Welcome to Starport, SpacePunks
By Gina Keating
A new investment platform called Starport raised more than $50 million in commitments from the crypto community over Easter weekend in a signal from uber-wealthy tech savvy investors that decentralized finance — a major shift in startup funding — has arrived.
Starport, a venture between Walden Media co-founder Cary Granat and Ed Jones’ Immersive Management Holdings and digital assets and payment firm Gebo Group, is pre-selling several series of non-fungible tokens (NFTs) — rather than stock — to fund its own digital wallet, as well as Immersive film and theme park projects and a few smaller deals.
The NFT Spacepunk Network Access Card buys a seat at the table — a membership in the Starport platform that grants access to upcoming deals, known in cryptoparlance as “networks.”
Although “de-fi” networks are often used to crowdfund smaller digital projects like software or online games, Starport means to become a launch platform for mega-networks to fund real world investments that could range from collectibles to space exploration.
In a private Telegram chat that provided a running commentary on the sale, Starport’s new members, nicknamed “SpacePunks,” hailed the arrival of a democratic era in financing.
“Take us to the moon!” one member quipped shortly after the first NFT presale closed.
While critics say the emergent “de-fi” world is impenetrable to all but sophisticated cryptoinvestors and ripe for hacking and fraud, supporters tout a lower barrier to entry than commercial bank-backed IPOs, and a public blockchain ledger that lends unparalleled transparency. Crypto enthusiasts say the system encourages financial activism, with members able to examine network operations, including how profits are reinvested and employees arepaid.
If successful, a growing community of Starport investor-members also will be end users of the products and experiences they help create. Gebo Group says it will stand behind every project that Starport will launch.
Gebo’s co-founders are securities litigator James Wines, former Wall Street securities traders Serge Pustelnik and Alex Lubetsky and programmer and systems architect Dan Pustelnik. Licensed in New York and Washington DC, Wines has spent the past 25 years representing securities firms in complex litigation. Serge Pustelnik traded complex financial instruments and built back office and front-end trading systems before leaving Wall Street in 2015 in the wake of a Securities and Exchange Commission lawsuit. Pustelnik is fighting the SEC in the Second Circuit Court of Appeal.
I spoke to Granat, and Serge Pustelnik and James Wines, co-managing partners of Starport and Gebo Group about dreams, risk and putting a finger in the eye of the establishment.
(Answers were edited for length and clarity).
Q: Why choose a decentralized finance model for the network-type projects that Starport has in mind?
Serge Pustelnik: The traditional IPO process is inaccessible to most entrepreneurs. For any bank to consider you, you have to go through a very extensive underwriting process. It’s not like they’re going to say, okay, we’re going to do things for you and we’ll take a cut at the end if you’re successful. They don’t care, and their price is extremely high.
Most people don’t have the kind of capital to invest in trying to get more capital because that goes against all of the principles of business.
We’re in a point of economic evolution of decentralized finance. You now can bring more capital at higher speeds from more sources to fund more things easier and faster. And the goal is cutting out as many of the middleman pieces as possible to bring financing to projects … en masse.
So you can focus on mega projects — actually go to space versus just talking about it. You find the projects that are the most interesting and revolutionary and needed and viable, and try to send them … to the future.
Q: You say you’re a bridge between cryptocurrency and traditional finance. What does that mean?
James Wines: This (crypto) community has developed more and more projects that create better and better networks. They have developed more and more tools for using those networks, but they have not really concerned themselves or tried to reach out to traditional sources of funding or to traditional users of funding.
Q: Why not?
James Wines: Because they just haven’t needed to. Their projects are doing great. As far as they’re concerned, their coins are increasing in value in the way they expected them to.That is an untapped source of capital that we recognize and we know how to talk to. Wehave spent years trading and investing in blockchain and we know the language and we know what interests the community and most importantly we respect the community and what they have accomplished.
Now we hope to bring traditional aspects of financing to access that capital… that thus far has been directed almost exclusively towards building more amazing network tools that have yet to reach wide adoption outside the community.
Q: Is this like a crypto-backed IPO?
James Wines: I would say it’s more akin to a market shift. I can give two examples in recent history. One was the emergence of the individual investor … that fueled the tech rise and the IPO craze in the late nineties, early twenties.
A lot of that came from the ground up. It drove markets for the first time. It raised capital through IPOs for the first time in large quantities — participation by not just small groups, but large swaths of the investor community.
Another recent market shift … is the world’s recognition that there are a whole bunch of people in India and China, and they do stuff and they like stuff too.
Now we’re in a similar space with crypto. It’s an undiscovered country. They are friendly over there. They know what they’re doing. They are very smart. And they have built some amazing things.
We’re going to take some of these network tools that are phenomenal in terms of theirefficiency, their ability to distribute, their ability to be autonomous and transparent so thateverybody can have trust in the process. And we are going to deploy those tools in newways to reshape and rethink entire industries.
Q: So people will subscribe to a network by buying tokens, and then they can just trade the tokens or spend them in-network.
James Wines: So there will be network projects that will create networks and then tokens that allow people to use those networks.
(For example,) there are some networks that seem so cool — a network that’s gonna make dinosaurs fly through the air and come into my bedroom and do fun stuff with my kids, say. I am a smart, educated crypto adopter, who has made a lot of money thinking about the future, and the next thing I want to see is this flying dinosaur thing. I buy tokens and my friends buy tokens before it even exists. We, as users, help shepard the network we want into existence.
If it all goes right, everybody’s enjoying the dino network with the token that they bought either a year ago, or bought from people who bought it in the lead up. Then at launch everybody will line up at the gates with their tokens in hand and dinosaurs will start flying.
Q: Describe the type projects that Starport will be funding with Immersive Artistry — the Kind Heaven entertainment hub in Las Vegas and the Johnson Controls Hall of FameVillage in Canton, OH.
Cary Granat: We’re building mini Disneylands — physical locations that you can go through for hours at a time. It’s our version of a real Westworld, where you get transported into a space, ten-thousand people at a time. You’re really there. You’re walking around buying things, eating food, interacting with characters, and technology. It’s immersive reality, using everything from robotics to holograms, to actors to sets.
Author bio: Gina Keating is the author of Netflixed: The Epic Battle for America’s Eyeballs, Wondery Business Warspodcast “Netflix vs Blockbuster vs HBO” and the documentary “Netflix vs the World.”