Episode 16

Gil Hildebrand from Gilded on Crypto Payments, Invoicing & NFT Analytics

Gil Hildebrand from Gilded on Crypto Payments, Invoicing & NFT Analytics

What We Discuss WIth Gil Hildebrand

Cryptocurrencies offer the possibility to exchange value instantly without the need for intermediaries like banks allowing you to save all banking transaction fees in the process.

You have greater autonomy and do not even need a bank anymore – your funds are moved in and out of your crypto wallet in a matter of seconds to anyone in the world.

However to drive adoption of crypto-commerce, you need tools that enable you to connect and facilitate crypto to your accounting.

Enter Gilded – a platform that allows you to invoice in crypto, make payments and connect your wallets and sync all your crypto transactions into your accounting software.

In this episode, you will learn;

  • The accounting challenges faced by businesses transacting in crypto;
  • Why more and more companies are now using stablecoins as a form of payment;
  • How Gilded enables you to connect your crypto invoicing and transactions to your existing accounting software;
  • The future potential of NFTs and why Gilded launched the NFTOPS platform;
  • How Web 3.0 will transform the accounting industry;
  • The challenges for adoption and much more.
Connect with
Gil Hildebrand
CEO & Co-FOunder @ Gilded

[00:00:00] Umar: Welcome to the Accountant Quits, brought to you by AuditChain, the world’s first decentralized, continuous audit, and real-time reporting protocol. On this podcast, we discuss how blockchain will impact the accounting profession and how accountants should prepare themselves for the future of work.

[00:00:17] Umar: My name’s Umar, your host, and even if some might refer to me as the accountant gone rogue, my job is to provide you with the blockchain knowledge you need that will be relevant for the accounting industry as a whole.

[00:00:31] Umar: Welcome to episode 16, and before we start, I have a word of apology to our listeners. I did have some wifi issues when recording this episode with Gil, and there are a few glitches here and there.

[00:00:43] Umar: Today, we dive deep into the ever-growing digital currency. Cryptocurrencies offer the possibility to exchange value instantly without the need for intermediaries like banks, allowing you to save all the banking, transaction fees in the process. You have greater autonomy and do not even need a bank anymore. Your funds are moved in and out of your crypto wallet in a matter of seconds, to anyone in the world. However, to drive adoption of crypto commerce, you need tools that enable you to connect and facilitate crypto to your accounting.

[00:01:16] Umar: Enter Gilded, a platform that allows you to invoice in crypto, make payments and connect your wallets and sync all your crypto transactions into your accounting software. To learn more about Gilda today, I have the pleasure to speak to its founder and CEO, Gil Hildebrand. Gil is an entrepreneur at heart with a CV of many successful startups and was the co-founder of Squidoo alongside the well-known and sought after author Seth Godin.

[00:01:44] Umar: In this episode, you will learn the accounting challenges faced by businesses transacting in crypto, why more and more companies are now using stable coins as a form of payment, how Gilded enables you to connect your crypto invoicing and transactions to your existing accounting software, how web 3.0 will transform the accounting industry and much more.

[00:02:07] Umar: Gil, welcome to the show. I’m so happy you accepted the invitation to be here.

[00:02:12] Gil: Thank you so much. I’m looking forward to it.

[00:02:16] Umar: To start, could you share with the listeners, how you got into blockchain? Your story started a long time ago and how you became interested with blockchain and the story leading up to Gilded.

[00:02:30] Gil: So I was a software developer for 20 years and I spent half of that time working on Squidoo, which was a social publishing platform, where we paid back half of the money that we made to the people that created content on our platform. And that sounds like a very, you know, crypto thing to do it. It would be a great start-up then in 2021. But we started that company in 2005 and because I built all the payment tools that we use to pay over $50 million to our users all over the world, I saw firsthand how difficult that was.

[00:03:06] Gil: And I knew that the traditional financial infrastructure is broken. It doesn’t work with a global economy. So it was many years later after that company was acquired that I discovered crypto. And I went back to that problem that I had previously, and I realized this is a 100x improvement over the traditional financial infrastructure.

[00:03:28] Gil: And I knew that I had to get involved with it because I saw it as the solution to so many problems. But it also creates new problems and that’s actually the thing that I wanted to solve with Gilded, which is that if you’re a business trying to adopt this revolutionary new, financial infrastructure, and there’s still a negative ROI, because it doesn’t integrate with any of the tools or processes that businesses use to operate, it’s difficult to accept payments from your customers to pay your team in cryptocurrency.

[00:04:01] Gil: And most of all, most importantly, to produce financial reporting. And if we’re going to see millions of businesses adopt this new technology, which I fully believe we will, you know, even in the near future, then how do we get from here to there and how do we onboard regular people, regular businesses.

[00:04:21] Gil: And it’s got to come with, you know, just, an integration into the everyday tools that people use. And so that’s how I got involved in crypto and why I started Gilded.

[00:04:34] Umar: Could you paint us a picture of the challenges for companies who’ve invested in crypto to do their accounting?

