THE STORY

The client approached BoCG with an idea around blockchain-based flash loans. A thorough review of the flash loans industry unveiled an opportunity to develop a solution for cash advances based on commercial properties generating healthy net operating incomes. The vision for the platform was to democratize real estate investing around $100 tokens that would fund property owner cash advances. The idea of Sansbank was born.

The founder of Tracer Consulting, a firm specializing in selling franchise businesses believed that there existed significant blockchain and crypto currency. A retired Marine Corps captain, Josh Emison understood what grit was all about. After retiring from the Marines, he wanted to build a future for himself and for people like him. He had always been intrigued by real estate but had never had the kind of capital required to invest in it. The franchise consulting business exposed Josh to property lending and blockchain technology and he knew that he was onto something. The challenge was, he did not know where to start. A Marine always finds a way and Josh packed a bag and went to San Diego to meet an investor who specialized in young entrepreneurs. While the investor did not pan out, during the trip, Josh met Chris Ha of BoCG. They struck up a bond and this marked the beginning of Sansbank.

THE SOLUTION

During the discovery process, the BoCG team developed a comprehensive blockchain market analysis to highlight opportunities in the industry while at the same honing in on the company’s desired “northstar” or vision. The team also engaged in rigorous research of existing service providers to ensure that what we wanted to build was innovative. Following the discovery, the team was convinced that a platform providing commercial loans based on future net operating profit rather than equity collateral provided a novel approach to traditional lending solutions. The blockchain approach allowed for transparency and speed in the process. Most importantly, the long forgotten “everyday American” now had access to a low-entry real estate investment option. The idea had been formed.

Armed with an idea, the team moved to the engagement phase where the idea was further developed and pressure tested. The first phase included writing a proper business plan. The purpose of the business plan is to delve deep into all aspects of the new venture. The team conducted complete deep dive assessments into the following areas:

• Market overview and size review, complete with 5-forces analysis
• Customer segmentation and demographics to determine TAM, SAM and SOM
• A variety of valuation methods to determine the optimal methodology for Sansbank
• Competitive landscape assessment with SWOT, and risk and mitigants analysis.
• Sales and marketing development including products and services, pricing, promotion and distribution and placement.
• An operational roadmap was developed for the project highlighting key processes, assets, IP, suppliers and milestones.
• An ownership, management and board plan was outlined and the company was formed and registered.
• A complete 5-year financial plan, outlining assumptions, revenue model, cost structure and funding requirements, was developed.
• Exit strategy

Armed with complete business requirements the team began vetting service providers. The main area included tokenization partners as this was a pivotal part of the platform. Legal partners with experience in SEC regulations, real estate and lending were also vetted. To facilitate the partner search the team developed simple-to-understand collateral to describe Sansbank’s go-to-market, technology and revenue strategy. An illustrative explainer video was also created. The result of the lengthy selection process netted DigiShares the contract for tokenization partner. The legal contract was won by Orrick.

The final phase of the engagement term was to develop and execute a capital raise plan. The business plan called for around $7M in capital for Sansbank to achieve cash flow positivity although about $1.5M or 20% was required for the MVP. The team developed a raise strategy around a $1.5M convertible note. By syndicating the raise from many smaller investors rather than institutional players allowed Sansbank an optimal growth and valuation opportunity as the completed MVP would likely increase the company’s valuation in time for a Series A raise.