Accelerate USA: Forward Industries' Kyle Samani and Special Guest

For sure. So, first off, it's great to be here. And appreciate you bringing me out, Kyle. So, YieldStreet was really founded with a very simple idea. The idea was, "Hey, all of the wealthiest people in the world and the biggest institutions are growing their wealth really through the private markets, through private credit, private equity, infrastructure, real assets, etc." And we wanted to make those products available to as many people as we could. And we wanted to do that digitally and seamlessly. So, lower minimums and very simple to engage with. Over the decade that I founded and led the business, we deployed over $6 billion and it became the largest direct-to-consumer alternatives platform for people to invest in these types of products. And, you know, it reminds me when we started the business was very similar to where we are today in terms of our ecosystem here with RWAs and the regulatory landscape. We launched YieldStreet right after the JOBS Act was passed. And nobody had ever solicited capital for real-world assets in private markets digitally at that time. The whole marketing rules, the whole regulatory landscape, the KYC, accreditation, qualified purchasers, all of that had to be reworked to live in a digital world. And we jumped in right when the opportunity became available and we really set out to do one thing different than anybody else was thinking of and that was thinking holistically about the customer's experience and the portfolios. So, not selling them one product, but rather helping them build wallet share and get multiple products. I think the greatest lessons learned there is in order to be successful in this ecosystem, you really need to solve for a couple of things at the same time. Number one, you need to build a beautiful user journey that educates the consumer and then invites the consumer in. Number two, you have to build a compliance framework where the issuers are going to be able to work with you and to bring their products forward. Number three is you have to have distribution. You have to be able to have your products available on platforms that are ultimately going to be able to distribute and scale in those products. Just bringing those products out front is not enough to actually get them to be undertaken by the market and be sold.

It feels exactly the same as it did in 2013 and 14 at that time where there's this tremendous interest, if not it's probably more exciting today. I would say there's three things. Number one, the regulatory landscape is like at a perfect moment in time, right? We have the Genius Act that was passed, we have the Clarity Act that I think we're all hoping for is going to come through very soon. We have an SEC that is a completely different posture than the last regime, a posture of inviting business, a posture of working together with companies and you have a moment in time where the industry is ready from a regulatory perspective to move forward. That's number one. Number two, you have institutional appetite. When we started the business, the institutions had no clue what we were doing. You guys at least have institutional appetite where the biggest asset managers are paying attention to what it means to be tokenized and what it means to enter DeFi and what it means for both efficiency but as well as distribution for them over time. And I think the third thing, the biggest thing, is we have 100 million Americans in the US that sit on the other side of the biggest brokerages. Think Fidelity, Schwab, E*TRADE, Robinhood, Vanguard, Interactive Brokers, etc. For over a decade, those two, the asset managers and distribution platforms, are trying to find a way to connect. The asset managers want their products sold to more people, better distribution, bigger audience. And the distribution platforms want to help their customers diversify their portfolios. They recognize 60/40 doesn't work. But the infrastructure hasn't been there yet. We weren't able to do it. That was the wall I kept running into. Today, with blockchain and crypto, we solve a lot of the issues that TradFi has been experiencing for a long time that doesn't or hadn't allowed us to connect the asset managers and the distribution platforms. That is what makes this moment in time incredibly exciting is these three things.

I'm not insulted yet. Give me another 6 months, maybe I'll be insulted. Well, first of all, I would say, listen, I owe you a huge debt of appreciation and gratitude and a handful of other people that have had the patience to allow me to ask all of my questions to get to a point where I can feel incredibly excited and confident about what the ecosystem is building. But I think that for me, YieldStreet was an incredible experience because it was so early in the technology innovation for financial services or particularly for alternatives market that we actually had to build so much of the middle office and back office because it didn't exist at that time. Today, fortunately, there are standalone businesses that do a lot of those things on their own. But what we learned was we kept running into different walls, whether it was on the reporting, the transfer of assets. See, all of these assets, Kyle, are static. So, you buy, let's say, a credit instrument or an equity instrument, so aviation leasing or a sports team, okay? The credit instruments, if they perform well, they're going to deliver yield over a period of time. That's it. The equity instruments, if they perform well, they're going to appreciate over time. That's it. There's no staking, there's no borrowing, there's no lending, there's no "Hey, I have this huge portfolio of private markets, can I borrow some money to invest in something else? Can I loop it?" No. "Can I borrow it to go buy a house?" No. And so, you have these static assets that were sitting dead in people's portfolios. The biggest problem with that, beyond it's a shame, is that it's going to be difficult to scale adoption in private markets and to get real wallet share if people have no liquidity and can't even find ways to create utility out of those assets. This community has changed that. By bringing these assets on chain, by bringing them into a token format, by enabling them to access DeFi, by having a regulatory framework that allows us to transact in these ways, all of the sudden, what was once a static asset is now a utility. To me, that is a way to truly scale the adoption of the private market product, which everybody's been wanting for so long. So, I think I understand the infrastructure of it, I understand the functionality of it, and I understand the utility that's coming forward, and that's what gets me really excited about what you guys hear and what this ecosystem is building.

