►
Description
Intro by @JuanJuan
Presentation: Fortunafi - https://www.fortunafi.com/
Agenda and Discussion:
https://forum.makerdao.com/t/collateral-onboarding-call-27-fortunafi-wednesday-february-17-18-00-utc/6295
Governance Forum:
https://forum.makerdao.com/
Disclaimer: These calls and the summaries are produced and hosted by MakerDAO community members. Content produced by the community are not the statements or views of the Maker Foundation.
A
A
B
I
don't
have
a
much
news
on
mip
21
and
mip
22.
Sadly,
as
a
smart
contract
team
is
still
working
hard
to
to
make
sure
that
everything
is
safe,
and
so
they
are
testing
me
21
as
we
speak,
but
I
want
to
to
thank
two
teams
that
make
her
the
legal
team
that
helped
me
a
lot
a
lot
last
week
to
see
that
everything
that
we
are
doing
on
with
our
asset
is
quite
safe.
B
A
Easy
good
something
else.
I
would
like
to
mention
it's
that
seb's
sub
proposal
for
a
core
unit
for
your
assets
is
out
there.
So
if
you
want
to
check
it
out,
it's
in
the
in
the
forum
yeah,
so
that's
that's
it
so
nick.
If
you
want
to
to
take
it
away,
I
don't
know
if
you
have
to
share
a
presentation
or.
C
Yep
thanks
juan
yeah.
We
have
a
presentation
today
and
then
a
demo
from
derek
at
coral
sort
of
walk
you
guys
through
the
platform.
First
of
all,
before
we
started,
I
just
wanted
to
say
hello
to
everyone
particularly
wanted
to
thank
the
real
world
asset
risk
team
at
maker,
phil
seb.
Everyone
that's
been
helping
me
on
the
chat,
really
appreciate
the
time
you've
put
into
this
and
looking
forward
to
presenting
here
for
you
guys
today.
So
let
me
share
my
screen.
A
C
C
The
founding
team
is
comprised
of
myself
and
my
co-founder
jason
we've
been
in
the
crypto
space
for
a
while
jason
first
was
a
bitcoin
miner.
Back
in
2011.,
I
joined
the
space
in
2013
and
have
been
pretty
active.
Since
then,
we
started
off
with
a
fund
called
spacewill
capital,
a
criteria,
investment
firm
that
manages
a
discretionary
liquid
trading
strategy
and
actively
participates
and
invests
in
defy.
C
We
have
always
had
this
thesis
that
fintech
and
defy
had
a
tremendous
amount
of
value
through
working
together,
and
we
have
sort
of
iterated
on
that
thesis
and
in
over
the
summer
of
2020,
we
launched
what
is
known
as
fortuna
five
today,
and
our
vision
is
to
bring
institutional
yield
products
to
d5
by
rebuilding
the
securitization
stack
from
the
ground
up.
So
our
approach
is
to
as
as
this
sort
of
articulates
is
to
verticalize
the
entire
process
from
the
initial
point
of
asset
origination,
all
the
way
through
the
end
product.
C
So,
typically,
you
know
in
a
traditional
process,
you
would
have
an
asset
originator
who
goes
out
and
does
the
go
to
market
they
bring
in
an
asset
they
underwrite
it
there's
typically
a
warehouse
provider
that
provides
a
line
of
capital
for
them
to
fund
the
loan.
Then
there
is
typically
a
closing
process
and
then
there's
typically
a
take-out
partner
which
will
buy
the
loan
pool
them
into
eventually
create
these
yield
products
known
as
bonds
that
they
will
send
sell
to
pension
funds
and
sovereign
wealth
funds.
So
in
that
process,
there's
there's
several
intermediaries.
C
It's
it's
a
lot
of
costs.
It's
super
inefficient,
it's
extremely
slow
and
our
vision
is
really
to
bring
efficiency
throughout
this
whole
process
by
verticalizing
it
we.
When
we
went
to
market,
we
really
looked
at
all
of
the
different
asset
classes
to
figure
out
which
assets
we
wanted
to.
You
know
really
focus
on
and
it
for.
After
a
lot
of
research,
we
decided
to
hone
in
on
the
revenue-based
financing
space.
