Vimba - NEM Ventures First Portfolio Investment

Announcements NEM Ventures
#3

NEM Ventures Team;

Congratulations on your first investment as a VC.

There are a few questions I hope you can address:

  1. Why was the investment structured as a convertible note instead of taking equity in Vimba upfront?

What are the investor protections mentioned? If possible, could you shed some more light on the planned scaling and investment rounds of Vimba?

  1. When will the note mature?

  2. What is the coupon on the note?

  3. What was the valuation of Vimba when the transaction was entered into?
    How does this translate into the equity NEM Ventures will receive upon maturity of the note?

  4. I notice a deviation from the “Delegated Financial Authority” process, found on page 14 of the “Mandate / Public Proposal” linked on the NEM Ventures website.
    Per that process, investments between $50k and $750k “must be released and managed in at least 3 milestones, ideally more”.
    It is mentioned in your post that the note will “be released in 2 tranches”.
    Is my understanding correct that this is a deviation from the process outlined in the Mandate? If so, why is this the case?

  5. If possible, could you release the full terms of the note?
    At the very least, could it be clarified:

  • Is the conversion of the note mandatory?
  • What rights (governance & management), if any, were acquired via the investment?

  1. Are there any equity dilution protections structured into the note?

  2. Were there any other investors in this round of funding?
    If so, did they enter with terms similar to those of NEM Ventures?

I look forward to your reply.

3 Likes
#4

Thanks for the congratulations and questions, some answers below.

From the type of questions you clearly know the subject and likely have experience. A lot of what you are asking for is commercially sensitive information will not be shared publicly, I’ve flagged that were possible in the answers.

  1. Why was the investment structured as a convertible note instead of taking equity in Vimba upfront What are the investor protections mentioned? If possible, could you shed some more light on the planned scaling and investment rounds of Vimba?

It was selected because it best meets the needs of both NEM Ventures and Vimba. Investor protections are the standard ones you would expect in a convertible note and nope detail of the note is private.

Scaling intention through 2019 and early 2020 is to expand on the UK launch that happened late in 2018 and launch in Australia via partnerships that are already in place. In parallel the team are actively engaged with partners in European countries but as you would expect with Crypto and traditional banking, that process takes time so the exact order and country selection is being made still.

  1. When will the note mature?

Private information

  1. What is the coupon on the note?

Private information, there is a coupon in the note though and an interest rate (also private).

  1. What was the valuation of Vimba when the transaction was entered into?
    How does this translate into the equity NEM Ventures will receive upon maturity of the note?

Private information until conversion occurs

  1. I notice a deviation from the “Delegated Financial Authority” process, found on page 14 of the
    It is mentioned in your post that the note will “be released in 2 tranches”.
    Is my understanding correct that this is a deviation from the process outlined in the Mandate? If so, why is this the case?

Correct it is a deviation. We put that text in primarily to guide earlier stage companies to give control over XEM liquidation rate (in addition to intending to put it in transaction agreements). Vimba are sufficiently mature in the start up stages and their specific core business relates to management of digital assets. After discussion with the management teams of both companies we are comfortable that Vimba have these management processes already from existing business and the admin associated with additional tranches was decided not to be necessary.

  1. If possible, could you release the full terms of the note?

No, its not public domain appropriate information

At the very least, could it be clarified:

  • Is the conversion of the note mandatory?

No it is a non-mandatory

  • What rights (governance & management), if any, were acquired via the investment?

Private information

  1. Are there any equity dilution protections structured into the note?

Yes

  1. Were there any other investors in this round of funding?
    If so, did they enter with terms similar to those of NEM Ventures?

As per the PR links shared above (not in our original forum post though) Ventures was the sole investor in this round

3 Likes
#5

Many thanks to Rio and the NEM team up in Tokyo for translating the Vimba announcement to Japanese for us

1 Like
#6

Fantastic update on Vimba and well done to NEM Ventures. We believe that this will be a big enabler to the NEM ecosystem and NEM Foundation is in full support of this announcement with more updates to come.

Personally, I look forward to have Vimba come to Australia soon as well!

1 Like
#7

Vimba is not promoting NEM.
Very weak.

Why did you invest?
You should strongly comment as an investor.

#8

Perhaps you have some constructive ideas for what you like to see?

XEM is fully supported in the main markets they operate in - New Zealand and UK, and they are expanding into Europe, Xem is planned to be supported in those markets as they enter.

Instant buy/sell is also being integrated into the platform as per the update, Vimba also plan to support catapult but have some immediate projects they are working on while NEM co-ordinates plans/dates for that so they can plan the work alongside other projects.

