Navigating Web3 Operations with Sarah Luehrs from Union Labs

[00:00:00] Umar: This is Sarah Luehrs, Chief Operating Officer at Union Labs.

[00:00:04] Umar: While Sarah started her career in the Navy working on an aircraft carrier, she now sits at the intersection of finance, operations, legal, HR, serving as the backbone that supports the web3 builders.

[00:00:18] Sarah Luehrs: A lot of this is new, and so a lot of times just setting up a chart of accounts in QuickBooks, for example, like most people haven't done that to account for crypto, right?

[00:00:31] Sarah Luehrs: And so it it's okay to ask questions and to find people and experts who have done it before or who are doing it.

[00:00:38] Umar: Sarah, do you have any advice for people working on a token launch right now?

[00:00:43] Sarah Luehrs: Token economics has evolved over time. So that's something that's sort of like a work in progress until you sort of decide what's best for our community, our network, the investors and the team.

[00:00:57] Sarah Luehrs: And there's a time limit between when you do your valuation and when you have to file your 83(b) election with the IRS.

[00:01:04] Sarah Luehrs: So that was totally my responsibility to take care of that and to make sure every token grant recipient understood why they were doing it and and how to do it on time.

[00:01:14] Umar: Welcome to The Accountant Quits podcast, where we help accounting and finance professionals learn how to manage a business using crypto.

[00:01:22] Umar: In the past two years, Sarah has built systems from scratch to scale a web3 startup, including structuring legal entities like Foundations and Token SPVs, managing fiat and crypto treasuries, learning the emerging web3 tech stack, including crypto subledgers, hiring remotely and more.

[00:01:42] Umar: For someone looking to transition into web3, what advice would you give them?

[00:01:47] Sarah Luehrs: I think my advice sort of stems from.

[00:01:57] Umar: Sarah, welcome and thanks for taking the time to be here. 

[00:02:02] Sarah Luehrs: Thanks so much for inviting me. 

[00:02:04] Umar: You're actually the first guest that I have, which is also an Alumni of the Crypto Accounting Academy. So I'm also more excited to be recording this today with you. 

[00:02:15] Sarah Luehrs: That's so cool. Yeah. I'm actually surprised to hear that.

[00:02:19] Umar: Yeah, you are. Hopefully there'll be many more in the future. But to start, can you share with us your background, how you became interested in blockchains two, three years ago and your story of transitioning as a former US Navy into the Web3 industry. 

[00:02:36] Sarah Luehrs: yeah, of course. So I started my career in the Navy as a Nuclear Surface Warfare Officer.

[00:02:42] Sarah Luehrs: I was stationed in Hawaii first as a Communications Officer and then moved to South Carolina where I went through nuclear power school. It's a year long school where you do six months of classroom training, and then up one year of on the job ship work type training, and then you get to go to your nuclear powered warship.

[00:03:03] Sarah Luehrs: My warship was an aircraft carrier. I was stationed on the USS Enterprise in the machinery division and had two machinery divisions and looked after several of the plants there was actually four power plants on the Enterprise. So, several of the plants at different times while I was stationed there, you know, over a hundred sailors.

[00:03:24] Sarah Luehrs: And my main function at that job was really to run the power plant, maintain the watch, do maintenance, make sure that everything was ready for anything, ready for war fighting. So that also included the personnel as well. So a lot of called it intrusive leadership there.

[00:03:40] Sarah Luehrs: So I had one more job in the Navy that was a desk job that sort of allowed me to explore what I wanted to do when I got out of the Navy.

[00:03:47] Sarah Luehrs: So I also did business school at night for a master's in business and living in Southeast Virginia. There's a huge logistics port here, port of Virginia and I thought for sure that's where I was gonna end up in the maritime industry. I thought it was the perfect intersection of everything I'd done to date sailing ships, engineering.

[00:04:09] Sarah Luehrs: I did ocean engineering in college and then business, right? So I thought I was gonna be a ship broker, and it's kind of like a real estate agent for ships and for room on cargo ships and all this kind of stuff.

[00:04:20] Sarah Luehrs: But during that time I also got married and had our first child and so was sort of staying at home with her and my best friend from college contacted me. She'd been in blockchain for about two years by then. She needed somebody to do the AML/KYC for a token offering that her company was doing on a platform called Tokensoft.

[00:04:41] Sarah Luehrs: So I agreed. I wasn't doing a lot of stuff for work at the time. So I was working, in the morning before my child woke up, you know, 5:00 to 7:00 AM.

[00:04:52] Sarah Luehrs: During nap time and after bedtime teaching myself compliance, learning the platform they were doing their token launch on, getting familiar with what it was that they were offering and what it meant and why it was going to be such like a global offering. So that was my start into web3 and it kind of snowballed from there.

[00:05:12] Sarah Luehrs: There weren't so many people who knew how to do that. So, I got the opportunity to support a few more token launches on that platform, Tokensoft and then eventually they hired me to run it for the company from within and worked my way up to the Head of Compliance and Client Support, User Support, Customer Support, sort of the the main point of contact between the company and our clients as well.

