In the second episode of Above the Parapet, Gary Woodhead talks with Profile about founding, growing and scaling CurveBlock, a blockchain start-up that is on a mission to democratise access to real estate development and investment.
In each episode of Above the Parapet, a member of the Profile team sits down with an entrepreneur who is bringing a new idea to market. The podcast shines a spotlight on innovators and disruptors who aren't afraid to swim against the tide in their industry – and challenge conventional wisdom.
After becoming interested in the emerging crypto industry in 2018, Gary co-founded CurveBlock. Since then, the company has worked with a number of leading accelerator and VC programmes, including NatWest Accelerator, The Founder Institute, and Loyal VC.
Taken together, he has more than 29 years construction industry experience, not only within the real estate development market but also other development sectors such as commercial, industrial & agricultural developments.
He also successfully scaled one of Europe’s largest building materials manufactories, leading to a private equity buyout during 2016.
Profile (P): Welcome to Above the Parapet, where we talk to entrepreneurs who aren't afraid to challenge conventional wisdom within and outside their industries.
Today, I have the pleasure of being joined by Gary Woodhead, co-founder and CEO of CurveBlock, a blockchain start-up democratising access to real estate development and investment.
With over 29 years of experience in the construction industry, he co-founded CurveBlock in 2018 to pioneer financial inclusion in the real estate investment sector. Working at the cutting edge of finance and sustainability, he's making an impact by opening the doors for people to invest in carbon-zero, energy positive and sustainable real estate.
Gary (G): Thank you, Jordan. A pleasure to be here.
P: So, I'm genuinely fascinated about people's stories, Gary, because most people, if you look around, are in corporate careers — that's well and good. We need people to be in corporate careers, as well.
But I love to hear people's journeys from where they started and what brought them to entrepreneurship itself. Can you just tell me about your kind of own career history?
G: My background, so, you could say it's classic entrepreneurial. I'm a school dropout, so I dropped out of school at the age of 13 and found myself kind of shoehorned into the construction sector.
So, I attended Leeds Building College, graduated there and upon graduation, the early nineties recession hit.
So, at the time, I was scratching my head, "What do I do?" and it was either go on the door with the masses or join the forces. So, I decided to jump in and join the armed forces, the Royal Armoured Corps.
And after several years, I left and came back onto the civil street, back into the construction sector because the recession was over. I spent nearly three decades in the construction sector from residential, industrial, commercial, agricultural, and really cut my teeth out there in the real world.
And it was during the latter part of that career, I started to buy Bitcoin, purely as a hobby, nothing more.
And being from construction, you're looking at this new technology and thinking, who else is playing in this arena as a start-up, as an innovator, that uses this technology for a use case that could have massive ramifications on a positive sense for society, and quite simply, nobody was.
So I was a hobbyist investor in these tech start-ups, and it was out of frustration that nobody was looking to fractionalise the market in a regulated manner that I put my thoughts onto paper. There were real estate blockchain companies out there, a lot of them breaking regulatory law.
But the majority of them were basically making digital REITs, a real estate investment trust, kind of — earn a fractional share, get a share of the rent, and nobody was looking at the bigger picture.
So, that's hopefully not a too long intro.
P: Lots to discuss there. I'm going to dive into kind of individual little elements of that through the next 20 minutes or so. The first question: what is CurveBlock? And what does it do?
G: Quite simply, it's a FinTech platform that sells digital shares, which are evergreen for life, and those shares have legal rights to half of all the profits that CurveBlock makes, present and future. So, what that means for your average person is they can be an investor in multimillion-pound construction developments from as little as £10.
And those shares, the unique part of the shares, they don't own the company; they own legal rights to half of all the profits. So, what this means for society is they can be part of the shared economy with £10, £1,000 or £10,000.
And there's no headache. You never have to sit and pick an investment. "Which investment do I invest in? Do I invest in houses being built in London? Commercial units being built in Harrogate, a holiday park being built in the Lake District?".
The shares are ownership of all future profits, so that's unique for the public because we have to understand that nurses, cleaners, and shop workers, they don't have the time, or the mindset, or the due diligence abilities to analyse which investment is best for them.