C
What's
really
interesting
about
this
asset
class
is
its
risk
and
return
profile
so
from
a
risk
perspective,
it's
very
similar
to
senior
debt
where
it's
the
first
you
know,
has
senior
security,
lien
and
interest
on
the
underlying
company.
It's
the
first
payout
of
the
companies.
These
assets
just
carry
a
very
low
risk,
given
the
return
potential.
The
return
is
much
more
on
par,
with
sort
of
equity,
linked
or
equity-like
instruments.
C
So
we
really
like
this
asset
class,
and
this
is
really
why
we
decided
to
dig
in
another
aspect
outside
of
the
risk
and
return
profile
is
sort
of
the
lack
of
institutional
support.
So
we
you
know,
we
made
the
assumption
that
the
best
markets
for
us
to
enter
in
would
be
the
markets
that
have
the
least
institutional
warehousing
and
capital
markets
infrastructure
for
it,
so
that
we
can
sort
of
tackle
that
industry
and
and
and
really
capitalize
on
that
with
our
verticalized
process.
C
So
a
little
bit
of
information
on
the
revenue-based
financing
space
for
those
that
are
not
familiar,
revenue-based
financing,
it's
an
asset.
It
is
not
structured
as
a
loan,
so
this
is
an
asset
when
we
buy
these
assets,
we
are
we're
literally
buying
a
portion
of
the
gross
revenues
that
our
business
generates
on
a
monthly
basis.
These
are
typically
companies
that
are
sas
based
revenue,
companies
or
e-commerce
companies,
and
so.
C
So
it's
not
a
fixed
payment
stream.
It's
a
variable
payment
stream
that
fluctuates
with
their
revenue,
but
these
are
growing
companies
that
have
a
track
record
of
growth
that
have
a
track
record
of
of
a
proven
business
model,
and
so
we
feel
very
comfortable
with
the
risk
we're
taking
given
the
returns.
C
C
C
So
coral
who
we're
going
to
bring
on
here
in
a
second
derek,
is
the
ceo
thankful
to
have
him
on
today.
Coral
is
a
fantastic
business.
They
have
an
incredible
technology
and
they're.
Our
first
ask
originator
partner.
So
coral
has
built
this
technology
where
companies
can
apply
with
they.
They
log
in
with
their
bank
accounts
through
plaid.
They
apply,
they
connect
their
accounting
systems,
whether
it's
you
know
quickbooks
or
another
system.
They
basically
connect
all
of
their
different
systems
between
accounting,
cash
marketing
sales.
C
Corel
integrates
all
this
data
into
their
proprietary
underwriting
algorithm,
and
it
calculates
a
credit
score
deals
that
pass
a
certain
credit
score
go
to
underwriting.
The
underwriting
investment
team
is
comprised
of
coral
and
ourselves,
and
then
we
ultimately
make
the
underlying
decision
on
whether
to
purchase
the
asset
for
our
pool
or
not.
C
So
a
little
context
on
coral's
historical
performance.
We
we
launched
a
proof
of
concept
portfolio
in
2020
before
we
we,
we
shared
the
results
of
a
back
test
on
a
number
of
deals
that
coral
received
through
its
algorithm
over
the
last
few
years.
We
shared
that
in
the
link
to
the
in
a
comment
to
the
mip
six.
We
also
shared
that
in
our
underwriting
report,
but
you
can
see
it
in
the
mip
six
as
a
comment
there.
C
C
So
I
think
it's
probably
a
good
point
to
turn
it
over
to
you,
derek
and
derek's
gonna
come
on
and
give
us
a
walk
through
of
the
the
platform
that
I
sort
of
illustrated
where
you
can
come
in,
you
can
apply.
You
can
sync
up
all
of
your
data
and
it
actually
does
the
the
quantitative
scoring
and
has
a
whole
analytics
page
that
we
use
to
make
investors
decisions
that
pass
a
certain
credit
score.
So
so
derek.
B
C
B
C
C
Similar
to
a
mortgage
paper,
it's
literally
a
contract
between
us
and
the
company
that
contract
gets
tokenized
into
an
nft
through
centrifuge
we're
built
on
top
of
centrifuge,
and
then
we
deposit
that
nfc
into
the
pool
and
withdraw
the
funding
to
finance
the
deal.
Okay,
so
custody
is
really
just
a
function
of
legal
contracts.
