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REVITALISING THE TOKEN MARKET

By Gavin Smith, CEO at Panxora

 

With interest rates near zero and fears that whipsawing stock markets are set for further plunges, many investors are turning to alternative markets in the search for returns. Money flowing into cryptocurrency hedge funds and trusts like Grayscale is at all-time highs and the large cap coins seem to be entering a bull phase, but that capital is not trickling down into new token projects. Why are blockchain token projects struggling to attract funding?

 

Seed investor scepticism

Setting aside the reputational issues with mainstream investors, even those educated in blockchain tech are not signing on the dotted line. This is certainly due in part to the hangover from the early token market.

During the heady days of 2016/17, investors could buy tokens during the token sale, and if the project was legitimate – even if the business case wasn’t particularly strong – prices would soar based on market enthusiasm. Early investors purchased at a discount and cashed out almost immediately for a handsome profit – and then repeated the process again. The token sale allowed founders to amass a war chest large enough to finance the entire token project – without having to give up a large chunk of company equity. Everyone got what they needed out of the deal.

Running a token sale is far more expensive today than it was during the boom. Getting the attention of the token buying public in a market where advertorial has replaced editorial is expensive. This coupled with a regulatory framework that requires the advice of accountants, solicitors and information gathering of KYC details for investors all comes with an escalating price tag.

To accommodate the change in cost structure, tokens now need to acquire funding in two rounds. Frequently there is a first round where capital is raised from a few, large investors. This cash is then used to finance setup and marketing the main token sale. The token sale, in turn, provides the capital needed to run the entire business project.

 

Bridging the gap between token projects’ needs and early stage investors

To successfully get a token through the capital raising process, founders must acknowledge the risk assumed by those very early investors and reward them appropriately. And given that tokens may stagnate or fall in price post token sale means that a deep discount in token price is not necessarily attractive enough to get investors to commit.

Many tokens have turned to offering equity in the business in the effort to raise that first tranche of capital. If you look at the number of successfully concluded token sales, the downward trend has continued since Q2 2018, so offering equity is not sufficiently stimulating the market.

 

Two sides of the coin

So, what is the answer? It’s a complex question but one thing is certain. Any solution must be rooted in a deep understanding of what both parties need to successfully conclude the deal.

On the one hand, token founders’ needs are clear: they need enough capital to get the token ready for and through a successful liquidity event that will provide sufficient funds to build the project. The challenge lies in striking the right balance between accruing that capital and making sure not to offer so much project equity that give up either the control or the incentive founders need to drive the project forward.

On the other hand, while the needs of the seed capital investors are more complex, there are two areas of key concern: transparency and profit incentives.

 

Transparency can mean many things, but almost always includes providing more informative cost and profit projections, as well as answers to a whole range of questions, not least the following:

  • What happens to investor capital if the token sale event fails? Token founders must be transparent from the outset. The token market is highly speculative and early investors run the risk of losing their money should the project fail. Therefore, investors require a well-established fund governance process in place throughout the fundraising so they can make informed decisions on whether the project is worthwhile. 
  • How are the assets for the entire project managed? Investors need to know that their money is in good hands and that proper treasury management techniques are being used to manage cryptocurrency volatility risk. Ideally, an independent custodian will be used to hold the funds and limit founders’ ability to draw down the capital – releasing funds to an agreed-upon schedule of milestones.
  • How are the rights of investors protected, for instance in the case of a trade sale? Investors need to know what happens if the company they are investing in is sold. What impact could this have on the value of their stake? Would a separate governance framework need to be established? These are critical questions and investors aren’t likely to settle for any ambiguity in the answers.

Profit incentives are important when it comes to encouraging early participation in a project. Investors need convincing that the proposition will keep risks to a minimum and focus on providing a strong probability of a return. This means that founders need to be able to defend the case for the increase in the value of their token.

But this isn’t the only incentive that matters. Investors can also be incentivised by preferential offerings such as early access to projects and services that might help their own business.

Let’s not forget that investors don’t support just any project. What really matters is that there is something special and unique about the business being underwritten by the token. Preferably something that could be shared upfront and directly benefit the investor – proof that the investment is really worth it.

And that’s what it all comes down to. Ultimately, while token projects are having a hard time finding funds at the moment, if they can prove their worth and provide full transparency and clear profit incentives to ease investors’ concerns, the money is out there. And deals can be done.

 

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Business

THE REASON WHY YOU NEED A LAWYER FOR YOUR BUSINESS

– Peter

Before we get into deeper into the law of business, let’s find out who the lawyer is or what the lawyer is. So, who or what is a lawyer? This is the truth that depends upon skills and specialties there are several types of lawyers. Some fight for civil rights, some lawyers sue for or against criminals, and many other lawyers can continue their careers throughout their careers without having to go to court!