[00:05:38] Sarah Luehrs: So that's how I got started in web3. And along the way, learned so much mostly about compliance and token utility, token communities. What motivates people to want to buy a token, to hold a token, those types of things. Also really learned a lot about like blockchain explorers mostly Etherscan.

[00:06:00] Sarah Luehrs: We did a lot of reconciliation of the token sales between like our platform and then Etherscan. So got super familiar with that as well.

[00:06:08] Umar: And so that was your first stint into web3, working at Tokensoft, and then two years ago you joined Union Labs, right? As first as the Head of Operations, and then you got promoted to their Chief Operating Officer.

[00:06:23] Umar: How did that come about? Why did you want to leave Tokensoft and what was appealing into the new Head of Operations role for you at the time? 

[00:06:30] Sarah Luehrs: Yeah, I left Tokesoft at a transitional time personally. We were moving and I needed just to have some time to establish roots in a new city and stuff like that.

[00:06:42] Sarah Luehrs: So that was a personal decision that I made and then, was looking to re-enter the workforce like pretty shortly thereafter.

[00:06:50] Sarah Luehrs: Had a mutual connection to the founders at Union and they were a team of six engineers and they just needed somebody to take care of all the logistics and the operations day to day, you know, payroll, that kind of thing.

[00:07:05] Sarah Luehrs: So, you know, had a couple calls with them, got the opportunity to get started there.

[00:07:11] Umar: Okay, cool. So this podcast today for the listeners, it won't be a technical interview about Union. Sarah is gonna be sharing her experience working in operations at Union, but I still want to ask you before we proceed, can you share what Union is about?

[00:07:26] Sarah Luehrs: Yeah. So Union is building a Zero-Knowledge enabled interoperability layer. It's actually a Layer 1 based in Cosmos where IBC lives. That's inter blockchain communication. So inter blockchain communication allows different blockchains to move assets and messages in a secure non-custodial immutable way.

[00:07:52] Sarah Luehrs: So I, the way that I kind of think about it in the most basic terms is that Union's building a bridge and we're doing so in the most web3 ethos focused way, right? So there's no third party custodian of your assets. We don't rely on oracles. What we do is consensus verification between disparate blockchains, which entails doing a zero knowledge proof of the state of each of the blockchains to establish that connection.

[00:08:21] Sarah Luehrs: And then we can facilitate the permissionless transfer of assets and messages between blockchains that wouldn't normally be able to interact with one another.

[00:08:29] Umar: For example. Can you share some examples of blockchains now being able to interact with one another? 

[00:08:35] Sarah Luehrs: Yeah. So the first and foremost example, the sort of gold standard, what we were trying to develop from day one was the interaction of Cosmos and Ethereum.

[00:08:47] Sarah Luehrs: So that's sort of the gold standard and then we've been working on also L2 interactions, so Arbitrum, Base. We also have interactions with BOB, Corn, and say many more, many more to come. I think what's most unique about the way that we are able to integrate all of these connections is that you can move from Chain A to Chain C in one click.

[00:09:16] Sarah Luehrs: We've also developed a few other proprietary products that are baked into the protocol now like State Lenses that allow you to do that.

[00:09:24] Umar: Very cool. Alright, so now we'll dive deeper into your role as a web3 COO, Sarah.

[00:09:32] Sarah Luehrs: Okay.

[00:09:32] Umar: So in the intro I mentioned that your role spans everything from treasury management, legal compliance, HR, token strategy. Now that you'll be launching a token very soon. So you're really wearing so many different hats, right?

[00:09:45] Umar: So I want ask you, looking back at when you first started at Union Labs, what were some of the biggest challenges you faced as the Head of Operations back then and now with the two years that you've worked at Union, what processes maybe that you have developed that just make your work more effective today? 

[00:10:04] Sarah Luehrs: Yeah. So I will say that when I joined Union, like I said, there were six engineers and a multisig and a dream to become the blockchain of blockchains. So, I really took it from there. I think my first real task was actually they had identified somebody they wanted to hire as Chief of Strategy.

[00:10:27] Sarah Luehrs: You know, had a BD like that sort of a function. You know, over time these roles, they evolve when you are such a small company with a small reach and then they get bigger and bigger. You kind of redefine yourself as you go along. So, the person that we, that the team had identified to hire required a work visa.

[00:10:45] Sarah Luehrs: So that actually requires like a lot of things on the company side to be able to facilitate a visa for a US company. So that was my first task and that actually involved a lot of the foundation for the operation of the company going forward. For example, you know, just we needed a bank account, so we needed a way to pay in fiat an employee.

[00:11:14] Sarah Luehrs: We needed a way to report all these things. We needed an EIN number. We needed an office, what else do we need? Lots of other things. Oh, of course we needed, taxes. We needed all of that stuff set up. So to facilitate hiring a US employee and on top of that, an employee that required a visa.