B
C
Sure
I
mean
yeah
the
the
absolute
worst
case
scenario
you
know
would
be
where
revenue
basically
drops
from
some
historical,
reliable
performance
to
literally
zero,
which
you
know,
I
think,
is
extremely
unlikely,
given
that
these
are
mostly
sas
revenue
contracts
or
recurring
revenue
streams
or
sort
of
like
e-commerce
sales
with
history
that
you
know
really
show
sort
of
adoption
of
the
underlying
product.
So
we
really
look
at
all
these
things
and
we're
really
underwriting
to
the
revenue
quality.
C
Into
their
quantitative
algorithm
that
spits
out
a
credit
score
on
the
underlying
data,
I
think
it'll
make
a
lot
more
sense
once
derek
walks
through
the
demo.
So
you
guys
can
visually
see
what's
going
on
on
the
choral
side
of
things
but
happy
to
take
any
other
questions
before
we
turn
it
over
to
derek,
and
I
think
we
have
time
as
well
after
the
demo
for
any
follow-on
questions.
D
Great
thanks,
nick
I'll
just
share
my
screen
here
and
maybe
before
I
just
jump
in
to
give
you
an
overview
of
coral
I'll,
just
introduce
myself,
I'm
the
ceo
at
coral
background
is
primarily
in
mathematics,
then
turned
finance.
I
worked
at
scotiabank
a
large
top
five
bank
here
in
canada,
with
international
exposure
where
I
worked
in
model
validation,
so
the
bank
has
hundreds
of
models
that
are
used
to
essentially
adjudicate
risk
provision,
capital
make
business
line
decisions,
and
so
our
group
was
responsible
for
for
validating
those
models.
D
I
then
went
across
bay
street
to
kpmg,
where
I
led
the
quant
team
in
financial
risk
management
and
that's
essentially
where
we
were
effectively
the
quant
swat
team
for
the
firm.
So
any
of
the
clients
of
kpmg
that
had
more
statistical
or
financially
engineered
related
issues
would
get
sent
to
our
group
to
solve.
I
then
did
my
own
private
consulting
after
that
worked
with
roughly
three
dozen
different
financial
institutions
across
north
america
and
the
caribbean
solving
different
fintech,
as
well
as
finance
related
issues
with
them
and
then
started.
D
Coral
coral
was
a
is
a
revenue-based
financer.
As
nick
mentioned,
we
focus
on
identifying
companies
within
the
digital
economy,
specifically
sas
e-commerce
and
other
digitally
enabled
businesses
to
provide
capital
to
them
in
the
form
of
what
we
call
revenue
sharing,
which
is.
As
nick
mentioned.
We
take
a
percentage
of
a
business's
top-line
revenue
every
single
month,
and
the
business
has
the
option
to
buy
out
our
investments
or
our
financing
at
a
multiple
to
the
amount
that
we
provided.
D
D
What
I'm
going
to
do
today
is
is
take
you
through
a
high
level.
What
that
onboarding
process
looks
like
for
a
business.
What
types
of
data
sets
that
we're
getting
access
to?
How
we're
evaluating
these
businesses
for
the
purposes
of
extending
capital
to
them,
and
then
I'm
happy
to
go
through
any
details
along
the
way,
just
questions
so
as
a
business,
they
would
land
on
our
website
and
essentially,
click
apply
now
for
the
sake
of
time,
rather
than
going
through
every
single
field.
D
Here,
what
I'm
going
to
do
is
just
kind
of
bring
you
through
the
steps
of
the
application
process.
So
what
you'll
see
here
is
essentially
this
first
page.
This
is
the
account
opening
page,
so
we
can
collect
some
information
to
contact
the
owners
of
the
business
or
the
individuals
that
are
applying
for
the
capital.
D
The
second
page
is
more
for
kyb
related
address
information.
We
want
to
know
how
long
the
business
has
been
in
existence.
The
corporate
structure,
the
number
of
employees,
the
category
of
the
business
which
could
vary
for
example,
is
it
a
sas?
Business
is
e-commerce,
as
this
will
essentially
impact
the
analysis
that
we
perform.