[00:04:41] Gil: Well, what we’re seeing in many cases is that, a business will make the choice to get involved with cryptocurrency or NFTs or anything in the blockchain industry, and they will bring over their traditional finance team. And these could be really sharp people, CFOs, Controllers, Finance Managers, CPAs, and, immediately they’re just, you know, shocked that there’s a lack of tools that they, they can’t use the systems that they’re used to in order to be able to account for things to create financial statements.

[00:05:18] Gil: And the types of challenges that they have are looking at many different sources of transactions, crypto exchanges, different blockchains, even within those blockchains, looking at different explorers and having to merge so many different spreadsheets, then calculate the exchange rates to your local currency of each transaction that you have.

[00:05:43] Gil: Understanding what smart contracts are doing, and how that should affect your P&L statement and Balance Sheet, as well as tax reporting, calculating cost basis and gain loss for transactions. There are so many different challenges and the further you dive into this industry or put another way, the more success you have by moving into this new economy, the worst it gets.

[00:06:10] Gil: And, you know when you’re just dealing with a few transactions, you can, you can do things by hand and maybe, maybe that works, but at a certain point you realize there’s just no way. Even if you hire more people that you can take care of everything. And so that’s, that’s when people realize, you know, Hey, I need some, some sort of scalable solution.

[00:06:34] Umar: You’ve mentioned the challenges. Could you speak about, introduce us Gilded and how you’ve provided a solution to those challenges?

[00:06:44] Gil: Sure. So what we like to say is we enable you to run your business on blockchain. And the way that we do that is basically by creating an ERP system that is compatible with this new crypto and Web3 economy.

[00:07:00] Gil: And so we connect to different blockchains. We connect to exchanges, we’re able to aggregate all of that transaction data into one place. You may be familiar with it being able to connect all of your bank accounts into your, you know, QuickBooks account, for example. QuickBooks doesn’t support crypto. And even if they did it, they would probably only support a very small fraction.

[00:07:26] Gil: All of the, you know, things that people are, are innovating and doing at the very edges of this new technology. And so Gilda is able to aggregate all of that transaction data in one place, transform it into an accounting grade format and then enrich that data. And of course, you know, be able to sync it to your accounting system, with the ultimate goal of creating a consolidated set of financials.

[00:07:54] Gil: Now, in addition to the bookkeeping and accounting functionality of Gilded, we go one level above that. Because when you think about, the back office operations of a business, there are different aspects like accounts receivables, which is accepting payment from customers like accounts payables, which is paying your team and your vendors.

[00:08:16] Gil: Gilded is one of the only solutions out there that is thinking through the entire back office workflow of what a business might need in order to be able to, you know, as I said, run your business on blockchain. So we have invoicing tools. We have bill pay tools. We have mass pay, which is a way to pay, you know, your entire team all at once in a single transaction. And we’re building additional modules over time. So we’re now building an NFT reporting suite. And as time goes on, I expect there’ll be more as different business functions come online and, and, you know, have a demand for, handling crypto data.

[00:08:57] Umar: One of the questions I had was so for these businesses who want to invoice in crypto, a lot of the vendors are there for the moment not really accepting payments in crypto. How does that conversion for, for companies receiving crypto and then having to convert it in Fiat works in practice?

[00:09:19] Gil: So what we see and by the way, Gilded as a B2B solution, so we don’t deal at all with like consumers or retail type of transactions. You wouldn’t use Gilded, to, you know, payments at your coffee shop or shoe store. Where we deal with B2B, where people are sending invoices of, $10,000, a $100,000.

[00:09:43] Gil: And what we see is that businesses that have a global customer or vendor base are more open to using cryptocurrency for transactions because they’ve all had issues, wire transfers and other types of traditional, money transfer methods and cryptocurrency is much more predictable. It’s faster. You can send a payment on a Sunday or on a bank holiday and it still goes through. Now, the challenge of course, for a business is that most businesses aren’t, speculating on assets. Like if, if I’m a business in the U.S, I would never buy and hold Euros or British pounds, as part of my business strategy.

[00:10:31] Gil: So why would I hold Bitcoin or Ethereum or something like that. And, and that’s why stable coins really make sense for businesses because these tokens, you get all the same benefits of cryptocurrencies like Bitcoin, but without the risk of volatility, and we’re seeing more and more adoption staple coins for global commerce.

[00:10:54] Gil: Gilded is based in the U.S but we have customers all over the world. What we see is that businesses outside of the U.S are much more willing to accept cryptocurrency, because they’ll, you know, they’re happy receiving dollars, but if it’s a tokenized dollar even better, because you know, they can get it faster and more cheaply.

[00:11:15] Gil: Whereas businesses in the U.S are, a little bit more open to paying in cryptocurrency. And the question is, you know, how do they acquire it? And, I think. to the extent that we’ll see significant adoption of stable points, it needs to become easier for businesses to move money in and out of the system.

