How to raise 100 K for your project with an NFT share agreement
By Mary Maxey October 24, 2019
Learn how to use the groundbreaking NFT blockchain technology to create crypto contracts and attract investments for your business venture.
Imagine that you are an entrepreneur with a brilliant idea, you’ve brought together a capable team and are all ready to execute it, only to find yourself hampered by lack of funding. Your next step, naturally, would be to secure some seed funding to get your idea going.
Traditional methods of securing funding
Some traditional routes of funding that you can choose for pushing your venture forward are as follows:
●Applying for a government grant.
●Applying for a loan from a bank or multiple banks.
●Enrolling in an incubator challenge.
●Kick Starting a crowdfunding campaign.
●Or you can find one or more investors to invest in your idea and become a shareholder in the business in the long run.
This last option is the most common and safe way of securing investment in the market. However, investors are hard to come by and even more difficult to convince into lending capital to a budding business. What if I told you that there is another method of winning an investor using the newest wonder of the crypto universe; the NFTs?
Read on to find more.
Securing investments via NFT share agreement and its benefits:
Ok! Quick recap:
NFTs stand for Non-Fungible Tokens. These are digital assets/ certificates of ownership that are characterized solely by their unique properties and not their value. Hence, no two NFTs are exactly alike nor are they ever interchangeable.
These are secured by blockchain technology and can represent anything from gifs to digital art to mp3 clips.
Now you can use NFTs as a share agreement between a potential investor and yourself. This will give the investor several additional reasons to invest in your idea:
The ability to easily and quickly sell the share in a matter of a few clicks.
The chance to learn a new paradigm and participate in new emerging technology.
The transparency of the deal is always up for public viewing in the ledger; yet maintaining the privacy of the contractees.
This system is backed by a decentralized blockchain technology meaning that every new set of data is stored at several locations all over the world: making it nearly impossible to change it or commit fraud.
Investing in the age of Crypto:
An investor is someone who doesn’t work for money. They are instead looking for the right people and opportunities that can take their money, flow it through a viable business idea and use it to make more money.
The best investor is one who, instead of pressurizing you in your business, understands that investment is a game and is always open for new gaming opportunities to put their money in.
You only need to bring new viable options like the NFTs shares to the notice of such investors to entice them to your idea.
A step by step guide to securing investments through NFTs :
Here is an example to help you understand this concept better:
Imagine you need 100K in seed funding for a new venture. This venture is all about selling NFTs and other digital assets. You are looking for 10 investors who will contribute 10K each. 10% of the entire revenue will be given to the seed funders.
Your first step will be to create a smart contract specifying that the owner of 10 NFTs will obtain the 10% revenue generated by your business. A smart contract is a code stored on the blockchain ledger that ensures that the terms specified by both parties are most definitely carried out.
You create 10 unique NFT funder cards. And each of the 10 investors gets one. It can be displayed on their public blockchain ledger. This will help publicly promote both the business and the funder’s personal branding.
The owner of these NFTs will be able to sell these cards in the future at a higher price with just a few simple clicks.
All of this is stored and displayed publicly on the blockchain ledger so other crypto investors can observe the ups and downs of the market.
Smart Contracts will revolutionize the market:
Smart contracts explained
As mentioned above, smart contracts are codes depicting the terms of the agreement between two parties that are built into a decentralized blockchain network.
These contracts are self-executing; meaning they carry out the terms of the contract automatically and irreversibly once certain in-build specifications are met.
●Why smart contracts will attract investors and venture capitalists
There are several reasons why this technology will revolutionize business and markets:
The terms of the agreement are set in the code built into the ledger. It is open for the public to view and hence cannot be modified or corrupted.
Smart contracts automatically carry out the execution of the contract. This execution is irreversible and trackable.
A smart contract allows you to carry out transactions between parties without betraying anonymity.
With automated smart contracts in place, there is no need to involve any central authority or the legal system. Yet the entire process is very transparent and there is no room for any fraudulent undertakings.
Smart contracts via NFTs will lead to an automated process that will eliminate the wastage of time and energy that is spent arguing and negotiating a traditional contract.
This technology could prove a boon for under-developed and developing countries owing to the incorruptibility of the NFTs and blockchain systems. To give you guys a personal example, I’m from the south of Italy where fraud and corruption are big issues facing entrepreneurs, business owners and investors. Making this technology mainstream will rid the free market of this menace.
Non-fungible tokens are no longer simply digital assets that add to the personal wealth of their owners.
Used in conjunction with sister innovations, they have the ability to completely change the way businesses will run and transactions will be carried out in the near future: a future that is completely digital.
Written by : Andrea Varriale
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