Jack is an Analyst covering AppWorks Accelerator. Before joining the team, he was a co-founder and early team member at two InsurTech startups, where he developed a passion in user experience and product development. Previous to his startup journey he worked as a commercial property underwriter at Chubb Insurance in New Zealand. Jack graduated with a Bachelor of Music from Waikato University where he studied classical piano. He loves to cook, read and is a practicing stoic.
The world of digital ownership is being transformed by the emergence of non-fungible tokens (NFTs). These unique digital assets have opened up new possibilities for creators and collectors across a wide range of industries, but arguably none more so than the music business.
The music industry has a long history of conflict over asset ownership and the transfer of value produced by selling or playing the song. This should come as no surprise given the value chain’s fragmentation and opacity that was built over the years to distribute music worldwide. However, as the industry gradually consolidates and is consumed by its digital self, there is an opportunity to establish a transparent ownership and value distribution pipeline through the use of blockchain and NFTs. Ultimately, this makes it easier for artists and creatives to receive proper attribution and incentivization for their work.
That’s why we are excited to back Cardin Campbell, the founder and CEO of Trac, recognizing the potential of Trac to shape the future of the music industry and create new opportunities for musicians to monetize art and control their careers.
From musician to founder
Cardin experienced the hardships that musicians face personally as an aspiring musical talent in his youth. Music, as the major product and the center of the artistry, would generally only earn a tiny royalty distribution, making a sustainable career difficult. With no transparency into the royalties system, musicians must rely on touring and merchandise sales to fund their art, which for many is an additional responsibility that often prevents exceptional musicians from being able to make music full time.
Cardin was urged to follow a career in software engineering instead, owing to his secondary interests in programming and product development. Hebuilt his career in the valley and held multiple senior engineering roles across Intel, Nike, Expedia, and Peloton. Through all of this, Cardin never lost his love for music, and when his own son decided to pursue a career as a professional musician, he decided it was time to bring what he had learned in tech and roll up his sleeves to build Trac – a digital platform that takes care of everything else that is not related to creating music, so artists can focus more of their time on their craft.
“Sign yourself, be your own label”
Trac enables musicians to publish their music on all major streaming platforms, including Spotify, Apple Music, Amazon Music, iHeartRadio, and others, as well as sketch, order, and sell products, and analyze their streaming/listener data to better understand their fans. Labels or agents are traditionally hired to address these vexing duties. However, with Trac, musicians of all levels now can easily access such tools and execute time-consuming work effortlessly.
Cardin and his team are also constructing the pipelines required to assist artists in exploring NFTs. Due to the ease of which NFTs can be tracked and confirmed on blockchain networks, it can readily determine who owns a specific NFT and distribute royalties accordingly. This has the potential to establish a highly transparent and equitable royalty payment system, benefiting musicians who provide the core product but struggle to earn their fair share due to various intermediaries in the current system.
Giving power back to the musicians
Trac is still in its early stages, but the potential for what it can do for musicians around the world is enormously exciting. Trac has the potential to make a huge influence on the music business by assisting musicians in taking charge of their own careers and monetizing their talent. And as more musicians use NFTs and other digital ownership technologies, the possibilities for Trac are truly boundless. We are thrilled to be a part of this adventure and look forward to seeing where Trac leads the industry in the future.
At AppWorks, we look for great founders who are building on new technologies such as web3 to innovate and solve real world problems. We’re honored to have the privilege to partner with Cardin and his team at Trac as they continue to break new ground at the forefront of helping musicians across the globe take control of their career.
[If you are a founder working on a startup in SEA, or working with web3 and AI / IoT, apply to AppWorks Accelerator to join the largest founder community in Greater Southeast Asia.]
David is an Associate mainly focused on investments. He previously lived in the US, but was drawn to the Greater Southeast Asia region by the growth opportunities and the wonderful people here. He spent the first five years of his career as a consultant at IBM, where he became intimately familiar with the enterprise software and services needs of Fortune 500 companies. Later, he focused on building predictive models and solving optimization problems for large companies, and gained an appreciation for the role of data and algorithms in our lives. He joined AppWorks in 2020 after receiving his MBA from Columbia Business School, and also has a B.S. in Mathematics from the Ohio State University. In his free time, he tries to stay active and is always looking for opportunities to hike or trek, often seeking the trail less traveled.