[00:11:34] Sarah Luehrs: So we also worked with a lawyer to get his visa transferred to us and all of that. So that was my first task, but it also encompassed a lot of the other things that we needed anyway. So bit of a two for one.

[00:11:46] Umar: Alright, so you had one Multisig, you didn't have a bank account. How long did it take you to open a bank account?

[00:11:53] Sarah Luehrs: Yeah, that's a really good question. I think, back then, actually it was really hard to get a bank account as a crypto company. So it's a lot about like how you posture yourself as a software development company. I think it was at the height of operation 2.0 where banks were really hesitant to support crypto native companies.

[00:12:15] Sarah Luehrs: So. all that being said, it didn't actually take that long. I was lucky to find like a good bank recommended from some other operator friends that I in contact with, and we all support each other with these types of what kind of bank did you get, like what are the benefits of that bank, et cetera, et cetera.

[00:12:32] Sarah Luehrs: Is it insured? All the, all those kinds of things. 

[00:12:35] Umar: And so fast forward today, what would you say are the areas that take up most of your time on a monthly basis and yeah, what are the tasks that are more like the one-off kind of task? 

[00:12:47] Sarah Luehrs: Yeah, sure. I think as I mentioned before, the role has really evolved over time and the good thing is as you tackle one task, you sort of set yourself up for the next time you have to do it. So, establishing a bank account, getting your QuickBooks set up, integrating with a sub-ledger, getting all of those things to tie together, establishing a routine for monthly books, all of those types of things. You know, once you lay the foundation, you don't have to redo it. But I will say that every month each one of these tasks, while I don't have to set it up for the first time, do require a lot of time and attention to detail, and there is always something new to tackle every month.

[00:13:35] Sarah Luehrs: So maybe we've added a new asset to our bank account or to our crypto assets that we need to incorporate. We did an NFT launch and I have to account for all of those things and it's not as straightforward as you might think it is 'cause it doesn't integrate in an easy one-to-one way.

[00:13:55] Sarah Luehrs: You kind of have to finagle the systems to get them to tell the story of what you're doing, on their terms, right? So you have to manipulate what's happening into the language that QuickBook knows. 

[00:14:10] Umar: Okay, so we'll cover tooling later, but there's a question which comes to mind is in your role as the COO, how much are you touching the bookkeeping part of Union?

[00:14:20] Umar: Like do you have an external accounting firm doing all of that, or how much are you actually involved? 

[00:14:27] Sarah Luehrs: Yeah, so what works for us right now is that I am the most involved with the day-to-day expenses and invoices and all of those types of things. So for us, it works for me to prepare everything. So I prepare all the books, I comb through the block explorers and get all the information.

[00:14:50] Sarah Luehrs: I upload everything to our sub-ledger. I reconcile all of our credit card and invoice statements and all that kind of stuff. And then I have an accounting advisor who officially closes the books for me. So it's like a double check for me because I'm not a CPA, but I do have somebody sort of looking over my shoulder to make sure everything's correct.

[00:15:10] Umar: Okay. That's awesome. So before we go into the, your other tasks, so we'll dive into your other task in more detail, but I want to ask you something about what are the, some of the secrets to having a CEO and COO harmony basically. So this CEO-COO relationship, it's often compared to like a business marriage build on trust, communication, and a shared vision.

[00:15:33] Umar: So from your perspective, what are some of the secrets to building that harmony between your CEO and how do you, Sarah, as the COO stay aligned with the CEO's vision to be executed and how do you, how does also the CEO stay in sync with all the operational realities that you have to drive? 

[00:15:54] Sarah Luehrs: Mm-hmm. I think this definitely can go a lot of different ways.

[00:15:59] Sarah Luehrs: I know that in different companies sometimes the COO is more of the figurehead and like face of the company than the CEO just depends sort of on the personalities of the two sort of filling that role. For us, our CEO is absolutely the visionary and the figurehead of the company. He's acutely aware of the attention economy.

[00:16:24] Sarah Luehrs: He is incredibly smart, been working in blockchain for a long time, he's been an engineer and a builder from the start, but just has all these other talents and is really an effective CEO. So, he picked a pretty good COO in me in that none of that stuff is high energy for me and all of anything that's a low energy task for him is a high energy task for me.

[00:16:48] Sarah Luehrs: So I'm very organized very logistical thinker. You know, one thing leads to the next, and the next can keep track of monthly tasks, can do all of the HR tasks and people management. Not necessarily that he doesn't do that, I'm just saying like day to day, sort of one-off questions, getting people set up on different systems, those types of things.

[00:17:12] Sarah Luehrs: You know, I really just am down in the weeds, kind of like doing these day-to-day interactions within the company. I do other things like also the company as well. But for the most part, I think that the relationship needs to kind of come from the personalities of those two figureheads, right?