[00:11:36] Gilded doesn’t solve for that part of the puzzle today. I think it’s something that we could solve for in the future. In the meantime, what it means is if you’re using cryptocurrency as a business, you need to have an account on some sort of exchange like Coinbase or Kraken. And, in order to, you know, transfer funds from your bank account.

[00:11:56] Umar: All right, this is the perfect segue to my next, next question, because I want to ask you, what are the prerequisites for a company to come and use Gilded.

[00:12:04] Umar: One of them they’ve already have accounts with centralized exchanges and already trading in crypto. Could you mention a few of the other prerequisites and maybe your process to onboard a new client, how it works?

[00:12:19] Gil: So. We only deal with businesses who have already made that mental leap that, hey, they’re getting involved in crypto in some way.

[00:12:27] Gil: And so they, yes, they will need an account at a centralized exchange. If they’re moving funds back and forth between their bank account and their crypto wallet, they may choose to have a non-custodial while like a hardware wallet or a multisig, in order to interact with Defi and Web3, which you can’t do from a centralized exchange like Coinbase, but regardless of that, they will need a wallet.

[00:12:53] Gil: They will need their own cryptocurrency because essentially we’re the reporting layer on top of all those. That is really the only prerequisite. Other than that, it’s very easy for a business to just sign up for a free Gilded account. You can connect one wallet to it, you can start to test things out.

[00:13:13] Gil: We have a kind of self-service upgrade plan from there where, you can put in a credit card and upgrade your access. And then we also have kind of a, you know, Enterprise tier where, if we have a larger business where they need some training and education, or onboarding, or maybe they just need more functionality, more wallets, better reporting tools, we meet with them one-on-one to determine what exactly their needs are, help them through the onboarding process and give them priority support.

[00:13:45] Umar: So if it’s on a decentralized exchange, like a Uniswap, the way to be able to retrieve those transactions would be extracting them from Etherscan or something?

[00:13:58] Yeah, so what we do is essentially go to the blockchain and grab all of the transactions for the wallets that you link. And, you know, people tend to assume that accounting should be fairly easy for cryptocurrency because there is a public ledger of all the transactions. You can go to a block explorer, look at someone’s wallet and you can see everything that’s happen.

[00:14:20] Gil: But it’s not an accounting grade format. And what I mean by that as accountants think of debits and credits and accounts and vendors and customers. And if you’ve ever looked at a block Explorer, it looks nothing like that. It’s very technical. Everything is pseudonymous. You’ve got all these, wallet addresses.

[00:14:39] Gil: It’s not clear who they are. And so what Gilded does is helps you provide or helps you see some context around those transactions and see it in a format that is a little bit more friendly to, people who don’t live and breathe crypto every day.

[00:14:56] Umar: Like you mentioned a lot of the existing accounting software out there for the moment they don’t support cryptocurrencies, they don’t integrate with exchanges or offer the possibility to calculate the spot prices of those cryptos.

[00:15:10] Umar: Now Gilded is not an accounting software per se, but rather a tool to facilitate the transition from these exchanges to the accounting softwares. And I’ve noted that Gilded has partnered with Xero and QuickBooks. Could you explain a little bit more about this partnership and how the users of these softwares can benefit?

[00:15:35] Yes. So, you know, in accounting terms or CPA terms, we would say that Gilded is not a general ledger. We don’t organize things strictly into debits and credits in our system. What we do is get the crypto data into an accounting grade format and then sync it to your general ledger. And so that could be an accounting system like QuickBooks or Xero.

[00:15:58] Gil: We have a very deep integration with QuickBooks in particular, which we call Compass. And that enables you to create a very fine grain rules about how things map into your chart of accounts. So you may say, I know that this particular wallet address is one of my vendors named John Smith. And then you can say every time I have a transaction with John Smith, put it in these subcontractors account in QuickBooks, and you can start to create a very fine grain rules around how things go into your accounting system. We don’t support that with Xero yet, but that is something that we’ll be adding sometime in the next year.

[00:16:37] Umar: And what if a company is not using those softwares like Xero and QuickBooks, how would they benefit from Gilded?

[00:16:44] Gil: Yeah, that’s a great question. So one of the most core things we do is, grab all this data from disparate sources, get it in one place and transform it into that accounting grade format.

[00:16:56] Gil: From there, you can export it to a CSV. And so many accountants are just happy if they can get a nice CSV file with all their information in one place. So we do that and, typically, only the smallest business, those will really want to use that approach.

[00:17:14] Gil: The other type of organization that we see that doesn’t necessarily use an accounting system is a DAO, which is a decentralized organization, sort of like a COOP of people working together, not necessarily a business. And so as a result, you know, they don’t want to use traditional business software, whether or not they should is actually debatable and could depend on how they run their operations. But in those cases with DAOS, we have quite a few as customers and, and they don’t always use an accounting system. If they can get the data in a CSV format, they can manipulate it from there.

