A Conversation About Crypto-currencies and ICOs with Andy Bromberg

Andy Bromberg's Early Entrepreneurial Path

• Founded web design and marketing ventures in high school primarily as an alternative to traditional entry-level jobs rather than a deliberate pursuit of entrepreneurship.
• Built multiple revenue-generating websites around personal interests (e.g., soccer cleat reviews, Mac internals) before attending Stanford University.
• Took "Startup Engineering" at Stanford taught by Baljit Srinivasan (now Coinbase CTO), a practical class covering code deployment and version control that launched the Stanford Bitcoin Group in 2012–2013.
• Co-founded Sidewire in 2014 with co-founder Tucker, a platform designed to facilitate expert political discourse without public noise, aiming to replicate Twitter with only high-signal participants.
• Raised a seed round from approximately 44 angel investors and Spark Capital to validate the Sidewire concept before the 2016 US election cycle.
• Acquired ~1,000 high-quality supply-side participants (senators, candidates, analysts) but failed to achieve user retention, noting that users preferred "bite-sized" sensational content over deep, multi-minute conversations.
• Wound down Sidewire in mid-2017 after determining that neither the core product nor potential pivots (e.g., subscription services) could achieve venture-scale returns.

CoinList and Token Economics

• Launched CoinList in late 2017 as a collaboration between Protocol Labs and AngelList to conduct the Filecoin initial coin offering (ICO).
• Defines a token as a scarce digital asset representing ownership in a decentralized network where no central entity retains control after launch.
• Cites Filecoin as a primary use case: a trustless storage market where users stake tokens to guarantee file integrity, with "verifiers" mining new tokens by validating storage.
• States that tokens function as infrastructure for transacting value, whereas the internet is infrastructure for transacting information.
• Highlights that 150%+ of 2018 venture capital funding was raised through ICOs, yet argues this volume signals market immaturity and a lack of due diligence norms rather than industry strength.
• Notes that only ~0.02% of companies contacting CoinList (5 out of ~2,500) met their criteria for a valid token sale in the last year.

Strategic Applications and Comparisons

• Identifies the ideal candidate for tokens as a business where parties inherently distrust each other and refuse to use a central intermediary (e.g., a "Russian Airbnb" scenario).
• Cites Airbnb as a poor candidate for tokenization because the platform provides sufficient trust and value services to justify a centralized intermediary.
• Contrasts token sales with equity financing:
  • Startup Benefit: No formal governance rights for token holders; founders retain full control.
  • Startup Risk: Lack of incentive alignment; token holders may sell immediately upon price appreciation, decoupling their interests from long-term company health.
  • Investor Benefit: Immediate liquidity and the ability to trade on secondary markets within days.
  • Investor Risk: No access to private company updates, monthly reports, or direct founder engagement.
• Observes a trend toward "staged" token sales and vesting schedules, suggesting the industry is slowly converging toward venture capital norms to improve incentive alignment.

Regulatory Landscape and Future Outlook

• Classifies the current market as "pre-nuclear winter" but acknowledges the rise of Security Token Offerings (STOs) as a complementary, not alternative, infrastructure.
• Explains the distinction between transmitting information (traditional internet payments requiring third-party ledgers) and transmitting value (blockchain tokens where the holder controls the asset directly).
• Predicts a future of many tokens but few blockchains, with most assets built on established standards (e.g., ERC-20 on Ethereum) rather than individual chains for every project.
• Affirms that network upgradability is possible via "forks," allowing the community to diverge if the core developer team makes unwanted changes.
• Advises entrepreneurs to conduct reference checks on investors, noting that a refusal to allow contact with past portfolio companies is a significant red flag.
• Remains cautious about widespread token adoption, emphasizing that most businesses do not require the decentralized architecture that tokens provide.