[00:17:33] Sarah Luehrs: Like what's low energy for the CEO should be high energy for the COO, so that one can like trust the other to just do. You know, and not have to be micromanaged.

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[00:19:25] Umar: Now Union Foundation, you recently announced an upcoming token launch, and we'll dive more into your role in preparing for that launch in a moment.

[00:19:34] Umar: But first, I'd love to talk about the finance and treasury side of your job. So Union did a Series A raise of 12 million in early 2024 and as much as you can share publicly what's been the biggest challenges for you in managing a treasury that spans both fiat and crypto? 

[00:19:53] Sarah Luehrs: Yeah, so it's really interesting 'cause when you work in web3, you can get investments in a lot of different forms, right?

[00:20:00] Sarah Luehrs: So you can get wired transfer, you can get USDC, you can get USDT so you do have many assets to consider and manage as you move along. I would say some of it's not as difficult as you think, you can set up like automatic investments in your bank account. Not necessarily investments, but like a higher yield like savings account, for example, and have all that set up to automatically move when you're checking account gets low, those types of things.

[00:20:29] Sarah Luehrs: So that's pretty easy and you don't need to have a lot of background information to do that. I will say that the crypto part can be a little bit more difficult in that there's a lot of friction built in on purpose when you're moving crypto.

[00:20:44] Sarah Luehrs: Anytime you know you wanna move money out of your multisig, that's a coordination that you have to do with multiple parties.

[00:20:50] Sarah Luehrs: And that's on purpose, right? The more friction, the more security you have on that type of stuff. 'Cause if you send your crypto to the wrong place, you know it's gone. Nobody's gonna, nobody's gonna pull it back for you or help you recover it. There's no centralized institution that's there saying oh, you messed up that account number. Yeah, we can try to get it back or the recipient, like bank is gonna be like, this doesn't match the name or anything like that. So once, once you send that crypto, as everybody here knows it's gone, it's out of your hands so.

[00:21:22] Sarah Luehrs: That being said, that extra friction does make it difficult to do real dynamic, like treasury management. I would say that what we have been wanting to do and is more of a capital preservation strategy. So like really low risk, but these types of things aren't as easy, I think, as you, as they could be. I think that a lot of protocols tout good rewards and low risk, but even getting your assets to those platforms can pose a problem, right? For whatever reason USDT isn't the avenue for a lot of protocols to earn yield. Like you have to be able to swap into USDC first and then put your assets into a protocol to earn yield on that. I know that there's other, you can do USDT, but the ones that are really low risk and a little bit easier, more of like the, the trend that makes sense for us are kind of difficult.

[00:22:19] Sarah Luehrs: And then if you have to swap into an entirely different asset, like an alt asset for example, like you could spend 2% or more like swapping into this new asset in order to try to get like a reasonable yield and then you've already spent half of your return just getting to the protocol and then if you wanna come back, you're spending some more money to be able to swap outta that asset into a stablecoin and then maybe if you need to off ramp to fiat. So all of those fees aren't really advertised when you are like trying to get into a yield opportunity. 

[00:22:58] Umar: Now, you mentioned before that you are using a sub-ledger and you obviously have a lot of on chain transactions.

[00:23:05] Umar: This podcast is about educating people about how to manage a business using crypto. I want to ask you, what are some of the main use cases you have for crypto inflows, if so, or outflows today at Union and the kind of tooling stack that goes along with all of this? 

[00:23:22] Sarah Luehrs: Yeah, I think we have a lot of the traditional inflows and outflows.

[00:23:26] Sarah Luehrs: We pay people all over the world to do different stuff for us, different contractors we pay, we have community leaders that hold events for us that need money being sent over crypto rails. We have event opportunities that need to be paid. We pay lawyers, we pay the accountant, all of these types of things.

[00:23:47] Sarah Luehrs: So a lot of it really is bill pay, the tooling stacks for bill pay, mostly anything in crypto. I use Franklin.

[00:23:54] Sarah Luehrs: Franklin's a really great option for people who need to be able to pay employees or contractors, or even just one-off invoices. It integrates directly with QuickBooks and makes that journal entry for you so that makes it super easy and also it's a treasury or it's a smart contract treasury based system, so it's super secure and you're a lot less likely to get all of that spam that you get like to a multisig and stuff like that.

[00:24:24] Sarah Luehrs: So yeah, that's the most of what we're spending money on. But I would say there's also this like unique, which might be interesting to your listeners, thing that we have with the NFT.

[00:24:36] Sarah Luehrs: We launched an NFT on Stargaze in, I'm not even sure when, maybe January. Anyway, so it was an NFT giveaway, and then all of those NFTs were available like on a marketplace, right.

[00:24:53] Sarah Luehrs: We actually have a royalty fee payment that comes anytime any of those NFTs are sold and they go into the treasury for that NFT. So that's one thing that we need to be able to track is like that very small percentage. It comes from anytime that Whale Sharks sold between anybody. So irrespective of whether or not it comes to like our we have a couple of accounts that have these NFTs in them and we'll repurchase them as well.

