Dohyung “DH” Kim, Founder and CEO of Finhaven Technology Inc. (“Finhaven”) and Finhaven Private Markets (a wholly-owned subsidiary of Finhaven), based in Vancouver BC, joined Cascadia Report to share some exciting news from the world of blockchain powered private markets, and some fascinating insights from a road less travelled.
Kim is an entrepreneur, and former investment banker, public company executive, lecturer, and government policy advisor. He is the recipient of CEO Monthly's 2020 Global Capital Markets CEO of the Year award, and a member of the British Columbia Securities Commission's Fintech Advisory Forum. As CEO of Finhaven, he is building a financial services and capital markets technology company that will create increased simplicity and efficiency for all market participants.
Starting his career at Merrill Lynch in NYC, Kim founded NMC Resource Corporation where he explored, built, and operated molybdenum mines in Canada and Korea. He holds a master's degree in International Finance and Business from Columbia University and has lectured at both Columbia University and Korea University. He has spoken on the subject at international economic conferences and summits in locations such as New York, London, Seoul, Tel Aviv, and Zurich.
Over his 25-year career, DH has acquired unique insights into inefficiencies in the global capital markets. These insights inspired him to leverage technology to make capital markets more simple and secure.
We spoke with Kim on the back of some exciting news for Finhaven, which marks the end of one journey for him and the team, and the start of another. I started by asking him about what his role as CEO entails, and what he has enjoyed about the process so far.
“Day to day it's really about how we're going to open Finhaven Private Markets. How are we going to give the best experience to the investors and issuers who join the marketplace? And how are we going to make sure that this innovative work really delivers value and opens people’s eyes to the idea of buying, selling and handling securities differently than we have in the past ? Some apps are all talk, but our vision realistic. We can get there. The day-to-day operation is I look at every aspect of the business to make sure that we can properly open this and give great experience to clients.
What I really like about my job is that we have a long-term vision of integrating global capital markets through our core technology, the Finhaven Investment Platform, which leverages blockchain technology and digital securities. Day by day, I see we're getting closer to that vision. And day by day, I see we are accelerating. At the beginning, you're crawling and trying to stand up and I think we're about to run now because we worked with regulators to authorize the marketplace; we have built the first version of Finhaven Investment Platform; and we have our first customer, Finhaven Private Markets, ready to go.”
The company is on the verge of achieving big things, and Kim is quick to acknowledge that while he has been leading them toward that vision, the team behind Finhaven have been working hard to make it a reality.
“We had to put together a team who shared the values of Finhaven - integrity, immediacy, innovation. They are a strong group and getting stronger day by day as we get closer to our first major milestone — the opening Finhaven Private Markets, one of the first of its kind in the world, and that is exciting.
One thing in the business world that we tend to discuss, is always the bottom line. But at the same time how do you get to that bottom line? How do we get to that with multiple stakeholders involved in this company? That's an art form. And at the same time, it’s almost like warfare every day. I feel like the team are my comrades in this war.”
Kim’s passion for his business and the value of working closely with his team in the ‘trenches’ is infectious. Speaking to him, he gets excited about the potential and seems to relish the challenges that have come along the way. I wanted to find out more about his background, and what he attributes that passion and determination in his career to.
“I did various things because I was curious about many things and wanted to try new things. I was fortunate to have some opportunities like being a legislative assistant in my early 20s, leading deals as an investment banker, and teaching at Columbia University and Korea University.
While I was doing those things, I sometimes felt like I wanted to build real stuff. I got into the mining business where I built a mine and also restructured some mines and did the whole operation, eventually taking the company public. Sometimes it can feel great when to deal with breaking the ground, you feel like you're delivering real value to society.
There’s also a time in life you want to take a break. I started thinking, ‘what will be the next trend?’ and looked at things through the lens of my experiences with the technology industry as an investment banker, and the mining industry as a business owner. What will be the next trend in terms of technology that is premature, but the trend is set, the world is moving towards that direction? Being in the blockchain industry as an investor, I realized that the blockchain industry can deliver meaningful innovation to capital markets, more than any other industry.