D
D
We
tend
to
not
issue
capital,
that's
several
multiples
above
what
they're
currently
making
in
monthly
revenue
and
our
risk-based
pricing
algorithms
that
determine
the
contract
terms,
are
modeled
in
such
a
way
to
maximize
and
optimize
the
risk-adjusted
return
on
capital
for
us
as
a
firm.
So
all
of
these
inputs
are
quite
important
into
us,
actually
determining
the
terms
that
we
issue
to
the
business,
but
what's
even
more
important,
is
all
of
this
granular
data
that
we're
getting
access
to.
D
So
if
a
business
approaches
us
and
they
have
online
connections
to
banking,
accounting
or
payment
processor
platforms,
we
will
require
them
to
connect
at
this
page,
where
we're
going
to
be
essentially
pulling
in
transactions
from
different
deposit
accounts
over
the
last
at
least
90
days.
What's
really,
the
most
important
here
is
on
the
accounting
side.
D
We
end
up
taking
in
all
of
the
transactions
in
a
business's
accounting
software
system
since
inception,
so
this
could
go
back
several
years,
we're
also
pulling
in
their
financial
statements
whether
it's
income
statements,
balance
sheets
cash
flow
statements,
trial
balances.
All
of
the
pertinent
reports
that
would
allow
us
to
make
some
value
valid.
Underwriting
decisions
are
pulled
in
as
well.
C
B
D
D
Also,
if
there's
marketing
information
that
we
can
pull
in
google
analytics,
for
example,
we're
going
to
be
able
to
grab
that
on
this
page
as
well,
so
in
by
the
time
that
the
business
actually
completes
the
connections
and
authorizes
us
access
to
all
of
this
information.
We
have
a
very
good
picture
of
how
the
business
is
operating,
at
least
for
the
snapshot
point
in
time
as
well
as
historically,
and
that
forms
the
basis
for
underwriting
decisions.
D
This
next
page
here
is
more
kyb.
It's
it's
collecting
information
on
the
beneficial
owners,
and
this
is
no
different
than
any
typical
credit
application
process.
So
by
the
time
that
the
business
finishes,
this
application
they're
able
to
complete
it
in
under
10
minutes.
As
I
mentioned,
they
are
redirected
to
our
business
portal,
which
just
gives
them
a
quick
overview
of
the
amount
that
they've
requested,
how
much
they're
qualified
and
the
status
of
their
application.
D
So
for
this
particular
example,
we're
looking
at
the
application
was
completed
and
now
it's
under
review
and
then
now
it's
up
to
coral,
to
go
to
work
so
to
say
and
evaluate
this
business
for
financing,
and
so
the
next
part
of
this
demo
that
I'll
show
you
is
essentially
what
coral
sees
on
their
side.
So
this
is
our
what
we
call
the
coral
explorer.
It
allows
us
to
review
all
of
the
applicants
that
have
come
through
the
website.
D
It
also
allows
us
to
get
into
any
uploaded
materials
that
the
business
would
have
provided
through
the
business
portal,
so
articles
of
incorporation,
cap
tables
anything
that
would
be
necessary
for
us
to
perform
our
legal
due
diligence
would
be
pertinent
here
in
the
data
room,
but
really
what's
the
most
important
thing
to
notice.
Here
is
the
investment
score.
D
We
get
thousands
of
applicants
a
year
and
it's
important
for
us
to
not
spend
time
on
every
single
one,
but
really
just
take
a
look
at
the
businesses
that
have
a
high
risk
return
potential.
So
we've
developed
an
investment
score
that
takes
in
all
the
various
data
points
on
average
for
a
business,
we're
talking
roughly
about
ten
thousand
different
data
points
to
compute
a
score
between
zero
and
a
thousand,
obviously
the
higher
the
score
the
better
and
then
any
score.
D
That's
greater
than
740
is
what
we
would
consider
internally
as
a
triple
b
plus,
and
that
is
the
threshold
for
us
to
to
consider
investment.
So
I
have
a
number
of
fake
accounts
showing
here
on
the
screen.
This
is
our
portfolio
search
tab,
so
we
can
essentially
review
information
from
the
application
process
on
these
businesses,
which
gives
us
kind
of
an
overview
of
their
monthly
operating
cost
cash
balances
and
any
usual
information
that
we
might
want
to
capture
on
the
applicant
itself.
D
Now
this
is
just
high
level.