[00:25:20] Sarah Luehrs: When we repurchase them, we have to record how much they're worth and then we do new campaigns from time to time to give the NFTs back away to the community. So we're not reselling them from our accounts.

[00:25:34] Sarah Luehrs: But you know, that's an expense too. That's a giveaway expense that we need to book separately in QuickBooks. So it's sort of this coordination between the royalty fee payments, which you can't find on the block explorer, by the way, booking the value of the NFT, which you actually have to get, like per transaction within the source code of those transactions from the block explorer.

[00:25:57] Sarah Luehrs: It's also not available on an export. And then tracking how much each NFT is worth and as they're given away, booking that expense for that specific NFT. So it can get pretty complicated. But super important to do it well. Okay.

[00:26:15] Umar: So Sarah mentioned Franklin. We actually had the CEO Megan Knab on the podcast a long time ago on Episode 41, if you wanna check that out.

[00:26:25] Umar: And also on our toolings page, if you go to theaccountantquits.com/tools, Franklin is also offering you a special deal so you get two months free, basically when you first onboard to Franklin. So if you wanna check it out. So Sarah, like you said, you use Franklin for invoicing, payroll. Is there any other web3 or actually web2 tools that's been particularly useful for you to run your operations?

[00:26:50] Sarah Luehrs: Yeah. I'll also just add that Franklin also helps me facilitate benefits payments, all the reporting that you need to do to the IRS — 1099s, W-2s, tax withholding, all that kind of stuff. So just stuff that would be like really hard to do from a spreadsheet. So it facilitates all of that kind of stuff for us.

[00:27:08] Sarah Luehrs: So I can't recommend Franklin enough. It's made my job infinitely easier and their customer support's really good. Other tooling that we use is our sub-ledger. We use Breezing, which is a great tool. It also integrates directly with QuickBooks. We use QuickBooks. We use our bank account and then I also like, as just like a personal efficacy thing, I take snapshots of our accounts every month and save those off probably don't need to do that, but I do it anyway. 

[00:27:40] Umar: Perfect. Thanks a lot for for sharing. I always say that the sub-ledger is the most important web3 tooling that one would need when running a business with crypto.

[00:27:49] Umar: Obviously then a tool like Franklin is also super helpful for everything payroll, invoicing related and I mean for the listeners, we've also had, the Founders of Breezing in an earlier episode that was episode 77. If you wanna learn more about Breezing.

[00:28:06] Umar: Continuing on, I want to go through, yeah your role in the token launch, basically. So it's not the first time you've been directly involved in preparing for a token launch. You worked for Tokensoft before, but now you are working on the token launch in a different capacity. Can you give us like a behind the scenes look at what these past month have been for you?

[00:28:27] Sarah Luehrs: Yeah. Yeah, definitely from the Tokensoft side it's a much different approach than being on the token issuer in the company side.

[00:28:39] Sarah Luehrs: I'll say that I started this job almost two years ago and from that day I've been preparing for the token launch. There are a lot of legal things to set up, lots of different entities. Service level agreements between those entities. So lots of work and coordination with our legal team, lawyers in different countries to settle that up.

[00:29:02] Sarah Luehrs: Obviously the investors who are going to be part of the token launch but in the last month specifically, it's been a lot. We established a little bit over a year ago a Union Foundation. The Union Foundation's actually its own entity, separate from ours. But as we prepare for the token launch, we are working together.

[00:29:25] Sarah Luehrs: But the foundation's main focus is for the longevity of the Union network and then the software development company where I sit is gonna be the service provider to that network. So just a layer of separation there.

[00:29:38] Sarah Luehrs: Yeah. It's hard to distill it down to the last month 'cause I feel like we've been focused on it for years. 

[00:29:45] Umar: But let's see. If you had to provide I mean you, you said you've been thinking and working on this for a long time.

[00:29:50] Sarah Luehrs: Yeah.

[00:29:51] Umar: If, for people working on the token launch right now, if you had to think a timeline of how everything first started a year or two years ago that led up to this TGE that is coming up very soon.

[00:30:04] Umar: So for example, all the investor paperwork that you had to prepare, building out the token economics, setting up token related contracts with the team. The tax implication on token vesting, the 83(b) tax election return that you have to file, kind of those checklists for people already or currently working on the token launch as well.

[00:30:23] Sarah Luehrs: So I think, the token economics has certainly had a starting point and has evolved over time. So that's something that's like a work in progress until you decide this is gonna be what's best for our community, our network, the investors and the team. Some of that comes into some of that includes lessons learned from other projects that have launched basically between when you originally crafted these token economics and then you know, when you're planning to do it.

[00:30:55] Sarah Luehrs: So we've seen some inflationary problems on similar networks between those two periods of time and have adjusted our token economics to help address some of those other issues that other ecosystems have experienced.