We have made the capital markets system so complicated with technology and intermediaries. But with blockchain technology we are able to simplify it and mitigate the risk profile for market participants. Thousands of years ago, ancient times, a transaction was simple, between buyer and seller, and a witness. And essentially, we can go back to that. That's what I saw, but I could also see the bigger picture because of my experience as an investor and a policy advisor.
So, when I say ‘integrated global capital markets’ it's not something that’s abstract to me, I can see that, I can touch it, I can feel it. And therefore, that excitement is there every day, because I can feel that we're getting closer and closer to that vision.”
Kim created Finhaven in 2017 with the aim of creating a blockchain-based securities marketplace. In November 2020, Finhaven Private Markets was approved by Canadian regulators. I asked if he could explain a bit about what the process had been like, and what he sees as the potential of the marketplace.
“It started with getting rid of the noise. There was a lot of market speculation around blockchain and cryptocurrency. So, there was lots of noise, and lots of terminologies that were freely used, but removing the noise didn’t mean that we ignored them. We studied them. We tried to understand them and see what makes sense, what doesn't make sense, and what can be the path to my vision.
After a while we were ready to speak to the BC Securities Commission, our primary regulator. They welcomed our ideas and tried to help us to realize our vision from a regulatory perspective. That doesn't mean they want to compromise, they don't. They try to walk with you so that you figure things out along the way, with them. At the end of the day, I felt that we're not against each other. We are for each other, in fact.
There are many details built to protect the investors, while not compromising the innovations that we can bring to the markets. We started with a very clear vision and then removed the noise, cleared the path to the vision and communicated that with the stakeholders, including the regulators. And refining them in small details, in very fine details. Not hurting the innovations that we want to bring about. That requires lots of patience and creativity.
Sometimes we had to be stubborn about certain things. We don't want to compromise human quality. For example, what kind of values we want to abide by. We don't want to compromise certain values. You've got to be stubborn about certain things but make sure that everybody is on the same page, it's like a calibration every day.”
Bringing the vision into reality is so close for Kim and the team, but now the first big hurdle of regulatory authorizations is passed, what’s next on the agenda?
“We see acceleration. Currently we're opening Finhaven Private Markets in Canada, but we want to bring it to other jurisdictions. We see the opportunities and benefits of creating cross border transactions in Finhaven Distributed Network. That will be so beneficial in terms of creating the efficiency in cross-border settlements, in the current capital markets. The cross-border settlement part is so inefficient at this point for the securities world and we believe we can deliver substantial value to the market with that. That will be another area that we're working on and we want to do it sooner rather than later.”
Kim was named to their FinTech advisory forum in 2020. The forum has a number of aims, but primarily it serves to bring the technology and regulatory communities together and share knowledge so that they can learn together about the rapid changes in the industry.
“The FinTech world is changing very fast. It's rapidly developing as any other technology is. At the same time, there is a gap between regulators, market players, and the technology. When you're in technology it's hard to grasp the entire realm of regulations and market needs. If you're a market player, it's hard to grasp what technology can do.
I like to think of technology as a construction material. Let's say it’s an alloy steel. It's light and strong. It's lighter and stronger than in the past. It's a bit more expensive, but how are you going to use it? You probably don't want to use this alloy steel everywhere, but you know exactly which part you want to use it in. In other words, you give meaning to technology.
Unless you give meaning to technology it doesn't have value. We are in a good position now with the advisor forum, communicating with market players who understand the technologies as well.
We have been speaking with the regulators to see how the world can use these innovative technologies, so it makes sense for society. And how can regulatory bodies build their regulatory framework in a way that’s accommodating the change of the world rather than blocking it. That's a great mindset that the BC Securities Commission shows to the world.”
Speaking with Kim it’s clear that he has enjoyed a rich and varied life both personally and professionally. With a career that has taken him from New York, to the mining industry in South Korea, to the world of blockchain in the Pacific Northwest, I wanted to dig a bit more into some of the obstacles and challenges he’s faced along the way. Often it is not the challenges that define us, but how what impact did they have on your career and how they alter your perspective.
“I won't be able to name all the challenges because there were so many, too many to name. But every time I faced a challenge, I had one thing in my mind: ‘what is the most important thing for me to focus on here?’. By doing that I forget about all the other issues and I just focus on that important thing. Whether that hurts my interest or not, doesn't matter. Sometimes I might lose money by choosing that path, but if it is important for me, I choose the path, even when it hurts my interest. So that has been my role.
