So you have a great idea, you have a plan to make it happen, maybe even a working model, now you just need some funds to take it to the next level…
Project funding options used to consist mainly of approaching venture capital firms, banks and angel investors. But with the emergence of crowd-funding, initial coin offerings and many other alternative strategies, the funding side of start-ups has developed considerably in recent years. In fact, self-funding is now the number one form of financing used by most business start-ups*. Raising the money yourself can be an attractive option as it often involves spending less time searching for investors, and giving away less of the pie to others.
This article is about why we self-funded the Dominium platform, and how you can do it too.
When you think of setting up a business from scratch, it might seem like the budget is limitless. Product development, technology, legal fees, accountancy fees, marketing costs etc. don’t come cheap. But if you think carefully about what you require to make a basic version of your product or at least a healthy start, the amount of money you need might be less than you think. Try to narrow down your budget to the bare minimum required to produce a working model of your business or product, and start there.
At Dominium, our priority was to develop a working platform. Our basic requirements were a software development team, a solid technological infrastructure, an airtight legal structure and some basic marketing. When we started, this was our first milestone goal to launch the platform.
Some people will be willing to work for incentives other than money. Think about what you can afford to give away that will be worth it for you and for those doing the work. You could offer shares in your company, future dividends or positions on the Board of Directors. If your business has a utility token at its core, like ours, you can adopt a strategy that includes token giveaways, airdrops and bounties in exchange for community support, or good old-fashioned elbow grease.
At Dominium, we used a combination of these strategies as well as giving away DOM tokens as a part of a referral program. Once our platform was built, we wanted people to register on it, in order to gain users as well as troubleshoot potential problems on a new system. We launched a referral program that allowed people to register on the platform in exchange for a token giveaway. People were then able to invite others to register, earning both more tokens, and so on. This way, we got new users to test and use the system and they got utility tokens to allow them to use the features on the system for free.
Building a business alone is hard. Having a great team with a variety of talents and backgrounds will develop your product more quickly and provide you with insights you may not have had on your own. Getting good people can be expensive if you have to pay them a salary, but if you have a great product, those with an eye for a winner might be willing to work for a stake in your business. Others will even invest in you whilst also providing priceless expertise and advice.
Try to compile a well-rounded team: Depending on your business, you would be wise to include those with skill sets such as legal expertise, retail knowledge, online security understanding etc. Dominium is a global platform with an emphasis on property, regulation and blockchain, so our team’s experience had to be very broad. We now have a fantastic group of property specialists, legal minds, regulatory professionals, and blockchain gurus. Importantly, all the people who came on board at the beginning shared the same enthusiasm for the project and have consistently dedicated time and effort to its development.
You might be surprised what you can get online for little or no money if you shop around. There are hundreds of tools that can be used for everything from social media post design to building a financial model. Similarly, costs can be minimised by using cloud-based software and infrastructure, platforms-as-a-service and online marketing channels.
Once your product is ready to launch, social media accounts and business listings are highly effective ways of building a community and showcasing your product. Write your own press releases and contact journalists with news announcements for extra exposure.
Self-funding doesn’t have to consist of sole cash. You can put up assets such as property, securities (and of course cryptocurrency) to secure lending, investor commitment and third party services.
Since Dominium is a property platform, we placed our own property assets onto the platform and into the company, effectively giving a new business a several-million euro boost, whilst also enjoying the benefits the platform provides to the property portfolio. It was a win-win for our founders and for the company.
If you re-mortgage your house and risk your life savings to kickstart a business venture, others are more likely to believe in your commitment and put their hands in their pockets themselves. All the Dominium founders invested in the company from the ground up, committing time, money and resources to make the platform a reality. Every member of our team has committed significantly to the project, in some cases putting up millions of euros of property assets.
One of the most difficult parts of launching a start-up is dealing with moments of self-doubt. People will tell you your idea is not good enough, your team not strong enough, your approach too conventional or not conventional enough. Just remember that it is often the most ambitious, the most unusual or creative projects that are a big success. We are building a platform that exists across many jurisdictions, languages, legalities and cultures. It has never been done before and is extremely ambitious, but we all believe it will change the future of the property world and that is why we have self-funded Dominium. If we can do it, so can you.
