Tapping into simplified crypto with CHEQs

00:00:04:24 – 00:00:33:03
Unknown
Hello, I’m Anthony, co-founder at SeedLegals, and every day I talk to amazing founders on SeedLegals. And today I’m talking to JP from CHEQs CHEQs.com a stablecoin company, and they’re a UK company now doing a Delaware flip. So we’re going to talk about stablecoins. We’re going to talk about Delaware flips. We’re going to talk about – well a whole range of things and founder journeys.

00:00:33:03 – 00:00:59:05
Unknown
So JP hello. Tell us a bit about CHEQs. Well Anthony thank you for having me. CHEQs is a project that’s been running for a couple of years now. It’s been in R&D and stealth for a long time. And it’s basically what’s been called a non-custodial neobank. Now, non-custodial is a bit of a mouthful, but it basically means that the people who run a non-custodial platform are in charge of their own money.

00:00:59:05 – 00:01:20:05
Unknown
So with a bank, you’re actually giving money to the bank and they manage it on your behalf. And in non-custodial setting, you manage yourself. Now, there are a lot of platforms out there today that enable you to do that, but they’re quite awkward and difficult to use. And so what we’ve built is a platform that’s as nice to use, as simple to use as a fintech.

00:01:20:11 – 00:01:45:05
Unknown
People have called it something akin to revolute, but that is self-custody or self custodial. So that’s really quite exciting. And the platform is called CHEQs. Okay. So who’s your target audience? Is it everyone? Do I need to own crypto? What I’ve used put money into crypto. Walk me through as a typical person with a regular bank account, looking at, crypto, looking to hedge things when I would use CHEQs. Of course.

00:01:45:07 – 00:02:09:15
Unknown
So we’ve built CHEQs to respond to the need of a lot of businesses and a lot of people to benefit from the advantages of blockchain. And there are numerous advantages – speed, low cost and things of that nature. But a lot of people weren’t able to use them in a compliant environment. So what we’ve built with CHEQs is a platform that helps businesses,

00:02:09:17 – 00:02:33:24
Unknown
we’re targeting SMEs at this stage and we’re targeting professionals – so freelancers, digital nomads – to use stablecoins as their current business account. Because, the advantage of stablecoins is that they don’t fluctuate towards the company, to the coin that they use, or they’re paid to and then they’re used everywhere the same in the world. So we’re looking at professionals and SMEs.

00:02:34:01 – 00:02:51:22
Unknown
Okay. So on SeedLegals not that frequently, but occasionally founders drop us a note going, my investor wants to send crypto and then we don’t really know the answer. You know, we explain, you’ll need a wallet. Make sure it’s a company wallet, not your own account. Otherwise you get a tax issues if hundreds of thousands of pounds

00:02:51:22 – 00:03:09:23
Unknown
go to you or in, whatever cryptocurrency. And then you send to the company. Also, beware of exchange rate variations. You thought you raised a million, but now it’s either 2 million or half a million, and it’s your butt on the line if the exchange rate goes the wrong way. So you’re going to help fix all of this.

00:03:10:00 – 00:03:31:22
Unknown
You know, if I’m a company, I can now much more easily create a company – you’re calling it an account or a wallet? We’re calling it an account. Okay, so every person who joins CHEQs does a KYC, as you do with a bank. We want to make this a safe space. So a KYC or a KYB in the case of businesses is, for us not a bug but a feature.

00:03:31:22 – 00:03:51:04
Unknown
It’s making the whole ecosystem safe. And when people, once people join, they get an account. And that account is tied to an identity. So we can definitely have an account for a company versus an account for an individual. And then they can decide to put money onto there, through a credit card, through a bank application, through a bank transfer.

00:03:51:06 – 00:04:11:03
Unknown
And then they have their accounts on the blockchain completely safe, completely guaranteed, available to do with as they as they want. Okay. So I’d like to say you’re going to make, you know, opening a crypto account as easy as a bank account, but actually, the number one winge in founder chat groups in the UK is opening a bank account.

00:04:11:05 – 00:04:32:15
Unknown
The banks don’t approve you. If you suddenly get a foreign investor or a shareholder, they’ll close your account. Hopefully with CHEQs, that’s going to be way better. I think that’s the idea. It’s a non-custodial platform, so we are not actually holding the money for you. Therefore, we have no legitimacy to decide whether you can or cannot receive funds for from different parties.

00:04:32:17 – 00:04:58:23
Unknown
We do have and we do want to make this a safe space. So we do control access with KYC. But then you are in charge of your account. We can’t block you. We can’t decide how you use your funds. It’s a completely self custodial platform. And we just a tech enabler for that platform. Okay. So what’s your background and what got you out of bed one day to go I think I’m going to create a stablecoin non-custodial bank.

00:04:59:00 – 00:05:24:12
Unknown
Well I’ve been in tech my whole life. I’ve always enjoyed building software because I’ve always thought it was a really great way to affect a lot of people. I’ve been on the business side of tech for a long time. I’m not a developer myself. I’m more of a business and strategy person. And the reason we built CHEQs was we ourselves were often getting paid in fiat, or in traditional money.

00:05:24:14 – 00:05:47:05
Unknown
And a lot of our clients wanted to pay us and stablecoins or in crypto. And it was just very difficult to actually do that compliantly. We were trying to reconciliate transactions, trying to give that to our accountant and trying to put that, you know, into our accounting program. It was just impossible. So we gave up, like most of the world, until two years ago, we thought, okay, enough is enough.