NFTs have finally burst into the mainstream consciousness in the last year after spending a few years simmering underneath the surface as critical infrastructure was built out. This followed a DeFi boom after a similar infrastructure-building phase.
Today, essential groundwork is being built to unlock tomorrow’s use cases and utilities in NFTs, gaming, and DeFi, which will bring about new classes of assets and activity. On-chain sentient NFTs, non-player characters (NPCs) in gaming, and automated financial transactions in DeFi are just some of the things that can be unlocked through “decentralized automation”.
We are proud to announce our investment into Autonomy Network, a decentralized automation protocol that unlocks these brand new use cases in web3. Despite their name, smart contracts have limited intelligence, and Autonomy aims to bring them to life. The founder behind Autonomy is James Key, one of the most impressive young founders we have met.
A determined decentralist on a mission
When we first met James in the interview for our accelerator program last year, it didn’t take long to be impressed by this 25-year-old’s strong passion and devotion to his craft. We recognized this was a genuine life calling for him and he would stop at nothing to accomplish his dreams.
Based in Berlin, James was a university student not long ago, completing the last year of his physics degree while working in a quantum computing lab on the cutting edge of physics. Though it was interesting work, the pace was slow compared to the other itch he had – crypto. James took leave to work on blockchain forensics, including for the FBI, and when the university asked him to either come back or drop out, he made the easy choice to do the latter and pursue his interests further, including stablecoins and cross-chain bridging.
The draw of crypto would have been natural to James at a young age. As a child, when his parents installed child locks on his computer, James found a way to hack the locks – despite having no previous interest in hacking. So, when he read about censorship-resistant currencies years later, it was a natural curiosity and easy sell.
During the next few years working for other blockchain projects, there was another itch, growing every day – to start his own company and serve this glaring need he had recognized in the market, all without compromising on decentralization (something he had witnessed working on other projects and could not accept on principle).
After working on it on the side for some time, he emptied his vacation days and coded nonstop for two weeks. At the end of it, he faced the choice of either giving up on this idea or going all in – building a team and becoming a founder. Again, he made the easy choice, and Autonomy Network was born.
Fully enabling DeFi smart contracts
Due to the nature of smart contracts needing to be called by an outside party, critical use cases in DeFi have been missing, such as stop and limit orders, automatic liquidity provisioning, and automatic self-liquidations in a completely decentralized, non-custom, composable manner.
This is especially essential in DeFi, as crypto markets are 24/7, fast-moving, and volatile.
Autonomy Network has built a fully composable, decentralized network of bots that can perform any action when an arbitrary condition is met. Users register requests, bots monitor the network state, and a proof-of-stake algorithm determines which bot can execute the request and collect a reward. The team has already begun integrating with major DEXes with some more big names on the way.
Other features like recurring payments are also being developed, but perhaps the most exciting is autonomous NFTs.
Sentient NFTs, a new form of life
With autonomous NFTs, a non-human and non-human-controlled entity can execute their own transactions on a blockchain using Autonomy Network. They can vote, trade, send messages, play against you in a game, buy other NFTs, upgrade its own logic, and even have offspring by minting aNFTs of itself.
The ultimate goal, as James puts it, is to create the first blockchain-based citizen in the UAE. But for now, the team is working on NPCs for major metaverse applications and its first blockchain game, MetaDungeon, in which users can fight NPCs and claim (or lose) real assets depending on the result.
We’re excited to support James on this mission, through all of the twists and turns and ups and downs. At AppWorks, we make big, bold bets on potentially industry-changing founders and are honored to have the privilege of putting our faith in the drive, vision, and execution of James, his co-founder Diego Chui, and the entire Autonomy team.
[If you are a founder working on a startup in SEA, or working with web3 / DAO, and AI / IoT, apply to AppWorks Accelerator to join the leading founder community in Greater Southeast Asia.]
