A Leader in Blockchain Innovation and Liquidity for Digital Assets - tZERO Overview Q4 2020
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A Leader in Blockchain Innovation and Liquidity for Digital Assets tZERO Overview Q4 2020
Value Creation Has Shifted to the Private Markets
While 1990s tech start-ups grew more than 100x post-IPO, that public multiple is now below 10x
10,000x
Private Public
Growth in Enterprise Value
1,000x
100x
10x
1x
1990 1997 2002 2004 2011 2014
2Private Markets are Growing Rapidly
$7.3
($ Trillions)
$6.1
$5.3
$4.5
$4.2
$3.8 $3.9
$3.3
$3.0
$2.7
$2.4
$2.2 $2.2
$1.7
$1.2
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Sources: Bain & Co. 3
Private market capital includes: venture capital, buyout, private debt, real estate, and other private asset classesLimited Liquidity in Private Markets
Private Market Capital
$7.3T
Secondary Volume
$0.1T
2019
Sources: Bain & Co., Greenhill 4
Private market capital (NAV) includes: venture capital, buyout, private debt, real estate, and other private asset classesProblem
Private Markets are Illiquid, Inaccessible and Inefficient
Limited Liquidity Exclusivity of Assets Fast Settlement Manual Back Office
Liquidity is limited for private Average investors do not have With current infrastructure, Manual compliance and
companies and alternative assets. access to most private asset trade settlement can days, if back-office processes
Where liquidity does exist, the classes, such as commercial not weeks are expensive and time
experience is inefficient. real estate and pre-IPO equity. consuming.
5Solution
tZERO is a leading liquidity platform for private securities and digital
assets. We offer institutional-grade solutions for private companies
looking to digitize their capital table and trade on a regulated platform.
6Advantages of the tZERO Platform 1. Continuous Liquidity 2. Asset Democratization 3. Fast Settlement* 4. Automated Compliance 5. Regulatory Lead 6. Reduced Costs *Same day today, instant in the near-future; instant settlement would apply to transactions amongst self-custody accounts 7
tZERO’s Digital Security Ecosystem
tradeable securities: 3rd Party Broker-Dealers
(9 Subscribers)
ATS Subscriber
Brok er-dealers
‘subscribe’ to the
Brok er-dealer ATS, allowing their
investor clients clients to trade ATS These assets trade similar to
securities public equities. We float a private
mark et cap with an associated
tick er, offering ongoing liquidity.
*All information as of 2/28/21 8Revenue Model
Issuer Services Trading Licensing Technology
● Due Diligence & Tokenization Fees ● Digital Security and Crypto Trade ● Broker-Dealers
● Referrals / Commission Sharing Commissions ● Clearing Firms
Arrangements ● Recurring Issuer & Tech Fees ● Exchanges
tZERO also owns SpeedRoute, an established broker-dealer that facilitates the
trading of roughly 1% of the U.S. equity markets.
*Certain revenue streams apply only to activities that are carried out by subsidiaries of tZERO 9Snapshot of Digital Securities Pipeline
Signed Partnerships Select Digital Securities
1. 1. Alliance Investments*
2. 2. Tynton Capital*
3. 3. *
4. 4. Public Fund
5. 5. Real Estate
6. 6. Technology Company
7. 7. Real Estate Fund
8. 8. Biopharmaceutical Company
10+ Middle Market Investment
Additional Issuers Referred by Partners
Banking Referral Partnerships Established
Additional Referral Agreements with Issuance Portals,
Additional Issuers Not Shown
Tech and Real Estate Advisors in Process
11
*Denotes announced issuer agreementsStrong Growth in $ Value Traded
$3,334K
$14,462K
$6,197K $1,232K
$5,201K $834K
$2,393K $2,570K $490K $608K
$211K $363K
$170K $285K
October November December January February October November December January February
2020 2021 2020 2021
11Our Goal: Trade All Assets on One Platform
Public Securities Cryptocurrencies
tZERO's separate
regulated platforms currently
allow for trading private
securities and
cryptocurrencies. We plan to
enhance the platform’s
functionality to facilitate
transactions in exchange-
listed equity securities
(NMS) this year.