So, technically, it's a giant mutual fund — it's the masses and construction.
P: And, you've focused on what I would call, kind of, positive developments, net positive developments for the environment, and why look at that market?
G: For us, we believe it is the future. Let's look at the realities, we've not invented the wheel here. These technologies have been around for decades, however, they have never been commercially viable up until now.
So, as an example, solar, you look at the history of solar and where it is now as a product. So now there are many manufacturers within that vertical, and it's become commoditised, but yet the technology has become better. So, what you now see with that marketplace is an affordable product that actually performs way better than it ever has previously.
Then look at the reality of life, inflation, the cost of fuel, the cost of energy, and the cost of living; the world is falling apart with regards to where people's basic bread and butter comes from.
If we can build houses that produce more renewable energy than they consume, there's no energy bills, so this is a huge positive for people when you look at the fact that most energy bills now probably replicate the cost of a mortgage. So, to eliminate that is huge.
P: That's all great stuff, right? And we should be doing more of that.
Let's go back to day one: when I speak to entrepreneurs, the first person that they have to sell that idea to is their team. Some have a co-founder, some don't. So, talk me through that journey. How did you build the team? And did you have to do a lot of convincing?
G: The convincing was probably with the angels. So, with the team, it's an interesting story. The idea was there, but not being academic, so I hired a freelancer to take the model and create the business plan.
I stuck my head above the parapet, and out of nowhere, NatWest Bank got in touch on LinkedIn. "We've seen your idea. Can you come and have a chat with us?". So, I totted off down to NatWest, and after a couple of interviews, we got accepted into their accelerator because we're not crypto. We're doing this the right way, the regulated way, which obviously appealed to the bank.
And it was, kind of, head above the parapet, then you start talking to people because, technically, you're just a guy with a piece of paper and nothing more.
And just through connections and talking and blogging, I started talking to one chap from America over LinkedIn, and then we started to have virtual meetings.
And, lo and behold, he's now a co-founder. I was introduced to another chap, working for high net worth in London, very intelligent on the real estate side of things, project delivery, and planning gain, and he's now a co-founder.
But, the trying to convince people, those guys, they got it immediately because that's the beauty of the founders of CurveBlock: we're not a bunch of techies trying to build something in a sector we have no idea about; it's the other way around.
We understand the tech, we don't know code, we understand the tech, but we understand the sector more. And that's obviously why these guys came in, and they're now co-founders.
P: And, look back at that first year or 18 months, what was the biggest challenge you faced as a business, as a start-up?
G: Without a doubt, being first-time founders trying to raise investment, it's kissing frogs, as we like to term it — it's bloody hard.
If you are a serial entrepreneur, you can walk into a room of angels and go, "Look, built this exited, built this exited, yada, yada, yada". They will pretty much throw money at you. But when you're a first-time founder with an idea that potentially is so big, people are just like, "This guy's really crazy".
It was an awful part of the roadmap, but it's a numbers game. I often refer to it as darts: for every hundred darts you throw, you may hit the ball once or twice, and as you get better at pitching and more traction events come, the easier it becomes.
But at the start, it was very hard, and thankfully, because of my blogging on social media, talking about real estate, talking about smart contract technology, out of nowhere, this random person contacted me basically saying, "I've been watching you for a couple of years on Facebook and I've just looked at your new idea. I really believe in you as a person, from what I've learned, I'd like to invest".
And at the time, I'm thinking, "oh great, he's going to come onto the platform when we get the MVP and maybe invest £100".
And he turned around and he says, I'll like to make an angel investment at £75,000. I was like, "Whoa", that changes everything because all of a sudden, you now have accountability. And that was where it all started, that first investor right back at the concept stage.
P: And to other, kind of, first-time founders listening to this, you've gone through that really difficult journey, I guess it felt like you were, kind of, swimming through mud, right?
P: What kind of tips or, kind of, lessons do you have for them as they go through this process? Is there a right way to do it? Or is it just going out there and kissing as many frogs as possible?