 

Duties of a business lawyer

By keeping it simple, business lawyers help business owners to solve any business-related problem. To put it more clearly, business lawyers usually take steps to protect and secure the business to understand the issues that businesses are facing and what problems they may face in the future.

 

What kind of issues do traders or business owners can face?

  • Starting a new business – LLC, S Corps, or any other type of business, having trouble choosing which type of business to start? Correcting a mistake when making a decision can be costly incredibly and the issues may not be obvious even after many years of starting a business!
  • Writing Contract – What form do a business owner need when hiring employees or bringing in new clients? Do they have to sign any kind of waiver? Which points should be mentioned in the forms? Business attorneys help you draft contracts to meet your business’s unique needs.
  • Violations of Agreements & Controversial Agreements – What should you do if an agreement is in dispute? What happens in the case of a controversial contract? Your client is not paying? Is any of your employees leaking confidential information to the opponent? The business lawyer will speak on behalf of the business owner on all of these and similar issues, and will even if necessary they will file a lawsuit.
  • Attachments and Acquisitions – Thinking of buying a competitor? Has your business been captured by a large company? Are you having forces with other businesses? Make no mistake about having a qualified business lawyer to guide and advise you in all these processes.
  • Resolving Business Problems and Demands – Even well-established and successful business owners may face a variety of disabilities such as sexual harassment, discrimination, sick leave, workplace safety issues, and all. A skilled and experienced business lawyer represents clients in case of any such problem and keeps them informed of best practices with giving training in applicable law.
  • Risk Management & Compliance – Even established businesses can get benefits from any good and experienced business lawyers who can develop systems that are compliant and risk-averse.
  • Real Estate and Disputed Property – Whether your business has its property or leased property, lawyers will be needed to help protect it. Business attorneys discuss leases and sales, navigating confusing and complex tenancy and real estate laws.

 

Why Do You Need a Business Lawyers?

So now, business owners and traders may be facing problems in a variety of legal situations or may need legal help with a variety of legal issues. Business owners, both large and small, hire lawyers for a huge assortment of reasons, such as buying property, setting up a new venture, preparing taxes, and complying with labor laws. It is important to work with a lawyer to make sure your trade or business is compliant and efficient.

You must be aware of all the business strategies when hiring an attorney for the best assistance. A lawyer will inform you about various legal issues and improve your skills in dealing with all kinds of situations. Certain circumstances make it a must for settlement owners to make their lawyers involved. These include legal violations by employees, negotiations for filing discriminatory lawsuits, sale of businesses, and so on.

Business lawyers are required to provide legal guidance aspects related to contracts in all types of business. Only a skilled lawyer can guide you through the various stages of negotiation, document preparation, and review for any type of business transaction.

In most cases, the business owners or traders lack the necessary experience and knowledge to manage the various legal aspects to run a business. Hiring a skilled and experienced lawyer to manage your business can be of great benefit to you in preparing documents, getting legal protection, also protecting your business deals and interests.

 

Business agreement

Discussing and reviewing lawyer-binding contracts is usually one of the issues for which lawyers are hired. There are types of agreements that business owners can enter from partnership to lease agreement.

Creating a business agreement process involves the exchange of information between parties. It is used to oversee the negotiation, negotiation, and finally pre-signing of an agreement and to negotiate agreements.

 

How to hire the best business lawyer?

However, the hiring process of a business lawyer is time-consuming and stressful, especially if your business does not have any confirmation or communicative idea to have a successful start-up.

  • Understand the ideal opportunity to hire a business attorney

This is unique to each business. As a rule, it is sensible not to hold on to this business relationship until it is properly anticipated and the services provided by a lawyer are needed to find it. This way you will have plenty of time to do thorough research by yourself, get some information about their services and rates, and conduct an underlying interview to verify if you agree.

  • The kind of attorney you need is zero

Most business lawyers have the necessary education and skills to handle management needs. It involves forming an LLC or company, drafting a business temporary staff, or an associate at an event. However, if you can only think about assessment law or only you need a trademark then you are good to find a lawyer in your area. If you think you are searching for long run insights for your start-up or established business, you can hire a decent business attorney. Later, they can contact you, masters, in the same way as needed.

  • Find a lawyer who will understand your area of work

You need a business attorney, but you have no clue what is your business up to or how your industry works, you will face the challenge of different correspondence. This is specifically true in circumstances where your business is exceptionally specific and regulated for the reason that you would prefer not to make legitimate errors regardless of the material they have information on, appoint a lawyer who is interested in learning, and prepared to continue trying to recognize your market or specialty.

  • Choose a lawyer who comes up with a variety of resources

Great legal services are not usually modest. Accordingly, there needs to be the most explosive in your chest. It is suggested that you hire or appoint a business lawyer who can take a variety of resources to your table. How is this possible? The business lawyer you are thinking of is an exchange company or a person from different congregations who can be beneficial to you. Do you have any network of professional lawyers or do you know when will you need master services? Is it safe to say that they will get to know potential clients, different clients, and serious collaborators? Look for point-by-point solutions as they can assist you to settle on the right choice.

