The cryptocurrency world has changed the way we think about crowdfunding and early-stage investment. Just a few years ago, startup funding involved rigorous screening processes by venture capitalists; today, companies raise tens of millions of dollars with barely more than a whitepaper.
It's a great time to raise money, but for investors this comes with increased risk. The regulation-free environment of token sales means that in the event of a mismanagement of funds, early investors have few legal options to turn to in order to recover funds or influence a company's business strategy.
That's why SmartContractChain is building a platform that will harness the best of both worlds, providing entrepreneurs and creatives with access to funds, while guaranteeing the security of investors' money.
SmartContractChain will leverage not only the power of cryptocurrency for rapid fund distribution, but also tap into the logical and provably transparent nature of smart contracts and distributed ledger technology to ensure that operating profit are assigned to investors in an auditable, immutable manner, all delivered across the stable and scalable Ethereum blockchain.
Latest Whitepaper Pitch Deck 3 Sheeter
Things to be aware of
Not all nations are legally permitted to participate in crowdfunding platforms and if a creator has his or country in the list of registered countries, then they face the additional burden of having to find investors from that country itself since these platforms do not facilitate cross border investments.
Commissions and Charges
Crowdfunding platforms are not cheap as many platforms could charge even as high as 20% of the raised fund as their commission which leaves creators with significantly lower funds for their actual operational purposes.
History of Failed Projects
Because of the rising number of failed projects or projects that could not yet prove their maturity and returns on investments, investors and backers become hesitant to invest in new projects listed on the platform.
Lowered PR Attention
There isn’t much of a marketing budget or strategy used in crowdfunding that carries the message of a start-up to potential investors. This prevents a free flow of investment because investors do not have clarity on how great the project is or what big a potential they have with the right funds to operate.