What's
really
the
most
exciting
part
of
what
we've
built
out
here
is
the
investment
report.
So,
as
I
mentioned
as
a
business,
it
completes
their
application
process.
We
automatically
generate
a
report
and
this
report
represents
a
snapshot
for
any
given
point
in
time
on
a
business.
So
we're
talking
about
company
information,
kind
of
address,
location,
team
information
who
are
the
shareholders,
so
this
would
have
been
inputted
on
the
ownership
page.
D
D
You
can
see
here
daily
weekly
monthly
snapshots
of
their
bank
accounts
on
a
consolidated
basis.
Over
time
we
can
see
transaction
summaries,
so
the
amounts
of
inflows
and
outflows
transactions
that
are
being
made
within
those
accounts,
their
balances,
any
nsf
and
the
sub
fees
that
have
may
maybe
have
been
triggered
as
a
result
of
mispayments
and
lack
of
liquidity.
D
D
We
can
get
a
high
level
snapshot
of
how
they
compare
against
other
companies
in
the
portfolio.
We
can
take
a
look
at
the
income
statements,
so
obviously
this
is
just
kind
of
a
fake
business,
but
you
can
see
expenses
over
time
how
they
trend
on
a
monthly
basis.
You
can
see
balance
sheet
data
assets,
liabilities,
equity
over
time.
D
You
can
see
cash
flow
statements
as
well,
so
any
split
of
cash
flow
between
financing,
investing
and
operating
activities
would
be
available.
Here
we
compute
financial
ratios
on
the
business,
and
this
gives
us
an
indication
of
you
know
the
profitability
leverage
activity,
liquidity
of
the
business
itself.
D
Obviously,
the
same
is
done
here
for
the
balance
sheet.
Finally,
we
get
into
some
of
the
more
relevant
metrics
for
making
investment
decisions
so
probability
of
default.
We
have
an
internal
model
that
is
used
to
compute
what
we
believe
the
pd
of
the
business
is
on
a
forecasted
basis,
both
in
the
event
that
we
invest
and
don't
invest
in
the
business.
D
D
Finally,
the
couple
of
last
few
sections
here:
valuation
we
want
to
know
actually
how
well
the
business
might
be
valued
at
in
the
future,
because
this
actually
impacts
future
funding
rounds.
You
can
think
of
our
interest,
our
investment
as
a
non-dilutive
instrument,
but
not
all
companies
always
look
to
acquire
debt
or
other
non-diluted
capital
options.
D
Some
do
offer
equity,
and
so
we
have
a
way
of
essentially
valuing
the
business
among
eight
plus
different
methodologies
that
are
pretty
common
in
the
industry
in
order
to
determine
what
the
value
of
the
business
might
be
at
future
financing
rounds,
which
helps
with
assigning
probabilities
of
future
funding
events.
This
last
section
here
is
more
about
benchmarking.
It's
really
comparing
the
business
against
not
only
the
portfolio
itself,
but
other
companies
within
its
sector
and
for
different
dimensions
of
revenue,
cost
of
goods
sold,
other
financial
ratios
etc.
D
So
we
can
determine
whether
they're
you
know
exceeding
expectations
or
where
they
fall
in
that
distribution
relative
to
their
peers.
So
at
a
high
level,
that's
the
business
report.
It
covers
a
lot
of
detail
on
the
business
itself
when
we
are
ready
to
make
a
financing
decision
on
a
business,
and
it
has
passed
an
investment
committee
review.
D
We
can
initiate
that
investment
from
within
the
portal
here
in
the
deal
summary
tab,
so
we
can
set
an
investment
date.
We
can
set
the
investment
amount.
We
can
modify
the
terms
of
the
investment
as
well
as
any
types
of
disbursements.
If
they
may
be
needed,
we
can
initiate
the
contract
creation
and
that
would
essentially
trigger
the
contract
track
to
be
sent
to
the
business
so
that
we
can
start
the
process
of
funding.
D
What
you'll
notice
here
on
the
side
is
there's.
Obviously
some
statistics
related
to
the
return
potential
of
the
business
relative
to
the
deal
parameters,
and
these
would
change
accordingly,
based
on
the
amount
that
we
decide
to
invest.
So
in
essence,
that's
what
coral
does?