So, I think the community here has done an amazing job building incredible technology and solving for a number of point solutions. I think where the opportunity is is to bring it all together in one cohesive ecosystem and to provide an experience where all of the sudden we can connect the issuers and the asset managers. In my mind, I think of it, you know, either as like a distribution operating system or as a toll road. And here's what I think is necessary. I look at it as a four-module solution. So, one, we have to get better at the user journey. Engaging with crypto products is notoriously difficult and clunky. And I think we can take, you know, interesting lessons and opportunities from other consumer products, other fintech products that have done a really good job at making complex products really simple. Right? The holy grail, if you will, would be that a product is tokenized on Solana, it goes into a credit and liquidity pool, and any token is available on Schwab, on E*TRADE, on Vanguard, on Robinhood. If you want to buy 3x Loop Prime, it's right there. You want to buy 3x Loop something else, it's right there. I don't have to know what happened in DeFi, I don't have to know about how it went from fiat to USDC to a prime token. All of that is happening behind the scenes, and we build a beautiful journey that has education, and it tells the customer, I know what your demands are in terms of your experience, and I'm here to serve you. So, that's one. Super important is the journey. Two is the regulatory and compliance wrapper. I remember when we first started going out to the market and trying to get asset managers to put their products on our platform, we were not able to convince the best, biggest managers to. So, we started out with the number twos and number threes. Where the unlock came when the KKR's and the Carlyle's and the Goldman's and the Fortresses started to put product on our platform is when we showed up to them and said, "Hey, here is generally a box, a framework from a compliance and a regulatory perspective that works. Here's the big law firms that we use, and here's how we can hand it over to you." And so, you're always going to have an exciting executive who wants to sponsor a new technology or a new idea, but when it hits the GC's office, all of a sudden it dies. We have to be willing to hold their hand and bring them along that process. Number three is the asset manager onboarding and servicing. So, if I showed up tomorrow and went to speak to an asset manager that I had a relationship with for a decade and did a lot of business with, I think the first thing they would say to me is like, "Well, which chain do we use? Who's going to do valuation? Who's going to do pricing? Like, what is a DeFi pool? Where do I go? How do I get distribution here? How am I going to get the liquidity here?" And so, we have to build that for them. We have to show them what it means not just to get from idea to live, but also what it means to do the tax documents and the dividends and the distributions and the whole life cycle that a customer and an asset manager need to experience together. And the fourth, which is really where I think you can use as the foundation, is the credit and the liquidity protocol. And so, the top three, ultimately what they're doing is they're bringing more and more interest into the ecosystem. They're bringing more assets, they're bringing more investors and more liquidity. Where is that going to flow through? That's going to flow through the TVL, the protocol. And so, I think if in my mind, if you really want to win and you really want to scale, you don't just want to own or build one of the point solutions, you actually want to own the entire ecosystem. And that doesn't mean you have to build it, you have to own the tokenization piece or the valuation piece, right? There are great providers, whether it's a securitizer or Chainlink or whatnot. It's about bringing it all together and delivering a cohesive experience to the industry so that you can accelerate adoption across the entire ecosystem. Those are the four modules that I see in terms of where I think there's enormous opportunity. And ultimately I think like it's going to be built here, right? It's this ecosystem, this room, this conference, the people around the world who are focused on what you guys are building.

Do I need to answer that in this room? So, what we think, but you know, we have other guys here. I think very simply, number one, it sounds so obvious, but it's so important, it works. Right? It's true, it's tried, it's tested, it has trust in it. That's really important. Number two, speed. Number three, it's cheap. Number four, it has massive scalability. And so, I think, you know, I talked to a lot of people in this industry, walk through this conference hall, introduced by a lot of the folks here to different people, and people are quoting me like the hundreds of millions or the billions of dollars that have been transacted here. And I think that's incredible, and that's amazing, and that's something everyone should be proud of. In the grand scheme of the financial ecosystem and the RWA ecosystem that we're going after, it's nothing. And so, you need to not think about what 10x or 50x looks like, you need to think about what 100, 1,000, 10,000x looks like. And you have to remember that the biggest issuers and the biggest distribution platforms have more to lose by burning trust with their client than by not engaging with us. And so, we have to build on technology that they will trust and that they believe can scale as big as the industry is.

I think if somebody here is working for a leading asset manager, I want to talk to them. If somebody here is an investor, a liquidity provider, wants to deploy capital in the space, I want to talk to them. If somebody here is excited about building really hard things, but works really hard, is a great team player, and wants to do this together, I'm based out of New York. I'm looking to find amazing people to do this with. So, if you're any of those three, or just generally someone I can learn from, find me. I'm new to the space, but I'm super excited about it.

Awesome. Thank you.