Even now, in terms of developing the Finhaven Private Markets. Every day, I think about what is most important here and grab that, not ignoring all the important details, but to get there, I’ve got to understand what is most important right now. And I shouldn't ignore that. At this point it's making Finhaven very successful so that we have wonderful investors coming in and enjoying the benefits of the technology and marketplace. Investment is a fun experience in fact. So, I see including myself, investors, they make an investment not just for money, just for profit, but the experience of investments, the process of investments is so much fun.
It's not just one issue. It doesn't mean that I ignore other things. It's about a choice. Bullets are flying around. You're in the war, what do you protect? You've got to protect your heart. You've got to protect your brain. Every day I’ve got to see where the heart is and where the brain is and protect them. By doing that, in fact, you tend to protect everything. If you focus on your toes or your fingers, you lose everything because you were focused on the small things.”
It’s an interesting insight into how Kim has approached the hurdles he’s faced, and it reflects a mindset that has enabled him to stay focused on achieving his goals and objectives whatever is happening around him.
Finhaven is operating in a disruptive environment, as blockchain technology has already made huge impacts on the banking and financial sectors, they are looking to bring it to the investment industry. Based in Vancouver, I asked Kim if the company had managed to create connections throughout the Cascadia Corridor, and what potential collaborations in the region would look like.
“BC, Washington and Oregon, we have similarities between the Cascadia Region, but then in terms of the capital market environment, there is different regulatory framework and oversight.
If you combined them all together, the scale of the economy is still not that huge, it's not even the size of California. So as one region, not just for the technology side, even for the regulatory side, if we can see some kind of cooperation in terms of regulations. Some sort of cross-border sandbox scenario, for example, GFIN [Global Financial Innovation Network]. If we could have that kind of environment in this region that would be good because we're more connected in real life. Whatever business we do, the scale of the economy is very important, the scale of business is very important.
Canada is a big country, but in terms of population, it's sparsely populated. So, the cost of a transaction in fact is pretty high because of that. On the other hand, in some of the Asian countries, there are metropolitan cities with 20 million people. If you think about the transaction cost, it's very low - they can deliver more innovative products into the market because the cost of delivery is much cheaper.
Instead of isolating BC, Washington State - even between Oregon and Washington, sometimes I see that there’s a clear distinction - from each other, we could have this innovative framework in terms of regulation together in this region. That would be exciting in terms of economies of scale that we can grow into.”
Speaking from his sunlit office in Vancouver, it’s easy to get excited about the vision for the Cascadia Innovation Corridor that Kim speaks so passionately about. The spirit of collaboration and innovation is alive, and entrepreneurs like him will continue to look for innovative ways of making the world a better place. With that in mind I asked Kim for three key takeaways from his journey to date,
1. Over the course of my career I have learned that in order to really understand the needs of other people that I have to understand my needs first. In many cases we don't even know what we want to eat for lunch and for dinner. It’s a very simple desire. What do I want to eat now? We're not even aware of what we want to eat at that moment.
It's like, when you're on a plane they say you’ve got to have the oxygen mask on first, before you can help another person, that’s the concept.
2. I’ve got to understand what is most important now, for me. My son is 16 years old. And I learned my role as dad for him when he was a little baby, one year old, five years old, 10 years old, a teenager... at every step, my role as father should change.
What is the most important now for me and for the stakeholders in terms of my role? We're about to run, but we're not running yet. So, I cannot be the CEO of a running company. I'm still a CEO of the company who's about to run, the responsibility is slightly different. You cannot generalize the role of a CEO in every case.
3. Time and patience. When I started a business career, I was in a rush. I sent a message to someone and these guys were taking many months to decide, it's so frustrating. Why? Because, you know, life. You’ve got to move.
Over a period of time, I realized the importance of time in a different way. Time is something that you cannot get back. Time is flowing. Sometimes you’ve got to let the time go and just be silent in a certain situation and time will solve the problem. It's about patience, and at the same time not losing the momentum, and making every moment precious because once it's gone it never comes back.”
You can learn more about Dohyung Kim and Finhaven here: https://www.finhaven.com/