We
are
a
capital,
as
a
service
provider
providing
revenue-based
financing
using
a
very
automated
technology
driven
system.
B
D
B
D
And
verify
that
it's
accurate,
even
if
it's
being
pulled
from
an
api
yeah,
so
we
don't
allow
the
business
to
necessarily
upload
information
that
would
get
then
run
through
our
models,
because
if
you,
if
everyone's
just
upset
uploading
different
excel
files
like
it's
almost
impossible
to
tell
which
ones
to
rely
on
what
are
the
fields?
There's
a
lot
of
inconsistencies.
D
So
you
say
that
yeah,
so
we've
got
to
make
sure
that
the
input
data
is
pretty
consistent
there
in
terms
of
the
apis
themselves.
We
use
for
our
banking
provider
mx,
which
is
well-known
financial
data
aggregator.
They
pull
data
directly
from
the
bank
accounts
themselves.
So
if
there's
erroneous
information
within
the
bank
account,
then
it
would
come
through,
but
we're
talking
about
people's
financial
data
and
most
banks
are
pretty
good
about
not
making
mistakes
in
terms
of
the
accounting
information
we
have
built
out.
D
Everyone
has
their
own
unique,
idiosyncratic
ways
of
doing
accounting,
but
on
a
general
basis,
we
we
undergo
what
we
call
normalization
so
we're
mapping
the
accounts
within
the
businesses
to
our
own
standard
hierarchy,
so
that
we
can
ensure
that
we're
making
apples
to
apples
comparisons
across
all
the
businesses,
regardless
of
their
own
unique
accounting
practices.
Moreover,
when
you
look
at
the
accounting
platform
data
that
we're
getting
in
many
accounting
platforms
will
allow
you
to
connect
your
banking
or
your
credit
or
your
loan
applications,
your
private
processors.
D
We
make
sure
that
they
submit
on
annual
basis
their
tax
filings,
which
we
can
then
use
to
identify
any
discrepancies
between
what
they've
reported
to
us
and
then
what
they
report
to
the
government.
There's
no
legal
requirement
that
we
put
in
our
contracts
for
cpas
to
be
involved
throughout
the
year.
But
you
know
if
it's
good
enough
for
the
government,
then
it's
good
enough
for
us.
Yes,
that's
pretty
good
standard.
A
C
So
we
we
have
a
massive
pipeline
of
assets
coming
through
core
right
now,
we've
been
scaling
the
origination
efforts.
We
we've
asked
in
our
mip
6
to
start
off
with
five
in
terms
of
the
vault
and
then
to
scale
that
up
to
20..
We
think
we'll
be
easily
able
to
fill
that
up
this
year,
we'll
likely
come
back
for
another
increase
once
we
fill
those
up
and
prove
out
our
model
with
you
guys
in
partnership.
A
B
C
C
Sorry,
it
sounds
like
a
little
connection
issue,
but
I
can
sort
of
repeat
the
question
and
the
answer
for
for
the
larger
group
and
for
the
video.
The
question
is:
what
is
the
target
client
sas
companies
what
size
or
maturity
we
are
targeting
companies
in
the
digital
economy,
including
both
sas
companies
and
e-commerce
companies,
they're
I'll?
Let
sort
of
derek
if
you
want
to
touch
on.
You
know
sort
of
the
the
average
size
of
the
companies
that
we're
seeing
so
far.
D
Yeah
so,
and
just
to
give
you
a
sense
of
like
minimum
eligibility
for
financing
for
us
is
at
least
fifty
thousand
a
monthly
revenue,
and
that's
that's
a
minimum
on
average
we're
seeing
companies
with
a
few
hundred
thousand
in
monthly
revenue.
You
can
think
of
these
on
kind
of
that
venture
scale
as
companies
that
are
pre-a
series
a
or
post
a
these
are
high
growth
companies
that
have
established
product
market
fit
they're
looking
for
excess
capital
in
order
to
scale
up
their
revenue
growth
activities.
D
We
really
are
gross
capital,
we're
not
working
capital,
as
nick
mentioned,
primarily
e-commerce
and
sas
almost
over
90
percent
of
all
of
the
revenue
from
these
businesses
would
be
generated
online
through
various
sources,
and
they
don't
necessarily
need
to
be
profitable.
