How Do We Solve the Innovation Funding Crisis?
Who would believe that for all their success and a world awash with speculative capital, there is a crisis in funding innovative companies? Innovation and Tech companies are the economic powerhouses of the 21st Century. They dominate stock markets, pay high salaries, and create wealth at levels we have never seen before. But despite the endless chatter about the businesses getting funding, one quickly discovers that the ones getting publicity are in fact just a tiny fraction of all deserving companies.
For every funded company you hear about, thousands are going begging. That must change.
The issues facing entrepreneurs are:
- Not getting any funding
- 2. Getting funding, but not enough or quickly enough to support rapid growth
- 3. Conditions demanded by VCs and Angels mean entrepreneurs lose control
So, How Do We Solve the Innovation Funding Crisis?
Currently, Early Stage companies needing investment are limited to personal resources, friends and family, angel networks, angel investors, venture capitalists, and the government.
Early Stage funding is dominated by wealthy venture capitalists. But very little of their money actually trickles down to fund Early Stage opportunities, because they prefer to invest in strong Growth Stage businesses, which guarantee a return. Governments invest in Early Stage ventures because they know how necessary innovation funding is.
However, the presence of government investment is the clearest possible indication of how dysfunctional the current Early Stage funding model is.
The Crowd Arrives!
The largest source of speculative capital is the public who pour billions into gambling every year. Surely Early Stage investing would be a much more constructive outlet for their desire to risk their money in the hope of high returns? But currently, their options for doing so are limited.
Tokenized Crowdfunding [tCF]
The ‘tokenization’ of a company’s shares on a blockchain means that you own tokens that represent ownership. Every transaction is recorded on a blockchain database, so no other means are required to verify ownership. Financial assets like shares are ideal candidates for tokenization because it makes them significantly easier to buy, store and sell independently and globally.
By tokenizing a company’s shares, a crowdfunding system can:
- Build a massive audience because opportunities can easily be offered globally
- Reach a large audience who understands the potential of the opportunity
- Allow people anywhere in the world to invest, in small amounts
- Provide simple management of investments
- Provide asset liquidity as tokens can be sold on global exchanges
Go deeper into the subject by reading our litepaper: https://dacxicoin.io/lightpaper.pdf
