Interview with Frédéric Bertoïa, Managing Director at Equisafe

The Pyratz Team

November 22, 2022

Can you introduce yourself and your professional background?

Hello, my name is Frédéric Bertoïa. Currently, I am a Managing Director at Equisafe. In terms of background, I studied Business law and real estate mergers and acquisitions. Then, I decided to join "Ecole 42" in order to learn how to code well. Shortly after, Bilal El Alamy and I met and we started discussing a new passion of ours: Security tokens. That's where Equisafe was born. Maxime Sarthet joined us a few months later and become a co-founder of Equisafe.

Can you explain to us what Equisafe is in a few sentences?

Equisafe is a platform that allows the digitisation of financial securities on the blockchain. We were in fact registering non-listed transactions on a paper register and our desire was to say to ourselves, we want to give much more flexibility to this register. At the same time, there was the emergence of ICOs, and we finally had a transition phase from ICO to STO.

The American administration had started to reclassify ICOs as security token offerings, and we started with the idea of putting financial securities on blockchain in order to try to comply with the security token offering. Equisafe has rotated a number of times, at the beginning we focused on the registers of shareholders registries, then we realized that people wanted to conduct capital increases, to raise funds via our platform, so we obtained an approval as a payment service provider agent.

This approval allowed us to transfer funds on our platform. From that moment, investors could come on the platform, register, and provide us with all the information required to make sure that the capital increase is validated. We need information such as his last name, first name, date of birth, identity card to be able to do a "KYC" which means "know your customers," this also allows us to verify the origin of the funds. The client has an end-to-end investment funnel, and we will be in charge of implementing the capital increase, which was our second step.

Afterwards, we decided to focus on the investment vehicle market by creating an investment vehicle and managing it from start to finish on behalf of the investors while automating the relations with the bank for investors who invest with a so-called PEA/PME (an account opened with tax reductions). We also manage all the direct debits in the context of dividend distribution and coupon distribution. In this case, we check the identity of the person, the information that he or she has published on the platform, whether it is still up to date, so that we can then go and recover his or her tax rate in order to set up a direct debit on that basis.

So we initially went through the SPV management route and, as time went by, more partners would come to us looking to raise money for investor communities of more than 150 individuals. In order to meet this need, we ended up getting a crowdfunding accreditation that allows us to conduct large crowdfunding operations.

To summarize, we specialize in the creation and management of SPVs (Special purpose vehicules) that can take various forms (private, public, funds).

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How did you get the idea to create Equisafe?

In 2019, Bilal and I started working on security tokens. At that time, there was no one on the market. There was only one provider in Europe and one in the United States, so we thought there was a real opportunity in this field. Very quickly, there was interest from investors in the project, so we built a value proposition with the objective of facilitating investments and their management.
Bilal had worked at Edmond Rothschild, and he had seen that investment funds generally struggled to source projects. The idea was that if we went through a blockchain universe to establish the capitalization tables, "who invests in what", we would provide more transparency in the markets.Today, cap tables are generally paper documents stored in law firms. We had no access to this data and by putting it in digital format, we were going to leverage data that for the moment was inaccessible and yet very precious.

Have you had any difficult moments or challenges to overcome so far?

Of course, we have had several complicated moments. The first was with COVID. We were launching a very large operation that involved the tokenization of real estate properties. This operation was done in several stages. In the first stage, we digitized in Boulogne Billancourt, which was the first digitized real estate in France and in Europe.

Then we had a big operation called the Pavillon du Château de Versailles, which was an annex, an outbuilding, where Marie-Antoinette used to go for a walk at the time. Everything had to take place, everything was framed, and then COVID arrived. Unfortunately, we couldn't do anything, we were supposed to have a big cash inflow which ended up not happening. Fortunately, we were able to bounce back with the help of the PGE [Government Guaranteed Loan].

As time went on, we consolidated our activity. This enabled us to make better use of our resources and to really allocate them on specific projects with a precise profitability. In the past, we did a lot of R&D, thinking we were going in all directions for clients who were a little bit prospective, but today we know how to concentrate on making money.

On the other hand, can you tell us about one of your victories?

Our latest victory was the Visiomed operation which involved the first tokenization of a listed company and the first crowdfunding operation on a listed company. This operation was a big challenge, particularly in terms of the legal aspects, to demonstrate to the AMF, the French financial markets authority, that we were able to carry out this operation on a listed company. Then, we raised 3.5 million euros during the summer. I will admit that this operation has been our most beautiful victory.

Today, where are you?

We propose our own crowdfunding projects, we source our projects and our goal is to build a community of investors that we will be able to solicit as we go along. We also want to create a real relationship with the community that follows Equisafe.

We have done a lot of operations, there are a lot of people on our platform and now we want to create a link with the people who are on our platform. It's a bit like being in a theater, we are the actors of the play, we have been playing for 3 years and we rarely go to see the people who attend our shows.

Today we say to ourselves that it is more than necessary to get in contact with the people and to ask them what are their returns as investors. We tended to focus on SPVs, investment vehicles, and therefore issuers, saying to ourselves that we are doing the work, how it's going, more in B2B and not so much in B2C. We realize that B2C is a really different business because you have to give time, generate trust, participate in mass media marketing, and find a stronger identity than B2B, etc. This is our current challenge. That's our challenge right now.

Today, a lot is expected from companies in terms of CSR / low energy consumption etc., we have seen in particular the change from ETH to POS, how is Equisafe involved in this "environmentally friendly" policy?

‍We, directly, chose a French blockchain, even if they are not really French, but where the majority of contributors are French in terms of developer. This blockchain is Tezos. We specifically chose it for its environmental benefits, and as it natively was a Proof of Stake blockchain, it suited us much better.

What are your short-, medium- and long-term goals, either in terms of number of investors on your platform or volume?

‍So, the goal is to raise the equivalent of 40 million by the end of 2022 and to reach ten thousand users.

In the longer term, we are going to continue our work on structuring the SPV. We are currently working on attracting investment funds to our environment. We also want to facilitate the investor's work in the investment phase. So what I mentioned, the PEA, tax management and also financial reporting to know in real time, his taxable capital gains.

And then, little by little, to bring in more and more SMEs with a certain track record in our environment. Finally, in 5 or 10 year activity, real estate companies that will be able to bring their entire activity into our environment so that we can facilitate the reporting work they conduct on behalf of their investors.

Unlike the other companies incubated by PyratzLabs, you were the first. You were even born almost at the same time as PyratzLabs. What is your role in this ecosystem?

One of our missions is to facilitate all the legal aspects of the companies that are incubated by PyratzLabs. When one of the incubated companies comes to us to launch a BSA AIR and conduct a capital increase, we will be able to launch the operation within 48 to 72 hours. This allows start-ups to save time.

Then, we also offer unofficial legal advice to startups that have some legal questions since 50% of our team is composed of lawyers at Equisafe. This means that we are able to give our opinion on HR issues, accounting issues, etc. This completes the value proposition of PyratzLabs, CFO as a service or lawyer as service.