Why understanding potential is so important to long-term investors
There’s one thing big-time venture capitalists and small-scale crowdfund investors have in common. Many of them are only vaguely familiar with the product or project they’re putting their money into. Venture capital firms with dozens or even hundreds of new projects on their books don’t have the time to dig deep. And crowdfunding platforms generally don’t provide sufficient market data for robust due diligence.
Due diligence is challenging for any early-stage investment because it calls for product, market, commercial, and team evaluation. A lot of it is opinion-based, and much relies on guesswork and assumptions. That said, it can — and must — still be done effectively. Because without it, investing is really more like gambling; based on little more than gut feeling and blind optimism.
With that in mind, it’s no wonder that crowdfunding has never reached its true potential to drive innovation and accelerate wealth generation for millions of people worldwide.
Dacxi estimates that as many as one million new high-potential ventures fail every year due to the lack of adequate innovation funding. The paradox is that the appetite for venture funding is enormous. All over the world, there are brilliant new ventures reaching the market every day. And there are virtually unlimited funds with investors who want to find opportunities to grow their wealth. Yet, even so, there’s a major disconnect between the two.
Global fintech company, Dacxi, asked the question; why isn’t there a way for the entrepreneur and their potential investors to be on the same page from the start? They are building the answer, with the Dacxi Chain.
Matching innovations with the right investors is key.
Bringing the right people together is a critical function of the Dacxi Chain tokenized equity crowdfunding platform. When investors have an intrinsic understanding of a new venture’s use-case, they can make a realistic assessment of its value and the traction it will get in the market. That’s why the Dacxi Chain focuses on building in end-user validation — creating a better option for both sides of the innovation investment equation in the process.
How does the Dacxi Chain Work?
This example illustrates how the Dacxi Chain will work in practice:
A civil engineer in Nigeria visits a farming community in a rural area to scope a project. Recently the community had been the beneficiary of an international aid project run by a European agency. The agency had installed water filters in the homes of the villagers to improve the quality of their drinking water. However, the filters weren’t working properly. They were European filters designed to work with the high water pressure found in European cities, not the very low pressure found all over the developing world.
Seeing the problem the engineer thinks there must be a better solution. He goes back to his workshop in Lagos and over the next few months designs and builds a new type of filtration system that is effective with low-pressure water. He builds a series of prototypes, tests them in the local market and they work perfectly. Soon he is manufacturing them for sale and can’t keep up with demand. He recognizes that he has a very good opportunity on his hands — his invention could be used throughout the third world to keep people safe from the waterborne diseases that are responsible for millions of deaths every year. But he needs $2 million in funding to scale up his operation and sell his product internationally. That used to be where his trouble started. There would simply be very little chance of raising the money.
But the Dacxi Chain tokenized global equity crowdfunding system changes everything! Now getting funding is a genuine possibility.
He makes contact with the local Dacxi Chain Venture team and presents his product and business plan.
The Dacxi Chain team does due diligence on the deal and concludes that it is a sound investment opportunity. Once all the regulatory compliance and due diligence are completed the offer documents are prepared and the equity in the new venture is tokenized on the Dacxi Chain blockchain. The deal is presented to everyone who has registered their interest in this type of innovation. The reach of the Dacxi Chain is global, so there is a large pool of potential investors for every deal. An irrigation specialist in Indonesia receives an alert from his local Dacxi Chain Venture team. He understands the new filter because he’s familiar with water processing technology and immediately sees its potential — he can even see how it could be used to expand his own business. He buys into the deal converting Rupiah into Dacxi Coin. He sends the Dacxi Coin via the Dacxi Chain platform to Nigeria. The equity shareholding is registered and the engineer converts the Dacxi Coin into his local currency and uses it to help expand his business and increase its value.
Read the full article: https://www.publish0x.com/navid-ladani/why-understanding-potential-is-so-important-to-long-term-inv-xxykjwy
