Leveraged Gold-Backed Investment Vehicle

Many Crypto/Blockchain Companies have a large percentage of their net book value residing in crypto.

• Prudent governance suggests that some degree of diversification is justified and sensible. While all of us are very bullish on the new ICO/crypto/blockchain paradigm, and fully anticipate great acceptance and success in the future, recognize that such acceptance will not be overnight and that we are in a marathon, not a sprint.
• Of the 1,338 crypto tokens being traded today, many will drop out and while new ones will replace them
• In the M&A business, fragmentation and consolidation. Many of these companies will consolidate  and merge together and while some budding entrepreneurs employed in these companies will fragment and spin off into new companies. This goes on over and over again, throughout the life cycle.
• This means that prudent management will diversify some of their liquid assets and as part of that diversification to put some of these assets into safe and leveragable assets.

One highly-recommended strategy involves placing a portion of a company’s liquid assets into a safe asset such as U.S. Treasuries or physical gold. Economists assign these two assets an identical risk profile. Holding gold is the same as holding cash as is holding Treasuries. 

• The advantage of gold is that it is leveragable, meaning that you can borrow on that stable asset and utilize the additional cash to invest into higher return, albeit riskier investments while holding the staid and stable assets, which has the additional advantage that it is likely to appreciate
• If you are interested in hearing more about one of these hedging strategies or just want to open a corporate bank account or term deposit please contact us at Tango.
• You can also create a leveraged gold investment without opening a bank account.

Hard Asset Acquisition (M&A)

The managing member of Tango Capital guided a small dot.com company at the end of the last millennia (and in fact, spearheaded the registration of the very last IPO of the last century,  witch became effective on NASDAQ on December 27, 1999).  Now, while most of the dot.com companies who also raised millions of dollars as concept companies very few survived, however, this one did. However, it did not succeed based on its IT concept, in fact the concept itself was fatally flawed and failed completely. However, the company implemented several redemptive strategies. It used some of the capital formed in the offering to invest in hard assets in the form of corporate acquisitions of existing horizontally integrated, complimentary businesses.

• Use a portion of raised capital to purchase vertically integratable business that fit in with your business model
• This has the benefit of adding value to the balance sheet by using existing cash to purchase assets, acquire talent
• depending on the circumstances of the transaction accelerate progress on your own business plan.

Contact Tango for expertise and assistance in adding established companies to your organization. You can also clink here for a free book which although written to help business owners sell their companies to institutional investors it can also be helpful to strategic buyers in valuing and evaluating such transactions