Editor’s note: We’re excited to join Kikitrade’s mission to bring social investing to the public in Asia. The press release from Kikitrade is below:
Asia’s leading one-stop cryptocurrency and social investment platform Kikitrade announced the company has completed a $6 million strategic round, co-led by AppWorks and Media Asia (SEHK: 8075) with participation from Audeo Ventures and existing shareholders. This round of funding follows a $12 million investment led by internationally renowned investors Dragonfly Capital and Alan Howard last summer, bringing the total funds raised in the past 12 months to $18 million.
The fresh funding is led by AppWorks, a leading venture capital firm and accelerator in Taiwan and Southeast Asia. It manages 3 venture capital funds with a total size of $212 million and is also the world’s second largest institutional investor of FLOW Tokens. Another investor Audeo Ventures is a venture capital firm with a global aspiration, focusing on fintech, consumer tech, and blockchain, it is also an investor of a crypto financial services platform BlockFi.
Media Asia is Asia leading entertainment group , a member of Lai Sun Development Company Ltd under the chairmanship of Dr. Peter Lam. The principal business of Media Asia include artiste management, production and distribution of series of films ,TV programs, music and concerts , The group has won countless awards and honors over the years, including blockbuster movies “Infernal Affairs Trilogy” and “Initial D” etc. Recently, Media Asia has become a strategic partner with Tencent and established its new media, social commerce and virtual entertainment products.
With this investment, Media Asia will enter a strategic partnership with Kikitrade, and form a joint venture to launch “Kiki NFT Platform”. With ever richer resources, the joint venture will drive the integration of creative industries and blockchain technology, aiming at building a new era of entertainment for Generation Z.
Lures Top Investors To Drive Mass Crypto Adoption
Kikitrade has reinvented the crypto investing experience by making its platform social-driven. “SocialFi” investment model allows the public to gain more benefits through their own social and community influences, such as asking onboarding questions and participating in community voting activities to win tokens or NFT airdrops, and turns Kikitrade into crypto investors’ go-to place. At present, Kikitrade has served more than 200,000 users from Hong Kong, Taiwan, Southeast Asia and Australia.
Ching Tseng, Web3 Principal of AppWorks said: “AppWorks is committed to supporting the most promising startups and helping accelerate their to incremental growth through cross-pollination with our ecosystem of 435 active companies. Kikitrade is built from the ground up based on the founding team’s unique insights on “social investing”. We believe that is the future of finance, not only for cryptocurrencies, but also for the entire spectrum of investment. Kikitrade has a great potential to drive innovation across investing communities.”
CT Yip, Executive Director of Media Asia said: “Media Asia has been achieving breakthrough developments in the fast growing digital entertainment field, which has become a new normal. The Group looks forward to cooperating with Kikitrade to meet the entertainment demands from the new generations, accelerate digitalization, and curate the best virtual entertainment experiences to Asian users.”
Pasha Tinkov, Managing Director at Audeo Ventures said: “Kikitrade is at the forefront of integrating crypto investing with a dedicated social platform. Audeo Ventures is delighted to join hands with world-renowned investors in supporting Kikitrade’s new funding round and is confident in its management’s capacity to materialize their growth plans.”
Sean Tao, co-founder and CEO of Kikitrade, said: “The strategic investors introduced this time will enrich Kikitrade’s resources in the “social investment” and Social-Fi avenues, and effectively help Kikitrade expand its international market. We will continue to make it easier for the general public to understand cryptocurrencies and develop a sense of camaraderie in the community, so that crypto investing is no longer lonely.”
Taking Social Investing To Next Level
The funds raised this time will be deployed to expand into new international markets. The company had its foray to the Middle East last year, it is planning to enter the wider Southeast Asian markets this year. In addition, Kikitrade plans to strengthen its development team to 100 people and deliver more product innovations to bring users a better SocialFi experience. The company also plans to introduce hundreds of key opinion leaders (KOLs), media, and cryptocurrency exchanges’ CEOs to the platform to interact with the community, and makes investing ever more interactive and fun.
About Kikitrade
Kikitrade is Asia’s leading one-stop social investing platform that allows beginners to purchase and manage digital assets at ease. The company was founded in 2020 by Everest Ventures Group (EVG), a Web 3 focused venture studio, and received US$12 million in funding after launching in 2021.