[00:17:55] Umar: I want to speak a little bit more about the services offered by Gilded for companies crypto tax reporting. At the moment, cryptocurrency is taxed as property, and therefore subject to capital gains tax in most jurisdictions. Now, how does Gilded help to ease the process of compiling all the information required for their tax reporting?

[00:18:20] Gil: Yeah, so the primary thing you need to know for tax reporting is what is your cost basis for a transaction? So typically only outgoing transactions are taxed. So if you, if you somehow receive crypto, you know, that may be income and you may have income taxes, but there are no, you know, capital gains or loss taxes on that.

[00:18:46] Gil: But the moment that you sell that cryptocurrency or convert it to dollars or another currency and send it to your bank, you’re going to incur not only the income taxes, but also capital gain taxes as well. And exactly how that’s done may vary from country to country. I can speak primarily about the U.S where you have short-term and long-term capital gains, depending on how, how long you’ve held that asset.

[00:19:13] Gil: So what Gilded is actually doing now is creating a tax reporting suite where we’ll calculate your cost basis on each transaction on your outgoing transactions. We’ll, calculate whether there was a gain or loss on that transaction. And then give you a report that’s something you can easily share with your accountant so that you can report your taxable gain or loss on your annual tax raturns.

[00:19:40] Umar: And speaking about challenges for adoption at the moment, what are some of the big challenges that you see for Gilded ? It can be anything around regulation, communication with the clients. And what I also want to ask you is how has institutional adoption of crypto as a means of payment and invoicing changed from when you started back in 2018?

[00:20:06] Gil: The biggest change that I’ve seen in terms of adoption is, is really through NFTs because, whether a business can realize a benefit to accepting or making crypto payments depends on a lot of different factors. And often when you can, when you compare that to traditional payment methods, there may be a benefit, but it may not be enough of a benefit for a business to say, I’m going to stop everything I’m doing and dive into this technology that is still at the cutting edge and kind of difficult to deal with.

[00:20:40] Gil: But with NFTs it’s a lot more exciting because everyone sees it as an opportunity. And because it’s based on culture, and society and not so much about, you know, pure dollars and cents. There’s a lot more willingness to adopt it. And really that’s where we’re seeing big media companies diving into this space.

[00:21:02] Gil: And when I say media companies, it could be everything from, you know, digital media, like publications to, to record labels, to movie studios, to art studios. they’re all diving into NFTs. And that sort of also assumes that, Hey, by the way, you are diving into crypto also, because if you’re selling your NFTs, you probably receive crypto as payment.

[00:21:26] Gil: Now you need to figure out a strategy for dealing with that. And so that’s really been the biggest change that we’ve seen over time. And I think that will continue to drive adoption over time as more and more people are receiving. Crypto for payment. maybe because they’re selling on NFTS, they’ll have some on their books, maybe they want to start offering a payment to their employees or their offshore team members and that sort of thing. I think it will be increasingly common.

[00:21:58] Umar: So I did say quite recently that Gilda launched the NFTOPS. So it’s a specifically to NFT marketplaces if I’m not mistaken. Reporting services for NFT marketplaces. Is that correct?

[00:22:14] Gil: Yeah that’s right. So if you look at, if you look at what the internet did for information, we took every piece of paper, every document, and turned it into a PDF.

[00:22:28] Gil: And you know, if you told someone 20 years ago that you wouldn’t really ever sign pieces of paper again, you would, and you wouldn’t have file cabinets. You would just put everything into this file on your computer, you would say, that’s crazy. You may say the same thing. Now, if someone says, well, every representation of ownership and value will be tokenized as an a NFT or as a cryptocurrency, you may say that’s crazy, but in 20 years from now, we believe that that will be the case.

[00:22:59] Gil: And in particular with NFTs, it’s such a new concept that the tools are extremely lacking and especially for businesses. So we created NFTOPS as the first revenue operations platform for the NFC marketplaces that are on. So there are dozens of these different marketplaces in different verticals, the most popular ones, like, you know, Opensea, Superare, Rarible. Those are more art focused, but we’re seeing more and more of that are launching that we’re focused on all sorts of different types of media, real estate, and many other things. And what NFTOPS does is, it gives that marketplace, that platform visibility into the performance of that platform. So you will have like a Google Analytics style dashboard where you can see how much overall revenue you’ve generated in a specific time.

[00:23:57] Gil: What that mix is on the primary and secondary markets, which of your collections or particular NFTs are trending at the moment, you know, and, and where you’re generating that revenue that you know is kind of a real-time dashboard. And in addition to that, these platforms and marketplaces are making partnerships with big name, media companies, movies, studios, record labels, many of them.

[00:24:24] Gil: And they have a very real requirement to be able to report on all the sales that are made as part of that partnership. And, especially because their revenue sharing agreements in place. So if the marketplace, you know, pays their partner, you know, a $100,000, what is the evidence to back up that that was the right amount to pay?

