So, what options ambitious companies have today to grow their business when IPO isn't an option?
A number of alternative fundraising routes exist today that are leveraged by businesses to raise capital:
What it is?
A private equity firm invests money in start-ups or emerging, profitable businesses. They expect high returns from the original investment that is capitalized by exiting the original assets or securities position.
Advantages and disadvantages
- A stable and robust investor that will support the business for the upcoming 3 to 5 years
High Capital Allotment
Mentoring support to the executives
- It requires giving up to 50% stake of the business.
You might end up being influenced by the investors in the decision-making process diverting from the original vision for the interest of the investors.
What is it:
Venture capital is a type of private equity. It is a legal form of an entity that aims to put together the capital sourced from firms or funds. This capital is normally invested in small and start-up companies that show high growth potential.
It is more or less similar to the concept of private equity, but with VCs, startups have an advantage. VCs mostly prefer growing business and only invest 50% in the equity available to diversify the portfolio risk.
- Large amounts of capital can be raised
Help managing risk is provided
Monthly payments are not required
Personal assets don't need to be pledged
Experienced leadership & advice are available
Networking opportunities are provided
Collaboration opportunities with industry experts & other startups are available
Assistance with hiring & building a team is available
Increased publicity & exposure are likely
Help to raise subsequent rounds of funding is available
- VCs tend to take or share control over company decisions
Securing Investment through VCs is time-consuming and long-winded
Difficult to obtain VC company support, unlike private equity firms
Founder ownership is reduced
Finding investors can be distracting for founders
Funding is relatively scarce & difficult to obtain
The overall cost of financing is expensive
Formal reporting structure & board of directors are required
Extensive due diligence is required
Business is expected to scale & grow rapidly
Funds are released on a performance schedule
Losing the business for founders is possible
Leverage in negotiations is rare for startups
What is it?
An online investment platform for creating and launching offers, where people can invest in by purchasing digital assets offered by both public or private companies without geographical barriers.
This offers greater liquidity to both companies and investors. Legal compliance and security are also more when you raise capital through digital investment platforms, unlike alternative fundraising methods such as ICOs.
Online automated investment ecosystem offers a cheaper, easier, faster and more efficient way to raise capital.
- Eliminates unnecessary middleman between investors and companies.
High liquidity and 24X7 trading facility for investors
No geographical barriers
Facility to offer fractional shares to investors through security tokens for businesses.
- Finding a suitable investment platform is a complex task
Some platforms do not provide complete resources to manage the complete investment lifecycle
As the creator of a Turnkey Digital Investment Ecosystem, we want to encourage ambitious and growing businesses to adopt the new way of raising capital through security token offering.
DCI Ecosystem Team largely believes that using our Open, Democratic, Decentralized, Cross-asset Investment Ecosystem will allow businesses to create digital assets and launch security token offerings (STO) easily without getting stuck into a lengthy paperwork process.
Instead of jumping into a cumbersome stock exchange process to raise capital, opting for DCI Ecosystem will help you to complete your initial funding rounds in just a few weeks.
SMEs, growing businesses will be able to track, analyze and monitor their STO performance through a powerful user dashboard.
Product and service providers (e.g. accountants, STO legal advisors, etc.) will be there to guide companies to complete their STO in a legal manner with compliance to local regulations.
DCI Ecosystem will help growing companies by offering the necessary tools and resources to support their investment journeys, enable communication with investors, offer tracking facility for the fundraising event through an online dashboard and much more.
To Know more please visit the DCI Ecosystem dot com
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