00:05:47:05 – 00:06:10:09
Unknown
We need to do something about it. And so we actually invented something completely new. And that led to several inventions and we’re sitting on nearly five patents today. But the core invention was the cheque. So the old paper cheque that you, or I, maybe not so much the younger generation, but used every day, on the blockchain.

00:06:10:09 – 00:06:40:24
Unknown
So we’ve created basically a way to guarantee that a transaction will go to the right person, which can’t be said with crypto today. So it’s really quite exciting. You’ve invented the blockcheque. Okay. Exactly. All right. So, let’s switch gears to, Delaware incorporation. So, you know, SeedLegals is now in the UK, France and the US, and, I think an increasing number of founders are now looking to, of course, do business in the US, raise from US investors.

00:06:41:01 – 00:07:05:20
Unknown
There’s a perception that UK investors are a bit meh. Lots of money in the US, much higher valuations. And then some founders are also thinking about ‘should I incorporate my company in the US and it becomes a top company and I raise in that company’. So tell us about your experience, what you’ve done, your decisioning in a few moments to help others, you know, decide to flip, not flip and so on.

00:07:05:22 – 00:07:27:04
Unknown
Yeah, of course. So we initially registered the company in the UK. London is one of the biggest global hubs in finance. We are fintech firm and we thought that raising money in the UK would be easier from, people in the UK, but outside of the UK as well, a lot of investors in Asia, would be comfortable investing in the UK.

00:07:27:08 – 00:07:56:00
Unknown
Maybe less so in the US. So that was the initial intention. But then changes in the political landscape in the US. So we’ve had elections, we have, changes in appetite for stablecoins and cryptocurrency as well as a tightening in the Europe and in the UK around what stablecoins and what cryptocurrency and blockchain in general should be.

00:07:56:02 – 00:08:28:11
Unknown
Made us think it might be interesting to explore. So we did explore a Delaware flip. We did explore the US. And indeed I’ve raised and sold companies never in the US before. But indeed the valuations are much, much bigger. When I was in conversations in the UK, speaking to investors, conversations were about investing 100, 200, 250K. Same conversation with VCs in the US or even with angels 1 million, 1.5 million, 2.5 million.

00:08:28:11 – 00:08:52:19
Unknown
So I’m basically adding a zero to my initial round. So it’s really exciting, but it is an adventure that was, interesting because there are a lot of differences in the US and the UK. Notions that are different about issued stock or issued shares, which aren’t the case here. So, I did use and I did get great advice from, from SeedLegals.

00:08:52:21 – 00:09:19:23
Unknown
And it’s great advice because it’s something one should definitely look at before going there. All right. So thank you. Now you know historically, you know thinking of incorporating in the US was a hugely complicated and expensive affair. You’d pay, you know, 30 or 50,000 pounds to lawyers and so on. But actually from what I’ve seen, certainly for early stage businesses, there’s a pretty simple thing, set of things you can do, you can incorporate in the US, in Delaware for less than $500.

00:09:20:00 – 00:09:45:01
Unknown
We’re going to productize the share for share swap. We’re going to Productize keeping SEIS and being able to offer SEIS and EIS to UK investors in the Delaware company. And on SeedLegals, you’ll be able to jump from your UK to a US company. Just you know, flipping things. So my goal is to make it dramatically easier. But that doesn’t mean of course companies should flip, but if you want to then that’s good.

00:09:45:07 – 00:10:05:09
Unknown
So sometimes people are doing it for different reasons. And in your case, what’s interesting, you mentioned the valuations. And now I’m spending half my time in New York, when I go to founder events in London, people are looking to raise, you know, 250K as the first round. In New York, I’m looking for $1 million. Yeah. So and maybe on the West Coast it’s 3 or $5 million.

00:10:05:09 – 00:10:24:16
Unknown
So in fact between East and West Coast it’s even different. But at least you can multiply by four. One thing to note before everyone gets too excited is if you’ve ever hired people in New York, the salaries are at least twice as large, if not larger. So your money is going to go faster if you’re actually hiring people in New York.

00:10:24:16 – 00:10:49:14
Unknown
So any top tips or advice for anyone watching this about should you, you know, when is it worthwhile raising from US investors? Are there any conditions before you even reach out to them? Otherwise, you’ve just created more inefficiency in your fundraising process by instead of focusing on UK angels, you’re looking in the wrong place and people say “come back later”.

00:10:49:16 – 00:11:14:24
Unknown
Yes, definitely. I think I would look at it from a business perspective before a fundraising one. If you’re a tech company, if you’re a global company, the US is definitely a more interesting place to raise. If you focus on the local market in the UK, of course it doesn’t make sense. And in this day and age, it’s actually quite easy to have a US company, but then have your cost centers globally spread.

00:11:15:01 – 00:11:35:02
Unknown
So you could still have marketing and front facing people in the US, but have your back office, you know, in other areas, have your tech team in other areas. And of course, the salaries are quite different. And if you’re raising 5 million, to spend in the US, that’ll get you so far. But if you’re raising 5 million to spend in the US and elsewhere, that will get you a lot further.

00:11:35:02 – 00:11:55:07
Unknown
So I would definitely consider it. All right. And of course, the investors can send the money and thanks to CHEQs in stablecoin. And then you’ve got it wherever you want it easily enough. So JP, thank you so much, everyone watching if you’re interested in a stablecoin business or personal account, it sounds like CHEQs.com is the way to go.

00:11:55:07 – 00:12:02:07
Unknown
And to contact you jp@CHEQs.com. So thank you very much. Thank you Anthony. Thank you for having me.