[00:24:48] Gil: You know, they can calculate these things manually by having their development teams build reporting tools, but in practice, no one has available development resources. And so what Gilded is doing is packaging all of this up into a nice, easy way for finance teams at NFT focused platforms, to be able to get a real-time view of their current business performance, as well as to give their partners and collaborators, the reports that are needed, and you know, show their performance of their collaboration.

[00:25:25] Umar: When we speak about NFTs, about the idea of NFTs, have you seen something about the application of NFTs in accounting so far? How NFTs as a technology can be used in accounting?

[00:25:38] Gil: Yeah, so I think the, the challenge with NFTs is that you’ve got just the basics.

[00:25:47] Gil: Am I selling, am I minting an NFT. Am I selling it? Is it, you know, when do I recognize revenue? You have just those very basic accounting questions, but then what if you’re actually holding NFTs? Or what if you’re collecting them? You know, is that considered an asset on your books or is it considered inventory?

[00:26:11] Gil: The tools for, for keeping track of those things are nowhere near being built. And so people that are doing it today, in most cases, aren’t even keeping track of that. And there is a ton of greenfield opportunity for accountants to get involved in, to help these companies figure this out because, they’re not even thinking that this is something they need, but you know, if you came from a traditional industry and you would say, well, wait a minute, you know, we have a, a hundred widgets sitting in the warehouse.

[00:26:44] Gil: What do you mean? We’re not keeping track of that? Or what do you mean? You know, we have no reporting on it. They would say that that’s crazy, but that’s the reality is today in the industry.

[00:26:55] Umar: I want to speak a little bit about the general overview of how Web2 compares to Web3 and how now with the promise of Web3 is to shift the balance of power back to its users. How do you see this being applied again to the accounting industry? How do you see things being done differently?

[00:27:16] Umar: And would Gilda be considered? How would you define Gilded? Would it be a Web2 or Web3 company or hybrid company between the two?

[00:27:25] Gil: I would say that we’re, you know, just a traditional, subscription-based software company or a SAS company, if you will.

[00:27:33] I think in the future, there could be opportunities for us to make Gilded more of a hybrid solution where, you know, we are dipping more into the Web3 space. But, you know, in terms of our place in this whole role is we’re not your accounting system. We are also not your accountants.

[00:27:53] Gil: Our software is not GAAP compliant. You know, we sometimes get that question or is it IFRS compliant or GAAP compliant? What we do is give you the tools to sync or log things in your accounting system in a way that could be GAAP compliant or IFRS compliant. It’s really up to you to organize things that way, but we give you the tools in order to do that.

[00:28:21] Gil: I think there is a place for Gilded in helping to create some standards or at least some, some sort of guidelines for how accountants should think about crypto assets and, and how they should be accounted for. At the same time, we are not FASB, you know, the accounting board or anything like that.

[00:28:42] Gil: And we’re not in a position to say that these are definitively the things that you should do. But I think to the extent that we can, you know, sort of offer some best practices that actually helps with the adoption by mainstream accountants, where I see, you know, crypto having impact on accounting longer term is that once these tools are built out and once accountants can more easily work with this technology and businesses are starting to integrate it, then everything will move to a much more real-time and automated workflow.

[00:29:22] Gil: And that’s because of what we call a triple entry accounting. And so, you know, we’re all familiar as accountants with a double entry accounting, where you have your debits and your credits, what triple entry accounting is, is essentially a link between the two. So one thing that’s, that’s new about crypto is that if I send you a payment, I see it within my account and you can see it entering your account, but we can also go to block explorer and we can both verify like a link between those two accounts. And in the past, you’ve never been able to do that. Like I received a wire transfer a week ago for a thousand dollars and I had no idea who it was from and whoever sent it to me, you know, they, they may have had no idea that we actually received it.

[00:30:16] Gil: You know, when they look at their bank account, they can see it was sent, but there is no confirmation that it was received. And I can see that it was received, but I don’t know who sent it to me. Now of course I did figure it out, but it took some phone calls. And that’s what I’m saying is that it’s not a real-time process today.

[00:30:34] Gil: The promise of triple entry accounting is that now we can start to have a real-time view of our financial data and we can increase the auditability of that data. Because now we have, you know, a verifiable, source with every transaction and it’s going to take us a long time to get there, but the idea of continuous accounting and continuous audit is something that will take hold.

[00:31:04] Gil: It may take 20 years, but it’s going to have a major impact on the profession. The next question people ask is, you know, is there a place for accountants in that world? Well, of course, because you know, every accountant will tell you they want to be in a position of, being a trusted advisor. No one wants to do the busy work of bookkeeping and auditing and those sorts of things.

[00:31:28] Gil: And the more that you can automate and the more that you can create this layer of trust and real time. The more time that gives you for the actual important things. Like how can I help this business actually generate more revenue? So it’s a massive opportunity, especially for the accountants who are early to this, recognize it and, you know, make it part of their practice.