If you have some constructive suggestions for what you would like to see then perhaps you can make them?

#9

What do you think of seeing this?
Do you think you are doing your best?

#10

https://twitter.com/vimbaco

They don’t talk about anything in SNS.
Not touching.

Why???

1 Like
#11

Thanks for bringing to my attention I will have a chat with the team.

1 Like
#12

The situation has not improved.

#13

Hi @GodTanu I have spoken with the team a few times, apologies for not coming back to you on here.

The situation has improved in that we are noted in the section on the home page alongside ETH as other cryptos that can be invested in. We also have equal position within the platform itself when you create an account.

One of the purposes of Vimba is to appeal to non-crypto investor/savers who want to get their first experience in crypto. Whether we like it or not, that often (almost always?) is BTC. So the most effective way for Vimba to onboard that type of customer is to keep the message very simple and get them to sign up. They then look to cross promote from BTC into XEM and ETH as time goes on and the customers become more comfortable.

It is a fine balance for the team between providing enough information and not intimidating new crypto investors to the point they don’t open an account. As a business they are finding the best way to achieve that at present and are trying a very simplified message as an alternative because the loss rate was to high with the more complicated on. Ultimately NEM doesnt benefit if the customer doesn’t sign up either, so hopefully this way they can onboard more customers and increase the exposure in that way.

They are also focussed on some improvements to the onboarding process in general which we hope will increase their sign up rate, which again puts NEM in front of more people who are starting their crypto education.

Hope that makes sense?

3 Likes
#14

Please be concise.
Your text is hard to read. sorry.

All “results” can be expressed in a concise language.

#15

Sorry, I will make it in more concise points, (it will appear more direct which is not my intention but hope it is easier to understand):

  • Vimba have put nem logo on the front page of the website equal to ETH

  • Vimba attract new crypto investors, who are interested mostly in BTC so message needs to be simple

  • In the My Account page, they show investors other cryptos (XEM and ETH)

  • Vimba are experimenting with best way to sign new customers up, BTC seems to work best

  • In the experiment they are trying to keep message very clean and easy for new users to make sure more sign up

  • It is good for NEM because new users are not really interested in XEM when they don’t know about crypto yet, but they sign up with BTC and Vimba offer XEM later when customer is more comfortable - I think is a good plan and increases our awareness

  • It is a good business decision to focus on signing up customers, as an investor the community also wants the company to succeed and keep existing, as well as helping NEM

  • Vimba is an existing business that helps NEM ecosystem, not a NEM specific project, NEM Ventures didn’t expect NEM to be the only focus but to have equal place with ETH - we do have

2 Likes
#16

Is this a lie?
Why have you invested in something that has nothing to do with this NEM community?
I consider investing in this project to be a conflict of interest for NEM. Is there an adhesion with Techmy?

#17

I don’t think this is a good idea.
I want you to invest in a realistic NEM specific project.

I think Luxtag is the only vigorous activity among the projects invested by “NEM funds”. Other invested projects have little progress information. As a result, I am no longer interested in the NEM investment business :pensive:

3 Likes
#18

Well, I believe NEM Ventures takes a mid-long term view on the investments and Vimba and other companies invested by NEM Ventures should not be restricted to be NEM-focused only.

LuxTag is a good example and we need more projects like it but there are others who will work across multiple platforms and tokens too. Personally, I would like to see more NEM-specific use cases or now, more Symbol-related use cases so I think the feedback is received and we hope to see more great projects receiving investment in time to come.

2 Likes
#19

For example, does that mean that it is OK for NEM ventures to invest in the Ethereum only project?

1 Like
#20

Governance is not working in its current state.
The balance is unknown because of NDA.
There is no transparency.

And transactions are not increasing.

Eventually, Is it embezzlement of Community Fund Money?

#21

Nem ventures has a strict policy around investing only in projects that benefit the nem ecosystem in some way. So projects that only build on ethereum would not fit the nem ventures investment criteria.

1 Like
#22

@GodTanu I respect you as a long standing member and contributor of the nem community, but this is a step too far.

NCF funds are managed professionally, with the best interest of the broader project in mind.

Please refrain from this kind of accusation. It’s a completely unfounded and inaccurate accusation.

As for transparency, what would you like to know? We recently released a 3 part series (also translated to japanese) on nem ventures activities, which includes release of the company articles, trust deed, trust account , the projects we have invested in and the stage of development they are at, among other details.

If there is something specific you want to know that hasnt been covered, let us know and we will do our best to update you, within reason, but in the mean time, please tone it back and try to remain respectful as the above kind of comments are not ok.