A lot of innovation-driven startup businesses today are struggling to raise good capital funds from investors across the world, despite having a unique business idea/product/service.
Their inability to list on popular exchanges due to inadequate annual revenue and unavailability of alternative fundraising platforms affect their growth. The startups also face many other hurdles during fundraising.
Let’s figure out the key problems faced by startup business during fundraising:
Poor Annual Revenue: Majority of the times, the venture capitalists and angel investors don’t put their bet on startups because they have a poor balance sheet and annual revenue despite having an innovative product or idea. The low net worth and paid capital also deter startup businesses to list on public exchanges for fundraising.
Lack of in-market validation of the product: Many startups have innovative projects that can become highly successful in the near future, but the unavailability of a suitable way to figure out their market validation deter many institutional investors from putting their money on such projects.
Lack of collateral to support their business loan: As discussed, startups do have innovative products or projects that are in the development stage, but they are unable to raise funds or loan from investors due to lack of collateral to support this loan.
Unavailability of a suitable Funding Platform: This is one of the major concerns for startup businesses, not having an adequate net worth to raise funds through IPOs. Many startups are looking for fintech solutions/platform where they can come in direct contact with investors and raise funds for their projects.
Lack of Investor Trust in Fintech Startups: Today, investors don’t rely much on technology startups as they often don’t have an actual underlying project. So, investors put their money in copy-past startups in online retail, hyperlocal logistics and taxi aggregation sectors.
Problem Solving DCI Ecosystem Solution…..!!!!!
Seeing such problems faced by emerging startups during fundraising, DCI has come -up with a most innovative and well-researched blockchain project of this year where it will create an investment ecosystem where the individuals, businesses, firms, service and software providers will benefit from each other.
The emerging startup business who are looking to raise funds can easily register on DCI cross-asset investment ecosystem to find suitable investors for their business and raise funds.
DCI is an open ecosystem where startups can list their business to raise funds, whereas private and institutional investors will find suitable investment opportunities with the help of third-party service providers like robo-advisory firms, lawyers, accountants, etc.
DCI will provide the opportunity for startups to list their business on the DCI Platform and raise funds via security token offering (STO), which are highly secure and regulated. That’s not all, apart from startups, the existing companies who are looking to raise funds for their specific projects (e.g. improve production capacity, technology infrastructure, etc.) without increasing debts can also join DCI ecosystem.
DCI will offer digitized project backed tokens (DPBT) for smaller companies (annual revenue of $1 to $5 million) who want to raise funds for specific projects. The loan will be offered to the company based on project funding needs, and payment will be proportional to the fraction of annual revenue generated. The company must pay back 1.5 to 3 times the initial loan agreement.
Coming back to startup businesses, once they register on the DCI ecosystem for fundraising via STO, they can avail the services of third-party vendors such as accountants, lawyers, etc. who will help them to conduct STO properly and offer specialized legal & financial advice and support.
DCI also has a well developed legal and governance framework that will ensure a completely secure, transparent, and trustworthy trading environment for everyone, including startups, private investors, institutions, third-parties, etc. who are part of the ecosystem.
To unlock more secrets about DCI, please visit the DCI Ecosystem and register on the website: Register Here
Originally published on: DCI Ecosystem Blog