[00:31:52] Umar: Before we continue. We’ll take a quick commercial break from our sponsor. This episode is brought to you by AuditChain, the world’s first decentralized continuous audit, and real-time reporting protocol. Some of you listening might be aware that I previously used to be an external auditor. Now traditional audit methodology focuses on materiality and not accuracy. We are constrained by time and cannot audit a 100% of the transactions, and therefore we perform sampling.

[00:32:20] Umar: But the emerging technology of blockchain is here to disrupt the profession and solve the pain points of audit. AuditChain decentralizes audit, and uses an independent assurance methodology that automates auditing tasks and continuously audits a 100% of the transactions.

[00:32:38] Umar: With more and more automation, accountants will increasingly find themselves becoming redundant. If you’re a forward thinking CPA or Chartered Accountant and want to participate and be in touch with the latest developments from AuditChain in decentralizing the audit profession you should apply for membership by visiting the DCARPE Alliance Association at dcarpe.org/join.

[00:33:02] Umar: Staying on this topic with increased automation, how do you see the role of the accountant evolving? And as you said, it’s going to be, it’s going to be switching from the traditional bookkeeping role to becoming more like a more advisory role. In terms of the technology, what should, in your opinion, accountants, auditors should be learning today? How should they kickstart this blockchain education?

[00:33:28] Gil: There’s no lack of textbook tools that you can learn about blockchain. So the AICPA puts out content. There are continuing education seminars about blockchain, and there’s nothing wrong with those. However, there’s no, there’s no better thing than to just dive in head first.

[00:33:50] Gil: And you’ve may say, well, you know, I’ve been waiting for a client to come to me. And then, you know, then I’ll figure it out. But the problem is, as you know, as an accountant, that client is probably going to come to you a week before that their taxes are due or when they haven’t, you know, run a P&L statement in six months, and they’re going to want you to fix it right away.

[00:34:10] Gil: And if you have to start from scratch, learning everything about blockchain and crypto, you may not get that client. Instead, one of the great things about this new economy is that it’s open and accessible to anyone. What do you can do is you can sign up for a Coinbase account, you can execute a few simple trades.

[00:34:30] Gil: On Coinbase, there is a whole earn section where you can complete some you know, a few different steps to learn about different cryptocurrencies and even earn some. And you can go download the Metamask wallet in your browser. You can start interacting with some Web3 applications.

[00:34:47] Gil: You can do all of this you know, with even a budget of a few hundred dollars and you can treat it as continuing education. You may even have some fun with it, just like, you know, maybe you’ve, experimented with you know, a stock trading app, like Robinhood, something that’s, you know, that’s very simple to use.

[00:35:06] You can have fun with it and, it is a way for you to kind of dive in a little bit, even if you don’t necessarily have a client today and do it because you will have one soon it’s accessible and easy. You know, there are plenty of ways that you can just get started individually.

[00:35:24] Umar: I completely agree with you for people to start.

[00:35:27] Umar: Maybe it’s not best to start reading white papers, might be a bit overwhelming, but investing is a really the easy way to get into crypto and when you see your portfolio balance increasing, then you’ll become more interested in blockchain as a technology.

[00:35:44] Umar: I also want to touch a little bit about the token you launched the GFI token, which I noted is a tokenized equity, and it’s also available for the public to invest at any time.

[00:35:58] Umar: But the model is quite different from traditional fundraising model. It’s more a community driven model. Could you speak, explain how this model differs from the traditional equity that people would invest in a company and maybe would they have the same voting powers?

[00:36:18] Gil: Great question. So our GFI token, was created with a legal agreement called the Continuous Agreement for Future Equity or CAFE for short.

[00:36:30] Gil: If you know anything about startup or venture investing, you will have heard of a document called the SAFE, which is how many early stage startups accept their first investments. So that’s the SAFE as the simple agreement for future equity. The CAFE builds on top of that. It’s a, it’s a new version, it’s an iteration of it. And it adds some cool things. So the nice thing about the SAFE is if you aren’t able to determine that the value for the company or you’re just so early stage, you just want to be able to accept an investment and know that investor will be taken care of later. It’s a, it’s a simple three or four page document.

[00:37:10] Gil: It’s very easy to assign and accept that investment. The CAFE is all of those things, but then on top you get a nice investment portal where people can log in, they can learn about the investment and then ultimately invest if they would like to. You get the ability for your customers and vendors to, or your partners to also invest because traditionally with SAFE investments, it’s considered as security, atleast in the U.S and I, as a business owner, I can’t go out and talk publicly about, you know, accepting SAFE investments because you know, the, the U.S government regulates that as a security. But with the CAFE we actually use, what’s called a Reg D 506c offering in the U.S. It’s SEC compliant, and, basically it gives us the ability to. You know, to start marketing our offering publicly. It also lowers the barrier for entry. And so that’s been, you know, a great shift for us in being able to enable our stakeholders, our customers, our partners, to share in our success.

[00:38:24] Gil: And that is, you know, something that I think, when you look back at what we call Web2 companies like the Facebook and the Instagram and, and Twitters of the world, we all contributed to those platforms. But as they grew, we were never able to benefit from their success. And then Web3, the people who contribute to platforms and use them can share in the ultimate success of those platforms.

