When a 70-year-old minerals company with its own 70-year-old security brought three-time Top Ten CEO of the Year Brian J. Esposito on board as its new CEO, company president and director Michael Reynolds knew it was time to take Diamond Lake Minerals Inc. (DLMI) to another level – by helping ethical businesses grow in this digital age.
Esposito brought his 20-plus years of experience running Esposito Intellectual Enterprises (EIE) and the scores of companies and joint ventures he created across two dozen different industry categories into a vertically integrated ecosystem. He and Reynolds now have nearly two years of working to bring to the public marketplace timeless business principles focused on healthy, sustainable economic growth and strong earnings – and creating new value for stakeholders in the digital world.
In an exclusive interview, Esposito said that the arrest of FTX CEO Sam Bankman-Fried in December 2022 and FTX's sudden collapse was a sign that security tokens would soon become far more significant than other crypto instruments. He decided that new revenue streams could be created using security tokens backed by real management and real companies.
Esposito and Reynolds decided to go "old school" – follow all banking rules and regulations, while creating a digital currency, while also relying on any other instrument that partnering businesses were comfortable with.
The two entrepreneurs, recognizing that business leaders know how to buy stocks, decided to create a security that could be legally incorporated into company business models, as easy to include in a portfolio as a stock, and with high value. Using the company's own security created in the 1950s, they transformed DLMI into a multi-strategy operating company and began marketing to companies and assets already under the EIE umbrella.
To ensure the highest level of competence, DLMI concurrently built an advisory board led by such luminaries as SkyBridge Capital founder and managing partner Anthony Scaramucci, E! Entertainment TV founder Larry Namer, and Detroit-based gaming and casino magnate Michael Malik, Sr.
Each member of the advisory board brings special expertise valuable in DLMI's stable of partnering companies – from fashion and beauty to real estate, gaming, and hospitality to wireless, technology, aviation, maritime, aerospace, sports and sports technology, education, liquor, charity, healthcare, and television, film, music, animation, and other entertainment fields.
DLMI's client base also extends to data management and storage, streaming, real-world assets, water and water treatment, gold and silver, consumer products, travel, health and wellness, AI and virtual reality, biotechnology, and construction and modular homes – and many more, With such a broad range of enterprises, DLMI relies heavily on its advisory board, whose members' expertise is tailored to the metaverse.
Scaramucci brings his expertise in finance, technology, and business strategy to help shape DLMI's strategic direction as it continues to redefine the future of traditional and digital securities. Namer and Marty Pompadur together have more than a century's experience in the media and entertainment industries, and Andrew Fromm is known for his expertise in music asset sales, songwriting, and artist development.
David Meltzer, former Leigh Steinburg Sports & Entertainment CEO; Colliers International Chairman and owner of Skinwalker Brandon Fugal; hotel magnate Raul Leal; and Bluedge Ventures CEO Agnes Budzyn further complete the advisory board.
With that kind of firepower, DLMI believes it is ready to take its share of the digital securities market, which is projected to grow from $10 billion in 2022 to $1 trillion as soon as 2028 for a compound annual growth rate of an astounding 45%. The global blockchain market value has been growing as well, from $3 billion in 2020 to an expected $39.7 billion in 2025 (a 67.3% CAGR), while the Security Token Offerings market, valued at just $2.28 billion in 2021, is projected to grow at a CAGR of 19%.
But the big ticket is the global investment management market -- $100 trillion in 2020 but projected to reach $178 trillion by yearend 2025 – representing a 7.2% CAGR.
That's a sizable market to operate within. But Esposito says one factor defining the market DLMI will seek to work with is for companies to be led by CEOs with modern ethics, moral values, and empathy.
Esposito says DLMI will take on a client only if he believes his firm can add value to the client's business. DLMI often has to explain to companies that its tokens and equity are backed by smart management with smart business models that push sustainable growth, making them a safe instrument in today's volatile marketplace. DLMI is also the first public company issuing special tokens that he expects to grow in value – just like a Mickey Mantle baseball card.
Esposito says the biggest obstacle to developing a rational crypto regulatory framework has been the Securities and Exchange Commission (SEC). Even though its new leadership is committed to developing a cryptocurrency regulatory framework, the transition will take time. Once fully in place, companies still face a learning curve to absorb and integrate the new policies designed to turn the United States into the crypto capital of the world.
DLMI's biggest challenge, though, says Esposito, is choosing from among the many great projects overseen by great leaders. DLMI's hybrid approach – intertwining "old school" money with cryptocurrencies – enables the team to work with a wide span of investors and businesses. And while some new companies only push tokens, the fact is that many, maybe most, Americans do not yet understand tokens – and it would be foolish to exclude them from moneymaking opportunities.
Esposito, Reynolds, and company have spent two years building a foundation and trust in the market with DLMI, during a time fraught with policy changes, and they agree they made the right decisions about where the world was going. Given Esposito's own track record and those of his fellow officers and advisors, the future looks bright for DLMI.
One year into his term as CEO, DLMI had raised $1 million; but now, he says, the firm also has revenues which help with the capital raising efforts.
That's a good thing, says Esposito, because "...there is a steady flow of inbound companies that want to be tokenized who come to us. They want us to act as a Sponsor and Advisor on MERJ and the Upstream Exchange and guide them through the tokenization".
"Many companies come to us, but we only choose the ones we deem best suited to work with our model," he continued.
Until recently, U.S. citizens were not allowed to participate in these offerings. Lifting that barrier to participation will help to create this boom as 2026 looms.
Esposito sees DLMI as a vital throughway to tokenization for perhaps hundreds of companies. And with the regulatory framework shaping up, and the economy poised to bounce back as companies pledge to reshore manufacturing and invest in new technologies, it is obviously an opportune time to have pole position in the digital assets race.
