Starting a small business is full of challenges. From building your team to finding the right business model to finding the right market segment, there’s a challenge on every single step. However, nothing can be as challenging as finding the funding. Because at the seed stage, a business needs not just funding from any source – it needs funding from the right source.
Otherwise either the founders end up diluting a lot of their stake, or they end up piled by a huge amount of debt that they can’t service. There must be some cheap source of funding that neither requires them to dilute a sizable part of their holdings nor comes with a heavy rate of interest. Finding that source of funding is where a lot of startups end up digging their grave.
Fortunately, a new solution is emerging to fix the funding challenges of small businesses. And that solution, not too surprisingly, is coming from the decentralized finance space. The industry that is redefining almost every part of finance is set to redefine the game of business financing by providing cheaper and more accessible sources of funding to the businesses of the seed stage.
Many decentralized funding platforms are emerging that are helping new startups raise funding for their business by tokenizing the business ownership. Let’s explore the advantages and limitations of this new funding model in a bit more detail.
There are many advantages of decentralized crowdfunding for both business owners as well as investors.
Advantages for entrepreneurs
Advantages for investors
Blockchain and decentralized finance can be a gamechanger for small businesses financing. - Mr. Thomas Ganz, Founder, Coinstox
So that was an introduction to the fascinating world of Decentralized crowdfunding and how it’s revolutionizing business finance. If you are willing to invest in any good startups through this new method of investment, you can do that using such platforms. Or, if you’re a business, you can benefit by securing funding for your business from this platform.
In case you still have any questions about it, contact me, and I shall try to answer them. I would also love to hear your thoughts about this new method of business funding, so speak your mind.