Currently, capital is always a sufficient condition for projects and companies to come into operation smoothly. The need for capital in business is always constant. The main forms of capital mobilization include capital from shareholders, borrowing, finance leasing and raising capital on the stock market. However, start-ups face many obstacles when accessing these forms of capital mobilization.
Raise new capital through asset digitization, including tangible and intangible assets. That will be a new way of mobilizing, suitable for more types of businesses, with a much lower cost than conventional finance loans/leases because it is managed by technology and eliminates intermediaries, and at the same time overcome the disadvantages of raising capital on the stock market for start-ups (enterprises must meet the requirements for charter capital, business efficiency, etc.). The typical forms of capital raising are as follows:
1. ICO (INITIAL COIN OFFERING):
is a form of calling for investment capital quite popular in cryptocurrency projects (Crypto currency). When a company or group issues their own crypto currency, it usually creates a certain number of Tokens and sells these tokens to investors in various Crowd-sale. Usually developers will accept investors to pay in Bitcoin or Ethereum.
2. IEO (Initial Exchange Offering):
is a form of crowdfunding through the form of token sale on Crypto exchanges. If with ICO, you will buy tokens directly from the project. Then with IEO, the token will be sold on a certain exchange and those who want to invest can go to that exchange to buy. Theoretically, the token offered for sale under the IEO method on exchange A may or may not be listed on exchange A after the sale is completed. However, in most of the cases that I observe, the token that is sold IEO on any exchange will usually be listed on the exchange.
3. IWO (Initial Wallet Offering):
is similar to IEO but this form is issued on the blockchain Wallet platform, currently, there is VNDC Wallet Pro wallet as the unit implementing this form.
4. IBO (Initial Bounty Offerings):
is a structure that calls for resources to build projects, execute marketing plans and build user base. IBO trades Coins for ecosystem contributions. In an IBO structure, they receive the main reward in coins when the ICO is conducted. Thanks to IBO, millions of people with different skills and abilities can contribute to complete the tasks of an ICO project, making the successful launch of an ICO stronger than a single ICO. So IBO – ICO will be an ideal model of the new era. IBOs can reward service, membership-enhancing contributions, or anything else a project needs to grow.
5. IDO (Initial DEX Offering):
IDO means initial coin offering on a decentralized exchange. The DEX in the above phrase stands for Decentralized Exchange, or a decentralized exchange that currently has many providers such as uniswap and pancakeswap.
6. STO (Security Token Offering):
is a form of fundraising through the sale of tokens to investors. This form is somewhat similar to ICO (Initial Coin Offering). But it has a difference in that, in an ICO or an IEO, the coins/tokens do not represent any (tangible) assets or shares of the project. In STO, tokens are security tokens (or security tokens). It can represent stocks, bonds, funds, real estate… of that project or company. Based on the amount of security tokens held, investors will receive dividends (dividends), profits (from the company’s activities), shares, or any activity that generates profits of the company, project judgment. Therefore, STO is somewhat similar to a traditional IPO, but the tokens are issued by Blockchain, so it also carries the advantages of Blockchain & Smart Contract, creating an advantage over both ICO and IPO.
7. TPO (True Product Offering):
TPO is still basically a way to raise capital through a crypto exchange, but the project selection process is based on the deciding factor that the project has an actual product and token. usable in the product ecosystem, measured by the number of actual users. With IEO, the project only needs to pay for the exchange or have a close relationship with the exchange to be able to offer IEO on the exchange, based on the reputation and reputation of the exchange. In essence, this is just a marketing method when people only care about the token price will be x5 or x10 after going on the floor and the exchange only needs the project to commit that it will happen. The goal of raising capital or attracting investors who really care about the token’s use value is not what they care about. For TPO, investors need to become a user to use the product, evaluate and participate in voting for the project to be officially listed on the exchange.
8. DIPO (Digital Initial Private Offering):
is known as initial private digital asset offering, is another smart choice for companies to gain access to a wide range of trusted investors to raise the funds they need to expand their business. DIPO helps SMBs save costs for fundraising and, at the same time, ensure the transparency and security that every investor wants from their investments.
The model allows businesses and startups to raise capital by issuing tokens. Each DIPO project is audited and appraised before officially opening for sale to investors. LiveTrade is the unit that directly monitors the operation and development of the project of the project founding team.
The above are popular capital raising models through digital assets that you can learn and research more. And choose the appropriate form if you intend to raise capital for your existing startup or business.