[00:31:12] Sarah Luehrs: So there's an ongoing modeling thing that needs to happen as you learn more about like how big your community is all these types of things so it's like a living and breathing thing until it's executed, right? So there's that.

[00:31:26] Sarah Luehrs: And then for team tokens, these are definitely a consideration that the CEO makes with some of the other founders to incentivize and reward core developers and core team members based on their commitment to the project, how long they've been there, other things like that and the tax implications for that. 

[00:31:49] Sarah Luehrs: We definitely were aware of this long time ago. Did a similar thing when I was at Tokensoft. So I was very up to speed on how you have to do evaluation and there's a time limit between when you do your valuation and when you have to file your 83(b) election with the IRS.

[00:32:06] Sarah Luehrs: So that was totally my responsibility to take care of that and to make sure every token grant recipient understood why they were doing it and how to do it on time.

[00:32:15] Sarah Luehrs: So just a lot of one-on-one guidance through that process. I think for investors, we've had a really good investors who haven't been too demanding and are happy to get our monthly updates. So we do a pretty thorough monthly update about what's going on in the network, the roadmap ahead, events we've gotten to stuff like that. We haven't gotten any complaints there.

[00:32:39] Umar: Now, in two recent episodes that we had, we explored the legal side of token launches and how to structure entities in jurisdictions like the Cayman Islands, BVI, and Panama. My guests on those episodes were two lawyers, but from an operator's perspective, having been directly involved in setting up these entities, I wanna ask you, what was your role in the formation of the foundation and the token SPV, and was the process as straightforward or were there unexpected challenges along the way? 

[00:33:10] Sarah Luehrs: Yeah, absolutely not straightforward. I think when, so first and foremost, I did listen to those episodes, by the way. I think that understanding why you're going through all of these things like why are you setting up an entity in a different country?

[00:33:27] Sarah Luehrs: Why does it have a subsidiary? All of these types of things. It's just why are we going through all this? And then you kind of have to break it back down to the operational considerations that you make based on the laws that you have now.

[00:33:43] Sarah Luehrs: So understanding that as a US company, we're subject or could be subject. There's been a lot of ambiguity up until now and it's still ambiguous to be honest about what is a token? Is it a security, is it not a security? Like how can we as a company continue to innovate and build while minimizing our risks of just getting shut down, right? So understanding how all that stuff plays together really helps move things along. Like internally you say, I have to hire a Head of Foundation. Well, First I need to establish a foundation, then I need to hire a head of foundation.

[00:34:24] Sarah Luehrs: The head of the foundation like can't be like another person from the US. Like why can't it be another person from the US? You can't have you know, your your US person managing a Cayman Foundation, it kind of, you know, negates the tax benefits of that foundation.

[00:34:38] Sarah Luehrs: So all of these sort of intricacies of like understanding why the lawyers are telling you to do these things and being able to explain it within your company to keep things moving forward. So one of the major issues we had for a while was building out the foundation with people and support that were a good fit. So finding a Head of Foundation that had experience launching a token, managing market makers, trying to, or communicating with exchanges that also wasn't an appropriate jurisdiction, right?

[00:35:15] Sarah Luehrs: So there is that and then also making sure that you had an operational support structure that was also in an appropriate jurisdiction and somebody that you could trust too.

[00:35:27] Sarah Luehrs: These are the types of people that are gonna be on the custody solution at the Foundation. They're gonna have partial responsibility for your assets for the lifeblood of your network, right?

[00:35:37] Sarah Luehrs: So I probably interviewed five or six different operational companies before we settled on one. We interviewed different directors as well.

[00:35:48] Sarah Luehrs: Ownerless foundations have directors and supervisors, independent directors and supervisors. So interviewing them trying to find the best fit, the legal team that's gonna support you needs to be extremely responsive.

[00:36:01] Sarah Luehrs: A lot of times things come up and they need resolved very quickly. You need somebody that can also communicate well between your law firm in the US and then the other law firms like that you have established. So yeah, it's not straightforward. It's a lot of work and I think that anybody, you need to also really be skeptical of what people are offering you because this is becoming an established entity structure and people are becoming aware that you need service providers in different areas and they'll try to get a cut of what you have to offer and maybe not.

[00:36:39] Sarah Luehrs: Working in the best interest of your organization. Exactly. 

[00:36:43] Umar: But I wanna ask you that Head of Foundation, is that a person, a full-time employee. Does he have to be living in the Cayman Islands or is that like, are you outsourcing it to a service firm?

[00:36:57] Sarah Luehrs: We did not outsource it to a service firm, and I wouldn't actually recommend anybody do that because it is a really intense full-time position.

[00:37:06] Sarah Luehrs: The Head of our Foundation actually doesn't live in Cayman, but they also don't live in the US and it really is like a presidential role where you are driving a lot of the token operational like things.

[00:37:20] Sarah Luehrs: So you are on purpose as a Head of Foundation leading all of those conversations and preparing for the token launch. It's you first and then you have support behind you.