  • Make sure you are well aware of their fee structure

You should not panic or be intimidated by examining any potential costs with your business lawyer. Whether your business is a small start-up or an established one, you need an estimate of your legal expenses. Traditionally, lawyers charge per hour on their services, yet now some business lawyers have decided to provide a specific cost estimate for one particular service. Still, the most well-known lawyer is a good combo of hourly and stationary charging. You 1st need to check the game plan of your choice with your possible lawyer and then talk openly about your desire to stay away from the problem.

But if you think about these tips for a long time, you will have the option of separating the best business lawyer from a group of lawyers to manage all the legal part of your dream business.

 

Conclusion

Businesses tend to retain levels that can help them with various legal tasks. It is advised for time-consuming and complex issues that are beyond the range of a business owner’s skill who is capable to manage that alone.

 

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Business

SOCIAL MEDIA AND THE FINANCIAL INDUSTRY: TOP 5 REASONS TO DEVELOP A LONG-TERM STRATEGY

Social media is not just for people to share stories and opinions anymore, and it has not been just that for a long time. Nearly every platform is a place for businesses, including financial institutions, to build a following, share important information with active or potential clients or customers, and reach out to people in a variety of ways, whether through text, images, or videos. And while we doubt a solely meme-based strategy will work for your business, a social media presence is vital, and you should consider how your company can use it to its fullest.

To do so, you will need a long-term strategy. While developing one might not be easy in a constantly changing online landscape, here are some of the top reasons to start developing your long-term strategy as soon as possible:

 

1) You Can Be Ready for Major Opportunities

The world is constantly changing, especially in these current times, and while there are many things that can happen, there are some key situations you know your business is prepared for. Whether it is a downturn in the economy or circumstances that would lead to a ramping up of investments across the board, you want people to be able to know where to go and who to talk to. With a social media plan, you can respond to these opportunities quickly and effectively, ideally with less confirmation and more action.

And waiting for the right time to start is the only wrong choice that matters now. Your business will need time to build an infrastructure, a social media methodology, and a following. By the time that is done, any new opportunities will have passed, or will certainly not have been seized on to their fullest potential.

 

2) You Can Build Trust in Your Institution

While you likely do not want your clients constantly worrying about their accounts (that is what your institution is there for, to alleviate such concerns), you also should not be completely absent from their minds or exist only as a distant and replaceable entity that provides a very basic service. You want what makes your organization great to shine through, and with a social media plan, that is more likely.

By staying in the public eye through providing important and useful information to them free of charge on social media, among other initiatives, you can improve your company’s brand in a significant way, and likely retain clients and gain new ones in the process (whether by word of mouth or improved natural traffic) through positive reputation and a sense of trust in your people. It is an investment that might take time to pay off, but it will pay off.

 

3) You Can More Easily Promote Your Online Systems and Resources

If you can provide direct links to your pages, sites, and tools, it is much better and quicker than giving someone a pamphlet that they might never read. Social media allows for just that, without the commitment of an email newsletter or similar techniques.

And while you certainly have people already using your institution’s online tools (and it would be hard to imagine your company does not have them in 2020 to at least some degree) you can use social media pages to better direct them, increase usage as opposed to more inefficient methods, and provide information as to their best uses. You want the investments made in technology and design to pay off. Use a social media plan to make that happen.

 

4) You Can Build a Team and Mission

As you are certainly aware from all other parts of your business, a good team and good processes make all the difference, and with a long-term plan, you can create the foundations for those personnel to thrive and give them clear instructions on how you want the company to be seen by active and prospective clients. Once people know what they are working with, they can work better.

A planned team will be able to be more organized and be able to use data of several types more efficiently than a simple unplanned posting schedule. You will be able to track what is working and what does not all the better for the changes.

 

5) You Can Be Proactive Instead of Reactive

Rounding back to the first point, if you have a long-term social media strategy for your financial institution, then you can plan for the future, even if that future is uncertain. You can have a plan that allows your social media and marketing teams to work more easily in conjunction and to target the likely people to use your organization’s services in the near future. As opposed to responding to events, you will be at times anticipating them.

Consider the top websites of recent years. While you probably aren’t operating on the same scale, does a single one of these websites not have a significant social media presence on at least a few platforms, if they are not one of the most trafficked websites in the world? Your financial institution needs to go to where the people are, and ideally be there before people start looking for answers. A long-term social media plan allows for just that.

 

Conclusion

You do not need to start investing all of your marketing budget into social media or create a team that’s as large as some of the top companies in the world. You just need to get started and get your priorities clear when it comes to social media. Even devoting just a few resources towards creating a consistent, long-term strategy can make the difference between stagnation and success over the next decade, and given that every competitor is either already working with a plan or soon will, its best to start working as soon as you can.

 

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