Private Securities
12Future Trading Experience
13
Subject to regulatory approvals and strategic/operational prioritiesRecent Wins
1. Signed partnership agreements with DigiShares and Realio. (new)
2. Signed partnership agreement with commercial real estate issuance platform Earn.re. – 3/3
3. Signed tokenization agreement with ROI Group to trade landmark real estate in Dubai. – 3/2
4. Signed partnership agreements with FON, Vertalo, and TokenSoft. – 2/3
5. Signed partnership agreement with Prime Trust to custody digital assets. – 1/27
6. Signed prominent investment bank to spearhead strategic capital raise. – 1/12
7. tZERO ATS filed to self-clear, reducing dependency on third-parties. – 12/30
8. tZERO ATS records $53M of volume, a 10x increase versus 2019. – 12/31
9. Signed ATS subscriber agreement with D.A. Davidson. – 12/10
10. tZERO Markets goes live. – 10/21
14Our Key Priorities
Assets Liquidity Experience
1. Tokenize Existing Cap Tables 1. Grow tZERO Markets Users 1. Streamline Markets Trading UX
2. Tokenize New Offerings 2. Integrate More Broker-Dealers 2. UX for Trading All Digital Assets
152021 Roadmap
1. Complete account migration from Dinosaur Financial to tZERO Markets. – Q2 2021
2. Migrate tZERO Crypto app to custodial solution. – Q2 2021
3. Security token trading with investor self-custody model. – Q3 2021
4. tZERO broker dealers self-clearing. – Q3 2021
5. Merged experience for tZERO Markets. – Q3 2021
6. NMS (public stocks) trading on tZERO Markets. – Q4 2021
7. Integrate 3rd party issuance platforms to allow onboarding of additional assets. – Ongoing
*Subject to regulatory approvals and strategic/operational priorities 16Experienced Leadership Team
Saum Noursalehi Amit Goyal
Chief Executive Officer Chief Technology Officer
15+ years of experience 20+ years of experience
Alan Konevksy Joel Quall
Chief Legal Officer Chief Financial Officer
20+ years of experience 25+ years of experience
Alex Vlastakis Rob Christensen
President, tZERO ATS VP of Product Development
20+ years of experience 10+ years of experience
Solomon Tesfaye Mike Mougias
VP, Investor Relations and
VP, Business Dev. & Capital Markets
FP&A
10+ years of experience
10+ years of experience
17ir@tzero.com
18Disclaimer
Inv estor Notice
Investors should note that trading securities could involve substantial risks, including no guarantee of returns, costs associated with selling and purchasing, no assurance of liquidity, which could impact the price and ability to sell, and possible loss of principal invested. Further, an
investment in single security could mean lack of diversification and, consequently, higher risk. Potential investors are urge d to consult a professional adviser regarding any economic, tax, legal or other consequences of trading any securities as descri bed herein.
No Offer, Solicitation, Inv estment Adv ice or Recommendations
T his document is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recomm endation for any security, nor does it constitute an offer to provide investment advisory or other services by tZERO or any of i ts affiliates, subsidiaries, officers,
directors or employees. No reference to any specific security constitutes a recommendation to buy, sell, or hold that securit y or any other security. Nothing in this document shall be considered a solicitation or offer to buy or sell any security, futur e, option or other financial instrument or to
offer or provide any investment advice or service to any person in any jurisdiction. Nothing contained in this document const itutes investment advice or offers any opinion with respect to the suitability of any security, and the views expressed in this release should not be taken as advice
to buy, sell or hold any security. In preparing the information contained in this document, we have not taken into account th e investment needs, objectives, and financial circumstances of any particular investor. This information has no regard to the sp ecific investment objectives, financial
situation, and particular needs of any specific recipient of this information and investments discussed may not be suitable f or all investors. Any views expressed in this document by us were prepared based upon the information available to us at the time such views were written.