[00:37:32] Umar: You mentioned earlier you have to be skeptical. What were you referring to? Is skeptical in what way?

[00:37:38] Sarah Luehrs: Yeah, I think, we live in a really remote first industry and there are definitely like service providers who will catch on to the need for certain services and stuff like this, and just seeing through their sales pitch and like also trying to validate referrals or references because I think also the interactions are short in the grand scheme of things before you sign on with somebody and so getting a good feel for if they're gonna be a good fit and their compensation is commensurate to the value that they provide, that's, it's hard to do in a remote first environment and so you have to like start every new interview and service provider search with kind of that wall kind of built in.

[00:38:32] Sarah Luehrs: Right. 

[00:38:33] Umar: Yeah, I agree. Now, Sarah, you've got such an eclectic background and you're proof of the idea that our life's work is not necessarily what we've studied at university.

[00:38:43] Umar: In this ever evolving tech landscape that we are living in, changing careers or reinventing oneself might soon be the norm rather than the exception.

[00:38:53] Umar: I wanna ask you, for someone looking to transition into web3, what advice would you give them on taking that leap?

[00:39:01] Sarah Luehrs: Yeah, I think my advice stems from that idea where you do one or you learn one, do one and teach one. So you kind of learn about it and then you try it out and then like the real test comes and being able to explain it to somebody else.

[00:39:17] Sarah Luehrs: And working at blockchain, you're always explaining yourself. My father was here last weekend and when he laughed, I think he thought he knew about more about like what my company does than I do, but, which is great.

[00:39:30] Sarah Luehrs: But I think the best thing to do is it is a huge learning curve and there you could read until your eyes fall out about blockchain. But until you start getting online and interacting with projects and wallets and like you said the blockchain explorers and like all those types of things, like looking through a blockchain explorer and trying to see like, can I trace this?

[00:39:53] Sarah Luehrs: You know what I mean? Like what does it look like on different blockchain explorers on different networks?

[00:40:00] Sarah Luehrs: So really getting in there and like doing stuff. I think that probably a more fun way to do that is to find a project that might spark interest for you and follow along with them.

[00:40:12] Sarah Luehrs: Interact with their testnet or wherever they are in their project lifecycle. Maybe you're doing stuff on Mainnet, maybe you're participating in governance, maybe you're doing staking, maybe you're looping your staking, like all these types of things, like there's a never ending landscape for opportunity to like play and to like do stuff and so doing, and then tell your friend about it and see if you can get them on board too.

[00:40:37] Sarah Luehrs: I think that that's really like the first or like the biggest achievement is if you can say, yeah, I did all this stuff on blockchain. I voted on this like governance proposal and it was accepted and like all of these types of things, and then you tell your friend about it and you're able to articulate like what you did and why it matters.

[00:40:56] Sarah Luehrs: Then you're in, and then I think that almost any blockchain company would be lucky to have you.

[00:41:02] Umar: I mentioned in the, when we first started, that you're an alumni of the Crypto Accounting Academy. But other than this, what other resources or communities have been helpful for you for the past years?

[00:41:16] Sarah Luehrs: Yeah. There's been a lots of books. I've read a lot of books, and podcasts, I mean there's a podcast just like this one. I listen to this podcast all the time to learn about things that I don't understand or don't know.

[00:41:29] Sarah Luehrs: I have weekly podcasts that I always tune into and then a really helpful thing is if we're thinking about integrating with a new partner or there's like a new protocol out there that's getting a lot of buzz.

[00:41:41] Sarah Luehrs: Like you can always find a podcast with that like founder explaining to you, to anybody who wants everything about it with usually pretty good questions and stuff like that. So, there's just so many podcasts that you can use at any time to like basically learn anything that you are interested in at any moment.

[00:42:01] Sarah Luehrs: So I do listen to a lot of podcasts. 

[00:42:04] Umar: Any names come to mind or books that you've read that have been helpful? Not necessarily crypto related but anything that's been helpful for you in your job? 

[00:42:13] Sarah Luehrs: Yeah, definitely. This podcast Accountant Quits, is super helpful. I listen to every week on The Brink.

[00:42:20] Sarah Luehrs: They kind of cover the US perspective, like legal landscape a lot of times. I listen to Unchained every week. I think Laura Shin does a really good job doing interviews. She has excellent questions, so I always learn a lot from her podcast and then other podcasts that are like pretty technical. When I was first, especially like getting into Union, for example, like learning about Zero Knowledge, the ZK podcast, 0xResearch,, those types of things. So it just depends on what I feel like I need to learn more about. But week to week, definitely like keeping a pulse on like the legal landscape and the market of where crypto and blockchain is, is really good between those two, On the Brink and Unchained. so.

[00:43:11] Sarah Luehrs: Yeah.

[00:43:12] Umar: Perfect. Those are good names. 

[00:43:14] Sarah Luehrs: Mm. 

