How Any Startup Can Use Technology to Raise Capital
Do you know raising the capital or financial funds for any startup can be defined as the money or assets provided by the investors? The funds usually came from bank loans, private investors, and investment bankers for most of the time. But did you know you can use technology to raise capital?
Although technology has always helped humankind in a very efficient way, this time, it is also going to solve a huge and most challenging problem of how to raise funds for any startup.
And without having the right amount of capital investment, entrepreneurs and startups can’t move a dime to turn their business concepts into reality. In today's discussion, you are going to know how startups can use technology to raise capital with fewer hurdles and in less time! Let’s get started.
Does Wi-Fi Save Money?
As you know, this technology can help users to connect their cell phones to the internet without using wires. Compared to cellular networks, using Wi-Fi seems to be the cheaper option. More importantly, your smart phone will run more efficiently in the long run. Let’s discuss the benefits of using Wi-Fi on Smart phones.
E-Commerce is one of the hottest companies and business models for entrepreneurs for several good reasons. The industry has a global worth of $13 Trillion which is quite impressive.
Consumers tend to buy more products online and virtually compared to visiting nearby shops and superstores, and why they shouldn’t do it because it saves them a lot of time, energy, and money on filling the car tank. However, the e-Commerce businesses that are evolved around the technology to fulfill consumers' needs are more likely to grab the attention of investors than others.
Not only it bring your e-Commerce company under the limelight for investors’ money, but it also enables you to access easily in the first place for online marketing, which is more effective and perhaps the most important reason for using technology.
You may not know this before, but technology has gone far away than you think! There are several options for newbie entrepreneurs and startups to organize their expenses and budget with the help of digital platforms. For instance, the financial plans you develop with the help of software like Mint.com and iBank are more likely beneficial and transparent than ever before.
And as a matter of fact, it clarifies everything for you when you are in the process of raising capital for your business startup. Moreover, they also figure out some best possible marketing solutions that can help you save costs on marketing and advertisement of your product or service.
Another form of technology is social media platforms, and our lives revolve around them more than anything else. In the modern age of the internet, social media is one of the most basic and efficient tactic that not only helps you find an investor, but also enables you to reach a large audience on a global level.
There are plenty of social media platforms that are solely used for connecting business owners, entrepreneurs, firms, agencies, and shining star people who have ideas that no one has ever started.
For example, LinkedIn and Reddit are two platforms where you can discuss and even showcase your startup idea to investors. In fact, you can also know what your target audience thinks about your idea and how it’s going to change their life.
As we said before, technology helps you reach a large audience, but there’s always more! Investors don’t always have to be found by venture capitalists and bank loans. There are several crowdfunding apps like kickstarters that allow people with great ideas to show their business models to get started. However, these crowdfunding apps collectively raise billions of dollars every year, and if you have a chance there, you don’t have to go to capitalists.
There is no doubt that Bitcoin has become one of the most valuable digital currencies in the past few years, and it is now becoming one of the most trendy and compelling trends in the e-Commerce industry. Since Tesla started accepting Bitcoin as their payment method, it has become more legitimate and trustworthy than ever before.
Although, it is safe to say that several well-known e-Commerce platforms such as Shopify, Woocommerce, and BigCommerce consider Bitcoin as the standard form of currency. However, if you are looking for a complete guide to raise capital with Cryptocurrency, continue your reading!
Luckily, Crypto and Blockchain are the two most important elements in “Fundraising using technology,” which was nearly possible in the last decade. This guide will let you know the difference between raising capital in crypto via ICO vs. traditional methods.
ICO stands for Initial Coin Offering, which is a unique way of raising capital for any startup by selling digital assets based on Blockchain. It allows you to sell a token that the network will eventually use, and you will benefit from it.
As the demand for tokens increases, their value and worth will also get a huge exposure which means that investors are getting benefits from it, and so are startups. All this fantasized process becomes a reality when you are totally into using technology to raise capital. As a matter of fact, it will take longer than usual and traditional methods, but the longer it takes, the better the results are!
There are several advantages that can be acquired by capitalists or startups that raise capital with Blockchain. For example, the time frame is very short to create 100 lines of code to develop an Ethereum-based token. Secondly, the liquidity options are better than operating in a traditional way with capitalists as it can be operated 24/7 on a global level.
On the other hand, there are no gatekeepers and limitations to raise capital, anyone can directly raise capital that has a crypto wallet while sitting anywhere in the world. Last but not least, there are less paperwork and disclosure requirements which suck for startups.
Although Crypto is not a game for kids, it has some serious competition, and it is quite possible that your startup may face several hurdles and criticism from the crypto community itself.
The first thing that you need to understand is whether the ICO is the right way of raising funds for you or not. The risks are higher so are the benefits!
However, raising capital is a thing in ICO, but it involves several other factors that you need to know. So, before getting started, ask yourself these two questions:
1. How Blockchain benefits your business model
2. How you can generate a fair ROI on the investment of token holders over a long period of time.
Simply, you have to think about making a win-win deal while raising the capital for your startup! The reason is that there are thousands of tokens already existing in the Blockchain market. If you don’t have a legitimate reason or fail to convince them that their investments are safe in your business, you may think about raising capital through another way.
Lawmakers and Attorneys at law started understanding the law regarding Blockchain and cryptocurrency. But it is still left in blue because it certainly exists in the area of law where still no one can understand what is right and what is wrong. However, it is important for you to have legal expertise on board to clarify the nature of your token legally and make sure that you are not taking any wrong turn and risking the money of investors and ruining your startup.
Another essential element of raising capital with Blockchain is to identify what technology for your ICO will bring the results. Mainly, there are three technologies that you can pursue, Blockchain, smart contract, or tokens. Below we have mentioned their differences along with the details that are must-know.
Some projects and startups tend to create their own Blockchain, which is nearly impossible for a person who does not have even a single penny in his bank. However, developing Blockchain and using it to run their ICO is possible.
But, individuals who use established platforms such as Ethereum save themselves a lot of time and money. Creating your own Blockchain will give you flexibility and unique features, but it can also consume a lot of your time
A smart contract plays the role of a train engine. It handles the incoming purchasing of your tokens and enables the token holders to either sell or transfer their token shares. Moreover, smart contracts also help them to connect token wallets and more.
For some reasons, smart contracts need to be highly secured as hackers are always looking to exploit and break into the smart contracts to steal money from you and your fundraisers.
A token itself is a code that can be created in a very short period of time. You can categorize it as an investment or utility based on your personal preference.
However, every token comes up with legal requirements that need to be taken care of, and this is the point where we mentioned why you need a legal expert on this matter.
Raising capital with the use of technology is an innovative and unique way, but it still brings some downsides, such as big risks and a bit of initial investment. Although, it can bring you the money you need for your startup in a very short period of time, and there are no wrong turns when you make sure everything is safe and you’re ready to step into ICOs. Visit our sister website at WifiBlvd.com now to learn more about technology.