Investors include British hedge fund billionaire Alan Howard, renowned blockchain venture capital fund Dragonfly Capital, co-founder of Ethereum Joseph Lubin, and Chairman of Head & shoulders Financial Group Stanley Choi, etc.Animoca Brands, a blockchain game giant with a valuation of more than $5 billion, is Kikitrade’s second largest shareholder. Yat Siu, co-founder and executive chairman of Animoca Brands, is also the chairman of Kikitrade’s board of directors.
The Kikitrade community has garnered more than 100 investment analysts, key opinion leaders (KOLs), cryptocurrency ventures’ CEOs, etc, who have been actively sharing unique insights and latest analysis on the social investing platform, making the community one of the most vibrant in Asia.
[If you are a founder working on a startup in SEA, or working with AI, Blockchain, and NFT, apply to AppWorks Accelerator to join the leading founder community in Greater Southeast Asia.]
Joseph is a Partner who joined in 2013 and has since covered our “kitchen” — portfolio management, operations and advising startups on finance and fundraising. He is also in charge of connecting the ecosystems between Japan and Taiwan. Prior to AppWorks, Joseph spent 11 years with the CID Group, a Greater China leading venture firm, where he helped raise US$575M across multiple funds and headed portfolio management. Prior to that, Joseph served as a Manager of Backbone Network at Gigamedia, a NASDAQ-listed broadband ISP. Joseph earned his Master in Agriculture Machinery Engineering from National Taiwan University. He is native in both Mandarin and Japanese.
One of the biggest challenges among first-time founders is putting together their first priced fundraising round. In markets like Taiwan and Southeast Asia, the venture ecosystem is still relatively young, leaving a number of misconceptions around deal making among both entrepreneurs and investors alike. Some first-time founders, especially those from blue-chip backgrounds or elite pedigrees, may treat the deal process as a competition driven by game theory—where there must be a winner and a loser. From my experience, however, treating discussions with investors as a win-lose proposition only leads to mutually-assured failure. Everyone should leave their egos at the door.
What’s at stake when a founder tries to over optimize their own self-interest? Some investors may choose to walk, making the fundraising process that much tougher. Worse yet, you may end up bringing on angel investors who begrudgingly put some skin in the game, but not enough to really help you out when push comes to shove. Setting a good faith tone between founders and investors from the getgo will make it much easier for both sides to come to an agreement. While a startup’s first round of fundraising may seem like a standard process, it sets the long-term legal and financial foundation for the company’s relationship with investors, making it mission-critical for founders to understand exactly what they’re getting into.
1. Find a founder-mentor
The most valuable thing that a first-time founder should do—and maybe the first thing they should do when starting a company in general—is find a founder-mentor, someone who has been there, done that, and knows the ropes of fundraising and term setting with early-stage investors. Founder-mentors can be powerful advocates and filters for your company when sourcing customers or potential backers. Remember, as investors run due diligence on you, it’s important that you also conduct due diligence on them as well. Not all investors are created equal, and you may sometimes find that their actions contradict their words only after the ink has dried.
That’s why first-time founders need to surround themselves with the right people. Mentors and angel investors play an indispensable role in guiding founders to understand the true nature of the founder-investor relationship. By seeking out founder-mentors or angel investors who have experience working with venture capital firms or joining an accelerator program that provides mentorship, first-time founders can better navigate the fundraising process with much greater ease. Finding such advocates will help founders avoid bad actors, understand term sheet best practices, and put the startup on a solid footing for the journey ahead.
2. Mind your timing
Before any team looks to fundraise, the most important factor is timing. Timing is everything. Investors want to invest in attractive companies in an attractive space. First-time founders should initiate fundraising efforts after gaining traction, signing on new customers, or proving out your MVP. The less founders have to show for the company, the worse the valuation and terms investors are likely to provide to discount the uncertainty, unless you already have some sort of track record or successful exit behind you. On a more macro level, VCs tend to invest in underlying paradigm shifts, so always be prepared to answer: why now and why you?