[00:38:54] Gil: And GFI enables us to open up access to where our customers and partners can, can do that too. So to date, we’ve raised over $900,000 through our GFI investment. It’s an interesting approach because every new investment increases the valuation of the company, according to an algorithm. And what we’ve done is we’ve taken aside 10% of the company’s equity and put it into this pool and then individuals can invest in that pool.

[00:39:25] Gil: Each investor gets that new valuation and they receive tokens in return. What do these tokens mean? Well, they’re security tokens that ultimately represent the potential share of the company. And the way it works is the CAFE pool of 10% will convert to equity in the company at the time that it’s sold or goes public.

[00:39:50] Gil: And so the number of tokens that you own as an investor at that time divided by the total number of tokens that are in existence is your share of that 10%. And so that’s the way it works. It uses blockchain under the hood. You really don’t need to know anything about blockchain in order to use this platform.

[00:40:11] Gil: But, there are some great benefits. Like you can actually go to a block explorer and you can see the entire cap table. You never could do that before blockchain, before crypto. And, you know, we’ve gotten investments on a Sunday night, we’ve gotten investments on a bank holiday and it’s a real time, 24/7 sort of thing.

[00:40:34] Gil: It is more regulated than, you know, the crazy ICO days of 2017 and 2018, where crypto got a bad rap. It’s SEC compliant and, you know, people need to complete ID verification and all of these sorts of things, but it’s a great platform. It’s a new concept. We’re one of the first companies to use it and it’s been really successful for Gilded.

[00:40:59] Umar: Wow, it’s super interesting. I’ve actually never heard of this fundraising model. When we speak of a secondary market, is there a secondary market, or if we speak of liquidity for these investors, how does it work? Is there a vesting period? And is this more open to institutional investors? You have a minimum investment or anyone can invest any amount?

[00:41:22] Gil: With traditional startup venture fundraising, you really have no path to liquidity other than the company being acquired or going public. And that can take 7 to 10 years with a startup. With our GFI offering, we do have the ability to open up a secondary market in the future. So we do not have one open yet today, but we have the ability to open one in the future.

[00:41:48] Gil: And at that point, it could, if we did open it up, give our GFI investors the chance at liquidity at a much earlier stage. So that’s kind of a unique approach. Our bar for investment is fairly low. So we, you know, we accept investments as little as $500. If you’re in the United States, because of the SEC requirements, you do need to be accredited, but internationally you do not.

[00:42:16] You just need to verify your ID. We’ll run an AML check, which is kind of a requirement as well, but all of that process happens very quickly in the background. And then you can either invest using the USDC stable coin or with, a normal bank transfer. Of course, you know, we’re happy to accept investments with USDC.

[00:42:41] Umar: Speaking of the upcoming milestones for Gilded, could you share some of those upcoming milestones and maybe some of the new features that you will unveil soon?

[00:42:54] Gil: Well, our biggest focus today is NFTOPS. We believe everything of value will be tokenized and there needs to be some way to track and report all those NFT transactions that are happening.

[00:43:08] Gil: So we’re seeing a ton of traction with that. That’s our biggest focus. In addition to that, you know, just always chipping away at the core features of our platform, like our tax reporting solution, APIs so that developers can build integrations into other tools. They can, you know, grab our accounting grade data, integrate it into other apps, or maybe they can use our API to have invoices, you know, created automatically in different scenarios.

[00:43:40] Gil: Those are the sorts of things that, that we think are really important. And then there’s, there’s just, you know, the constant refinement that you need to do over time. Especially as we bring on more customers who have, you know, more demanding requirements about how the platform operates.

[00:43:58] Umar: And I saw you recently also had an NFT drop, maybe there’ll be a second NFT drop?

[00:44:04] Gil: We did, the thing is you have to eat your own dog food sometimes.

[00:44:09] Gil: And so what we did was. You know, we, we had this new NFTOPS product and we wanted to kind of get some experience with launching NFTs so that we could track them using our own solution. And we basically open it up to the community. We did a drop and we sent, I think a few hundred NFTS. Our marketing director created the NFTs herself. I think she had probably had a great time doing that. And I think we’ll do more of that in the future.

[00:44:39] Umar: Have you recently learned anything about some blockchain use cases, might not necessarily be in accounting and auditing that you found fascinating and could you share why?

[00:44:50] Gil: Wow. I mean, there are so many things happening in this space that are just, absolutely incredible.

[00:44:58] Gil: The things that people are doing, with generative art in NFTs is very interesting. I saw one DAO, a decentralized organization where they actually had the ability. So the token holders have the ability to vote on how an algorithm would ultimately change its inputs in order to create NFT art that changed over time.