[00:43:15] Umar: And it's probably a good way to also wrap up the podcast.

[00:43:20] Umar: As closing thoughts, the title of the episode today, Sarah was navigating web3 operations. Has there been anything that we didn't share that you'd like to now share with the listeners or what would be your closing thoughts for today?

[00:43:34] Sarah Luehrs: Yeah, I think closing thoughts are, is that, a lot of this is new. And so a lot of times, you know, just setting up a chart of accounts in QuickBooks, for example, like most people haven't done that to account for crypto, right? So it can feel really overwhelming and intimidating at first. But it's an emerging and evolving space. And so it, it's okay to ask questions and to find people and experts who have done it before, who are or who are doing it, right. So, you know, having an attitude of, I can learn this is without it, like, it would be really, really hard to operate in this space. 

[00:44:22] Umar: Since you are a regular listener of this podcast, you know that I have a last question that I ask my guest is, do you have a favorite quote or maxim that you live by or that you every now and then repeat to yourself?

[00:44:36] Sarah Luehrs: Yeah, I think for me it's consistency. Consistency will always win out over fleeting intensity. The classic tortoise and hare tale, the tortoise ends up winning because he slowly and steadily does the same thing continuously over a long period of time. But the hare sprints for a little bit and gets super distracted.

[00:44:58] Sarah Luehrs: Just reminding myself like sometimes I really don't wanna close the books. But we do things that we don't always wanna do, but we do 'em consistency and over time, consistently. 'cause over time they add up and they really do make a meaningful impact over time. 

[00:45:15] Umar: Like rowing for 5K. Right. I've been watching your tweets. 

[00:45:19] Sarah Luehrs: Yeah. So actually I'll say this and now I'll be stuck to it. I'm trying to row on my Erg a million meters this year and I have.

[00:45:31] Umar: What, a million?

[00:45:32] Sarah Luehrs: A million meters.

[00:45:33] Sarah Luehrs: Yeah.

[00:45:35] Umar: That's possible? In one year?

[00:45:36] Sarah Luehrs: It's possible. Yeah. I did, I calculated it yesterday or the other day.

[00:45:40] Sarah Luehrs: I have, just 350k left to do.

[00:45:44] Umar: What?

[00:45:45] Sarah Luehrs: So I've already rode, I know.

[00:45:48] Umar: Really you've rode 650,000 

[00:45:52] Sarah Luehrs: Yeah. Since January. 

[00:45:54] Umar: Meters. 

[00:45:54] Sarah Luehrs: Mm-hmm. 

[00:45:56] Umar: Meter, so, okay. 

[00:45:58] Sarah Luehrs: Yeah. Not miles. 

[00:46:02] Umar: I was thinking kilometers when you said that. I was thinking a million kilometers.

[00:46:06] Sarah Luehrs: On the Ergometer. They do. Yeah. It's all a million. Yeah, a million meters. So 5K is 5,000. 

[00:46:13] Umar: Yeah. 

[00:46:14] Sarah Luehrs: Yeah, yeah. 

[00:46:15] Umar: It's doable. It's a lot. But I mean, congrats to you.

[00:46:18] Umar: I mean, you have to be consistent. If you want to hit

[00:46:20] Sarah Luehrs: Yeah. You're not gonna get it done in a couple days. 

[00:46:23] Umar: Yeah. You know what? I'm gonna share something. You didn't find this funny when I saw that tweet that day, I was going to the gym, and when I went to the gym, I'm like. I wanna row 5K and see how it feels like and so I rowed 5K because of your tweet. You inspired me. 

[00:46:38] Sarah Luehrs: Oh, how long did it take you? 

[00:46:39] Umar: Maybe 25 minutes.

[00:46:40] Sarah Luehrs: Nice.

[00:46:40] Umar: I'm not sure.

[00:46:41] Sarah Luehrs: Nice.

[00:46:43] Umar: How long did it take?

[00:46:44] Sarah Luehrs: Mission accomplished? 

[00:46:46] Sarah Luehrs: Yeah, I think that day I did, my goal was 21. So I did in 21. Which is good for me. Oh, well good. I'm glad you rode.

[00:46:57] Umar: Yeah. But I haven't done it since, so I'll have to be consistent to it. 

[00:47:00] Sarah Luehrs: Yeah, consistency over intensity. Yeah, just the idea of like, something is better than nothing. Like if you don't feel like doing it, just do a little bit. 

[00:47:11] Umar: Yeah. Sarah, thanks a lot for your time today. If people want to reach out to you, they want to connect on socials, where should they go?

[00:47:19] Sarah Luehrs: I think, the best place is probably Twitter (@sarahkc07) . Yeah, I'm also in the Union Discord, so you can add me there and we'd love to have you in our Discord and other than that you can find me lurking in the gym. 

[00:47:37] Umar: Perfect. Well, thanks a lot for your time today, Sarah, and we'll be in touch.

[00:47:42] Sarah Luehrs: Thanks.