3. Use a savvy lawyer
Another area that frequently trips up first-time founders is finding quality legal counsel. In developing markets, founders cannot rely solely on lawyers to negotiate in their best interest. Outside of the Bay Area, venture capital is simply not a large or profitable enough vertical for legal specialization—so venture deals are often a low priority for emerging market lawyers. When it comes to structuring a deal, lawyers play a fleeting role as the relationship may be strictly transactional. Their nature is based purely on winning something on paper for their clients, and once the deal is done, they move on to the next client. For investors and founders, the first term sheet is just the beginning, as each round of investment adds another layer of complexity, requiring a solid foundation to build off of, with the initial term sheet setting sustainable grounds for the company’s development. Accepting a lousy term sheet is like building a house on poor soil, setting the structure up for collapse under adverse circumstances.
4. Understand the value of vesting
One of the most frequently misunderstood terms among first-time founders is vesting. Many founders ask me, why is vesting necessary? Or perhaps fear that the investors may try to drive out the founding team down the road for replacements. Vesting is a prevalent industry practice, acting as a mechanism to create forward-looking incentivization and alignment between founders and investors. Investors want founders to be in the deal for the long haul, rewarding their dedication to the company. I have found that vesting-related issues most commonly arise among solo founders, where there is significant key-man risk, whereas teams with multiple co-founders tend to reinforce one another to buy into vesting terms. If there is no founder vesting in place, co-founders who leave abruptly can just as easily take their shares with them. I’ve seen cases where 40% of the cap table is locked away due to a co-founder who decided to jump ship, leaving the other founders and investors with little recourse to salvage the company’s ownership outlook. For a more comprehensive explanation of founder vesting, you can reference this article.
5. Be wary of uncommon practices
As far as industry best practices go, there are some less common terms that may put founders at a disadvantage if not understood properly. For example, an investor can try to secure excessively generous veto rights, which could come into play if a company is looking to stay afloat by initiating a down round of financing. In some cases, I’ve seen an investor veto the round as they thought the company could still raise at a markup. In the end, the company had to shut down. To mitigate such an issue, it is important for founders to carefully design your cap table and avoid agreeing to unnecessarily strong minority veto rights, unless you believe the situation truly calls for them.
There are even more stringent examples of uncommon terms. Some investors may force upon founder unfair guarantees, requiring founders to be personally liable for unforeseen tax consequences and subsequent reimbursements to the company. This should be a major cause for consideration, as founders typically should not be responsible for these kinds of issues outside of integrity or fiduciary duty-related issues. Nevertheless, unusual terms are put in place for unusual circumstances. Every deal is contextual, so be sure to understand the full scope of your situation and adjust the terms accordingly.
It is also worth noting that in emerging and frontier markets where venture capital tends to be more scarce, some investors—especially those from traditional backgrounds—may view and treat founders as employees on the cap table. Now, there are certainly founders that do in fact appreciate and require this level of involvement or guidance; but, for many, these types of investors may end up micromanaging every course of action, leaving little room for creative freedom, flexibility, or control. It’s imperative to understand which camp you prefer.
Playing the long game
Now, is there any difference in term sheets for emerging markets compared to mature markets like Silicon Valley? Not really. There are global standard practices and terms that appear across markets that are consistent with the asset class; however, each market and sector have their own unique conditions that require investors and founders to adjust terms accordingly. Local investors may better understand regulatory conditions or cultural sensitivities, which allow both sides to come to an agreement that may better suit the on-the-ground circumstances of the market and company.
Ultimately, a term sheet is just a framework for partnership. What’s more important is whether or not you can see yourself working with this investor for the next 5-10 years, and then setting the terms from there. Over the past decade, financial literacy among first-time founders in Taiwan and Southeast Asia has improved dramatically. Investors have also adopted global best practices to help them win deals by removing once-common archaic harsh terms. For AppWorks, we aspire to work with founders throughout the entrepreneurial life cycle, guiding first-time founders in term sheet discussions and ensuring that founders are equipped with the tools for long-term success. Term sheets should not be a win-lose proposition for investors and founders. As the ecosystem matures, the market will naturally filter out bad terms, leading to better investor-founder dynamics that foster higher-quality investment and innovation.
【If you are a founder working on a startup in SEA, or working with AI, Blockchain, and NFT, apply to AppWorks Accelerator to join the largest founder community in Greater Southeast Asia.】
