So my name is Lowell Ness, I'm a
corporate securities partner at Perkins
Coie in the Palo Alto office- been in
Silicon Valley for most of my career and
spent a lot of time with startup
companies and venture capitalists. I
think digital securities in my mind
comes down to a far more efficient way
of record-keeping for securities in
general and I do see a progression
here from private markets to public
markets and I think it probably is a
perfect opportunity right now for
private companies especially in Silicon
Valley that you know we're open to kind
of new cap table type solutions -
we've seen eShares and other solutions
like that--now they're called Carta--coming out
of the woodwork because there's some
openness to that. That fact is
actually an important fact because cap
table migration is impossible and nobody
wants to do it. When you marry the fact
that we're open in Silicon Valley to
sort of cap table migration to the
concept of blockchain as a
technology to underpin the
record-keeping, I think there's an actual
real opportunity right at this moment to
do an amazing kind of new blockchain
based ledger system that will
track private company stock and we've
seen a lot of the public companies like
NASDAQ and others getting interested in
this for the very reason that they seed
it as a step towards the public
company sphere, so I think digital
securities are coming and it's the wave
of the future. So I did get a chance to
start out working on digital securities
at kind of the very beginning of,
you know, the early t0 project with
Overstock and architecting some of the
the very first kind of concepts around
how to do it and it was you know an
incredibly novel thing at the time.
That's, you know, something that
we had to deal with the SEC on and
frankly it was amazing to see how tuned
in the SEC was even three or four years
ago when that took place. I think we've
made a tremendous amount of progress
since then and we're starting to see now
more of these alternative trading
systems and ATSs starting to get
approved and so I think we're you
know timing-wise right on the cusp of
seeing a lot more digital securities
coming to market and having places to
trade. So Perkins Coie is a tech firm
first and foremost and I would say we're
a very entrepreneurial group and so you
know speaking for myself I've coded
a you know major form system on several
occasions now that does document
automation for all of the venture
capital forms that we use in my practice.
All of us have stories like that and so
it's an incredibly entrepreneurial firm,
we're sort of a mix of lawyers and you
know geeks that go out and code things.
So yes we are, Perkins is very
entrepreneurial and I think that's going
to be important when it comes to dealing
with digital securities in the
transition from you know the paper
securities to the digital world. I do
think there's going to be a number of
interesting technology choices that
speed things up and make things better
that will make things also different
from the way that we handled them
previously that needs to be back stopped
with an actual contract and so our forms
are going to change a bit in some
unexpected ways but so it's going to be
important for all of us to be on top of
some of the the nuances in the new forms
for raising capital for private
companies on a digital securities
platform. So I think we're
here at this really important
roundtable event talking about some very
interesting ways in which we could
develop this new protocol for digital
securities and I've been really
impressed with the people who are here. I
was telling somebody earlier that this
is, I think my third time going through
this process of trying to define the
parameters and requirements for a
digital securities platform and it's by
far kind of the best way to do it that
I've experienced so far. We have a lot of
experts from transfer agents to broker
dealer types to people involved in
commodities trading to former regulators
and everything else and so I do think
we're gonna get Best of Breed kind of
input into the protocol which is
incredibly important for something
that's going to be transformational like
a digital securities platform. So
standardization is going to be an
important driver for digital securities
for the same reason it is an important
driver in any software based project
it's going to, you know, require a lot of
people to speak the same language in
order to--and the code--to speak the same
language in order to develop the right
applications on top of a protocol that
is common for everyone to use.
