Accelerator for blockchain technology ventures to open next year
A new company that provides seed capital and mentorship programs to tech ventures could potentially bring dozens of cutting-edge startup companies to Cayman.
Latitude aims to begin its program in Cayman Enterprise City in January, subject to the necessary approvals.
The firm will bring groups of tech companies to the special economic zone for mentoring and development to help the startups attract their first round of venture capital funding. All of the tech ventures will register as special economic zone companies, and team members will obtain zone employment certificates.
Latitude’s accelerator program reverse-engineers the due diligence process that venture capital firms follow when making an investment decision, and brings together promising, innovative software developers who may not yet have business experience, with technology and management experts.
“Our purpose as an accelerator is to structure ourselves so that we provide all of the services that a company needs exactly in that phase of their development,” said Latitude founder Arthur Corry.
“By the time they graduate from the program, they have everything in place to scale up rapidly.”
Accelerator programs typically help ventures define and build their initial products by providing a small amount of seed capital, mentoring and a workplace environment. The three-month programs end with a demo day where ventures have the opportunity to pitch their ideas to potential investors.
In Latitude’s case, cohort companies will already need to have a finished prototype to enter the program.
Mr. Corry, who founded the first accelerator in Toronto, said Cayman’s special economic zone offers the ideal, lightly regulated environment where companies can set up quickly, innovate and then launch their software globally.
Financial technology companies in particular have to adapt to various legal and regulatory environments when they start to market their product worldwide. In other locations “it is difficult for a company to adjust to a specific regulatory environment and then make a global launch with those restrictions,” he explained.
The ability to develop intellectual property under Cayman’s tax favorable regime from the outset and to bring in developers from around the world quickly are other factors that make Cayman attractive.
“For example, to get an Indian developer into Canada or the U.S. can take months. This industry is moving quickly. In Cayman the rules are very clear and we like that,” said Latitude’s Mary Davies.
“The other thing we have in Cayman is the best and the brightest in structuring transactions.” Matching very innovative tech ideas with the best lawyers and accountants will result in “amazing product,” she added.
Latitude will focus solely on blockchain technology ventures. The technology that powers bitcoin is more than a means of digital exchange. The decentralized ledger of transactions that is distributed to each user of a peer network – in contrast to information being stored on a single, centralized server – has much wider applications and is touted to disrupt and replace the way many financial and business transactions are carried out today.
For instance, smart contracts, such as loans that automatically adjust interest rates based on the financial performance of the borrower, would create greater efficiency and more transparency, and reduce the potential for commercial disputes.
Used as a transaction processing tool blockchain technology is also seen as the likely backbone for the next generation of Internet applications that are going to connect devices on a distributed network.
In connection with its planned launch, Latitude will host the first International Blockchain Summit on Jan. 21, 2015, in Cayman. The event will gather the top minds and industry leaders in the blockchain space via the Internet and in person to give traditional industry executives from the banking, finance, law and governance sectors a better idea of the technology itself and what impact it could have for their respective businesses and industries.
In addition to the accelerator program, Latitude plans to establish a lab with a person in residence who will develop projects independently and support cohort companies.
The company will also institute an academy or after-school program that will work alongside cohort companies to give students exposure to digital literacy and a career path that will be in high demand in the future, Ms. Davies said. “We will bring in high school students, teach them how to code and show them what that skill can do.”
Following its launch and the International Blockchain Summit, the company plans to start its accelerator program with the first cohort of companies early in 2015.