Changed or additional information could cause such views to change. All information is subject to possible corrections. Infor mation may quickly become unreliable for various reasons, including changes in market conditions or economic circumstances.
Forward-Looking Statements
T his document contains forward-looking statements. In addition, from time to time, tZERO, its subsidiaries, or its representatives may make forward-looking statements orally or in writing. These forward-looking statements are based on expectations and projections about future events,
which is derived from currently available information. Such forward-looking statements relate to future events or future performance, including financial performance and projections; growth in revenue and earnings; and business prospects and opportuniti es. You can identify forward-
looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should ,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In
evaluating these forward-looking statements, you should consider various factors, including, without limitation: the ability oftZERO and its subsidiaries to change the direction; tZERO’s ability to keep pace with new technology and changing market need s; and competition. These and
other factors may cause actual results to differ materially from any forward -looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by tZERO, its subsidiaries or their
respective representatives, may not occur, and actual events and results may differ materially and are subject to risks, unce rtainties and assumptions. tZERO, its subsidiaries, and its representatives are not obligated to publicly update or revise any f orward-looking statement, whether as
a result of uncertainties and assumptions, the forward-looking events discussed in this document and other statements made from time to time by tZERO, its subsidiaries or its representatives might not occur.
About tZERO
tZERO Group, Inc. and its broker-dealer subsidiaries (tZERO) provide an innovative liquidity platform for private companies and assets. We offer institutional-grade solutions for issuers looking to digitize their capital table through blockchain technology, and trade on a regulated
alternative trading system. tZERO democratizes access to private assets by providing a simple, automated, and efficient tradi ng venue to broker-dealers, institutions, and investors. For more information on tZERO, please visit https://www.tzero.com/.
tZERO is not a registered broker-dealer, funding portal, underwriter, investment bank, investment adviser or investment manager, and is not providing brokerage, investment banking or underwriting services, recommendations or investment advice to any person, and does not provide
any brokerage services. tZERO takes no part in the negotiation or execution of secondary market transactions for the purchase or sale of securities and at no time has possession of investor funds or securities in connection with such transactions.
About tZERO ATS
tZERO ATS, LLC is a broker-dealer registered with the SEC and a member of FINRA and SIPC. More information about tZERO ATS may be found at https://brokercheck.finra.org/. Digital securities that trade on tZERO ATS are conventional uncertificated securities. At this time,
ownership of such securities is reflected on the traditional books and records of regulated market participants. In this docu ment, the term "digital" is used with respect to securities that currently trade on tZERO ATS to refer to the blockchain technology elements of a security that are
intended to enhance investor experience through added transparency but have no controlling or legal effect.
About tZERO Markets
tZERO Markets, LLC is a broker-dealer registered with the SEC and a member of FINRA and SIPC. More information about tZERO Marke ts may be found at https://brokercheck.finra.org/.
About tZERO Crypto
tZERO Crypto, Inc. is a wholly-owned subsidiary of and powered by the technology of tZERO Group, Inc. tZERO Crypto, Inc. and tZE RO Group, Inc. are not a registered broker-dealers, underwriters, investment banks, or investment advisers, and are not providin g brokerage, investment
banking or underwriting services, recommendations or investment advice to the users of the tZERO Crypto app. No broker-dealer affiliate of tZERO Group, Inc. is involved in the transactions and services offered by the tZERO Crypto app. tZERO Crypto, Inc. is licensed as an authorized
money transmitter in every jurisdiction in which it does business that requires such authorization. See the legal disclosures and list of tZERO Crypto, Inc.'s licensing authorities on https://www.tzero.com/crypto-app/licenses.pdf for more information.
SpeedRoute, LLC
SpeedRoute, LLC is a broker-dealer registered with the SEC and a member of FINRA and SIPC. More information about SpeedRoute, L LC may be found at www.finra.org.
19ir@tzero.com
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