[00:45:28] Gil: So they could actually affect the attributes of the generative art. And as a result, it was a community led art program. I can’t recall the name of it. But that to me is absolutely fascinating and not something that was ever ever possible before. So that’s interesting to me. Also interesting with NFTs is the idea of the content of an NFT changing over time or the content of an NFT changing according to other parameters, such as, What if you, if you had one of this NFT collection, if you saw or had one capability, but then what , if you were a super collector and you had 20 of these that you have actually had some other capability with it.

[00:46:18] Gil: So actually linking these smart contracts together. That is super interesting to me as well. There’s just so much innovation in this space. It’s hard to keep up with, you know, especially as someone who’s actively working in the industry every day. You’re so busy that you don’t even have time to keep up with it all.

[00:46:39] Gil: And it’s very, it’s all very exciting, you know, and there are many things that are science projects that are just experiments, but then there are some that when you see it, you realize, oh, wow, this is actually the future. And it’s being created right now.

[00:46:56] Umar: Gil. We’re already coming to the end of the show.

[00:47:00] Umar: I want to ask you a last question. And this question was, I was inspired by your early days work with Seth Godin. So one of his quotes that I like is that ‘People do not want what you make, they want how it makes them feel. As closing thoughts, what message do you have for people listening, who are dealing with crypto payments, accounting. And how do you want to make them feel or how does Gilded want to make their life?

[00:47:32] Gil: Well, working with Seth everyday for years was super inspiring. And he’s one of the, one of the smartest people I’ve ever met, but also a very kind and humble person. I think what I gathered most from Seth is learning ways to communicate more effectively.

[00:47:50] Gil: So instead of being very verbose and esoteric, writing short sentences, making things accessible to people, not necessarily trying to, you know, wear your intellect as a badge, but trying to relate to them. With that, there are so many other concepts, like, you know, how to form communities, how to know when to stick it out and when to quit.

[00:48:15] Gil: So probably one of my favorite books of all time is The Dip which specifically talks about this issue. And, I think it’s very relevant to accountants who are thinking about crypto, because with anything difficult that you try in life, you will start out here and then you will have a dip down over time where, you know, you thought you actually were making good progress.

[00:48:40] Gil: And now you realize that you have no clue what you’re doing, and you’re so far away from success. And at that point, if you’re not committed to it, you should quit. But if you are committed to it and you want to be the best in the world at it, you stick it out and you will eventually get through that dip to the other side.

[00:48:59] Gil: And so it can be that way with learning something new and technical, like cryptocurrency, where, you know, if you’re an accountant diving in, you may look at it, you know, try a few things and say, hey, this is actually way too complicated. I don’t know why I’m doing this, but if you stick it out, you actually could find that it could be a new chapter for your career.

[00:49:22] Umar: Wow, I love it. And as a freelancer and someone who has been, who started this entrepreneurial journey now for a little bit more than a year, I can relate to that a lot. A lot of times you start something, but after a while you feel like quitting, but then you just have to keep going.

[00:49:42] Umar: One of the last questions that I like to ask to my guests is, do you have a quote or a maxim that you live by?

[00:49:49] Gil: A quote or maximum that I live by. I would, I would say, you know, really that you have to think in life about, and I guess this isn’t a short quote, but you have to think about what you want to say no to in order to have the time and ability to say yes to something else.

[00:50:10] Gil: And so if you want to find success, you know, pick the thing you want to focus on and just dive into that. It can be frustrating knowing that you can’t, you know, experiment with many other things that you might have an interest in, but the more you’re able to focus, the more you should be able to find success.

[00:50:31] Gil: And so that is something I think about a lot. And I think it is good advice for a lot of people.

[00:50:37] Umar: That’s very good advice for me as well. This is very applicable for me right now. I’m trying to look at too many things and it’s very overwhelming crypto. You’re learning new things all the time and everything is so interesting, but you just can focus on a few things right.

[00:50:54] Umar: Before we go, could you please share with the listeners, where can they find you, social media channels?

[00:51:01] Gil: Yeah, Umar. Thanks for having me on the show. You can find me on Twitter at giltotherescue. That’s giltotherescue, and you can also reach me by email gil@gilded.finance. And of course you can visit our website at gilded.finance

[00:51:25] Umar: Alright, Gil. Thanks a lot for coming in today. Thanks a lot for your time. I really appreciated this and, yeah, I’ll be following the work of gilded finance of course. And we’ll speak soon.

[00:51:38] Gil: Thanks again Umar.

[00:51:39] Umar: I would like to thank everyone for listening to this episode, you will find all the links of the episode, show notes and transcripts on the website of The Accountant Quits at theaccountantquits.com. Please note that this content is for general information purposes only, and is not a substitute for consultation with professional advisors. If you do know anyone who could benefit from the episode and you care about them, please do share the episode with them.

[00:52:06] Umar: All the episodes available on Spotify, Apple Podcasts, and Google podcasts, and by leaving us a review and rating, you will support the channel and all your fellow accountants. In order to be notified each time we release a new episode, do follow us on Instagram and LinkedIn.

[00:52:23] Umar: We hope to have you with us next time. Bye. For now.

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