’s initial email to Shrem.
“I thought, that’s a really good idea. But lots of people have good ideas,” said Shrem. What I did was look at the person, who is Jason Granger?”
In business, “the hardest thing to develop is a sense of trust,” said Granger.
The entire notion, the background to blockchain technology, and of Bitcoin, is a trustless system. Users don’t need to know — and for that matter trust — the other end-user. The system dictates this trust.
The point, according to Granger, is the offering of a bridge, an investment opportunity with even further implications that reverberate from the very types of investments sought.
This is the aim of Mainstreet Investment, of the entire venture. But building it will require trust in Intellisys and those directing those funds and Granger and Shrem know this.
“Turning traditional finance and private equity upside down,” said Granger. “It’s not about the money, it’s about the people.
Eager investors and interested enthusiasts need to wait until the new year to be a part of Mainstreet Investment. Visit mainstreet.ky and intellisys.ai for more information on Intellisys, Mainstreet Investment and the Mainstreet Investment Token.
What do you think about Shrem’s latest venture? Let us know in the comments below.
Images via Pixabay, Independent.
Note: Evan Faggart is an employee of the Vanbex Group, which provides public relations services to Intellisys Capital.