G: Well, the reality is: the bigger the solution to the problem, the bigger the chance you will get investment. You know, we can all have ideas, but if it isn't going to change anything, people are going to be reluctant to invest.
I guess the blue touch paper for us, and it was NatWest, thankfully, it was one of the mentors in NatWest that told us. HMRC have a thing called SEISS and EIS, and it's basically a huge tax perk for UK taxpayers to stimulate them to invest in the crazy entrepreneurs, with tax relief and zero capital gains.
I wasn't aware at the time, but basically, 99% of UK angel investors only invest if they get that perk because the tax month's technically hedging the bulk of their investment. So, that would be probably the biggest tip to really help an entrepreneur get funding.
And the other one is partnerships, whether that is a partnership where it's an accelerator or a scale-up program, and the company behind it is reputable, because then you're getting brand association.
A lot of investors are lazy, and they can't be bothered doing hours, days and weeks of due diligence on this potential start-up investment. And a lot of them will look to see what due diligence the founder's been through already.
So, those would be my biggest tips: the tax perks for investors and leveraged partnerships, whether it be through mentorship or actual genuine partnerships of the business.
P: And let's skip forward a bit: there's this kind of moment where the business originates, and you are working hard to get it up to scale, to convince some angel investors to come in and, kind of, get the business started. And then, skip along a few years, now you are funded by VC, and I think in the middle there is Covid, two coronaviruses, the whole lockdown.
P: Just talk me through that journey in the middle: what does it take to get from Angel investment to VC? And did Covid, kind of, impacted you as a business, as well?
G: So, I remember when Covid hit, Boris was on TV saying, "Right, we're shutting construction down", and I was like, "Oh my God, what the hell are we going to do?". Not only was construction getting shut down, but society was getting shut down.
All the investors that were ironed in the fire, that were live conversations, disappeared off the face of the earth, and most of them said the same thing: "I need to protect my existing portfolio" because those people need runway through this pandemic.
And, by sheer chance, my algorithm on my phone had picked up, and it flashed up saying, "Due to Covid, Silicon Valley's going virtual". So, Covid actually brought a positive thing: it opened access to something that typically wouldn't be there without the pandemic.
And we applied, made it through, and graduated, and that brought our VC, because the VC that backed us, Loyal VC from Toronto, Canada, they only back two types of innovators: INSEAD and Founder Institute graduates.
And, again, it then led to positives post-Covid because we had a VC. You go into a room talking to angel investors because you still can do VC and Angel at the same time, and when they realise you've got a venture capitalist actually on your cap table as an investor, and you're reporting to them on a monthly basis, people are just more warming. It's more palatable as an investment.
P: And I always ask this next question, you know, it sounds like every kind of barrier that got in your way, you found some way, by hell or high water, to get over it.
But was there any moment where you made a mistake and had to backtrack — "Oh, I shouldn't have done that, I need to, kind of, turn course now or readjust"? Or any mistakes that you made that you had to, kind of, correct down the course?
G: Yeah, the main mistake we made was the original idea was all projects to be individualised. And it was whilst we were having a conversation with a potential investor, and he actually turned around with the solution and goes, "why do you just make it headache-free and have everything in one pot? So, it's a giant mutual fund".
And we did it. We pivoted, we looked at his solution to the problem, we looked at our solution to the problem, and his was the no-brainer.
So, that was the biggest backtrack that we've done — can't really call it a backtrack; it is more of a pivot. But that was a major alteration in the business model because that is the key to anything: it's all about user simplicity.
And, if we can now have a product where the user never has to spend a minute of their time, you've got a solution for the mass market because it's not a product that's only geared for people with set abilities; it's geared for anybody. So, that was the biggest change.
P: Which brings me to my last question, actually, Gary, it ties it up really nicely: where is CurveBlock in two years, three years? What does it look like? What's the vision?
G: Personally, I would like to see multi-jurisdiction users. So, let's say that's the UK, Japan, Canada, and ideally the US, but one step at a time.
So, multi-jurisdiction users on the platform, and on the real estate side, at least a half a billion portfolio — I know it sounds a lot, but £500 million in real-estate it's a grain of sand on a beach.
P: Gary, thank you very much.