But
what
we
tend
to
find
is
that
there
is
a
clear
path
to
profitability
and
a
trend
towards
cash
flow
positivity
over
time.
By
the
time
we
make
the
investment
high
level.
These
companies
don't
necessarily
need
to
have
any
prior
funding
rounds.
D
Many
second
and
third
time
founders
will
come
to
us
and
say
that
they've
kind
of
gone
through
the
the
venture
capital
life
cycle
before
and
ended
up
with
a
very
small
percentage
of
their
company.
By
the
time
there
was
an
eventual
liquidity
event,
and
so
they're
doing
it
a
different
time
or
different
way,
this
time
around,
where
they
want
to
essentially
access
more
non-dilutive
capital
options
for
them
to
see
that
growth
into
the
future.
B
C
Absolutely
great
question,
so
you
know
for
those
of
you
that
are
familiar
with
the
centrifuge
model.
It's
you
know,
typically,
a
two
tranche
structure
where
you
have
your
primary
tranche,
also
known
as
drop
and
your
secondary
tranche,
also
known
as
tin.
So
our
application
for
the
mib
6
is
for
the
primary
tranche,
the
drop
tranche,
which
currently
pays
out
a
10
apy
per
year
and
it's
a
two
year
asset.
D
C
D
B
D
D
D
D
24
months
is
obviously
the
investment
contract
term
that
we
are
working
with
under
fortune
five
and
we
measured
the
monthly
revenue
figures
and
the
payments
to
coral
over
that
period
of
time.
Assuming
that
investment,
what
we've
been
able
to
come
up
with
here
is
really
kind
of
a
high
level
summary
of
the
return
profile
of
that
portfolio
from
the
invested
businesses
using
that
back
test
design
and
what
we've
been
able
to
come
up
with
here
is
essentially
pre-loss
and
post-loss
figures
for
the
return
on
the
portfolio.
D
So
just
going
into
the
pre-loss
figures
here.
What
this
represents
is
all
the
cash
receipts
that
the
portfolio
received
over
that
period
of
time
from
the
24
month,
investment
period,
four
businesses
that
would
have
paid
coral,
a
royalty
and
a
contract
buyout
rate.
So
the
royalty
payments
would
be
received
on
a
monthly
basis,
and
you
can
kind
of
see
that
here
from
the
graph
and
then
the
contract
buyouts
would
be
made
after
24
months
duration
for
each
one
of
these
business
investments.
D
As
I
mentioned,
both
the
terms
of
the
royalty
rate
as
well
as
about
rate,
are
determined
algorithmically.
There
was
nothing
no
expert
judgment
used
as
part
of
this
back
test.
No
exceptions
were
introduced,
as
a
result
of
you
know,
call
it
qualitative
assessments
being
done
on
the
back
end.
This
is
a
pure
quantitative
back
test
based
off
of
the
results
and
the
data
that
we
have
access
to.
D
We
assume
that,
on
an
annual
basis,
we
would
have
essentially
a
loss
rate
of
about
16.5
percent,
which
factors
in
a
pd
of
19
and
a
loss
given
a
false
of
87,
and
we
applied
that
against
the
portfolio
payments.
So
if
we
assume,
on
an
annual
basis
that
16
and
a
half
percent
of
the
portfolio
is
not
ever
recovered
or
is
lost
in
default,
then
we
end
up
with
an
annualized
irr
of
about
35
36.
D
That
is
in
line
with
what
our
expectations
are
for
the
portfolio
that
we
are
building
with
centrifuge
and
fortune
fi.
We
believe
that
this
has
a
quite
a
large
spread,
a
buffer
from
a
risk
standpoint
to
cover
any
payouts
on
drop
in
addition
to
the
the
tin
allocation
itself,
which
is
you
know
made
by
us
as
partners
in
the
portfolio.
D
B
A
C
A
Great,
so
thank
you
guys
for
coming,
just
as
a
minor
update
next
week,
we're
going
to
be
speaking
with
kane
from
from
synthetics
and
we'll
have
the
call
slightly
later
since
he's
in
sydney,
I
believe
so
we're
going
to
have
it
at
nine
utc
or
maybe
it's
eight.
I
can
remember
so.
Yeah
join
us
next
wednesday
to
speak
with
the
synthetics
and
let's
keep
the
conversations
going
in
the
forum.