Innovation Tagline: The goal of this project is to level the playing field of wealth creation and to fund businesses of the future
Project Keywords: #token #equity #wealthcreation #futurebuilding
Project Members
Project Description (no more than 1,000 words including graphics)
This project is a public marketplace both for businesses looking for a capital injection and potential investors seeking an equity stake. Businesses would be able to post the amount of capital they're looking to raise and a total equity percentage they're willing to give for that capital injection. Those businesses would also be able to post financial information/ balance sheets/ etc. for potential investors to conduct due dilliegence on wheter or not it's a good investment for them. Potential investors can be anyone who is looking to diversify their investment portfilio. Those potential investors would buy tokens on the blockchain that represent an equity position in that company. They can invest any amount of money they're comfortable with and their equity stake would be an equal percentage of the total equity the business is willing to give up based on the total capital injection they're seeking. For example, if a business is seeking a total capital injection of $100,000 for 10% equity and a user buys $5,000 worth of tokens that user has a .5% equity position in that business. That logic would be executed through chaincode. Users would have the option to hold their token all the way until a potential exit for that business and get their return, sell back their equity at any time, or trade their tokens with other users who might own tokens in a different business. The target businesses for this solution are middle market private companies that might need a capital injection for expansion/ R&D / etc. Businesses that are too mature to seek funding through traditional VC routes or don't want to give up controlling shares. It allows your average person access to private equity and levels the playing field of wealth creation through business investments, something most people don't have access to. In another higher risk tier businesses that are attempting to build products and services of the future (i.e. biotech, quantum computing, etc.) that are in a purely research phase working towards breakthrough products are services can seek funding for their research if there is a long-term plan to create revenue through their research. This solution would utilize the hyperledger sawtooth marketplace to build application and would utilize a react web application and graphQL backend for business data. Each business in the marketplace would be an organization on the blockchain and potential investors would have permissions to interact with the chaincode and chaincode execution would by verified by a majority of nodes.
Problem
The problem: Access to business investments is siloed to PE firms and investors need large amounts of cash to have access to those types investments which contributes to the wealth divide. Businesses also need more options and better access to capital sources to help them grow.
There is currently no opportunities for your average person to invest smaller amounts of cash in businesses to gain an equity position in a business. Let alone a marketplace for businesses to post thier needs and for investors to shop for positions that suit them.
Competition in this area is slim given equity funding was only recently allowed through regulations.
Solution
Through a blockchain this solution takes out the middle man of PE firms and opens up these types of investments to a broader audience and provides more trust for the investor and the businesses in the marktplace through the blockchain.
There are other crowd equity solutions but none to my knowledge built on a blockchain. The benefit here is the equity agreement for both parties is verified by the immutability of the blockchain so each party can trust their transactions are protected and agreed to.
MVP for this product would be the ability for a business to upload data to their profile and chaincode for potential investors to execute the business logic of recieving tokens for their percentage of equity given their invested amount.
Accomplishment and Team
As of right now this is a solo team. I'm currently a full stack developer with a major U.S. technology consulting firm working on multi-million dollar contracts. I also have a background in data science and am a SAFe agile certified product owner/ product manager. I've spent the last year learning how to develop blockchain solutions with hyperledger fabric and gaining a solid understanding of blockchain as a technology and how it can be utilized. My goal is to be a major player in bringing the world into Web3.
I understand this is a fairly large concept to try to build out. I could certainly benefit from additional dev help both with the hyperledger element and the frontend as well as any additional domain knowledge of the private equity space. I would be open to finding a partner and could certainly benefit from a mentor. I think my combined knowledge of the hyperledger framework agile product management are great assets to lead a team in a succesful build.
Project Plan
The goal of the prototype phase would be to have the chaincode features in a functional state. Meaning chaincode can be invoked to return tokens that represent a percent of a percent total given the cash total and the cash investment. By the end of the launch phase the database and frontend elements to handle both data uploads by businesses to their profiles and the interface for potential investors to purchase tokens for a given business should be in place as well as to have the functional ui in a test environment. A one year goal would be to have a stable application and begin reaching out to potential businesses to get them on the platform.
I think I have a good starting point using the hyperledger sawtooth marketplace. I think I'll get a lot of functionality "for free." Aside from that I'll take a scrum agile approach working in planned sprints to execute the work and use project tracking software to monitor and organize the work that needs to be done.
Some potential risks include the need for a robust backend to keep a record of the data businesses upload. But I do think tools like graphQL can simplify that to some extent. Another risk factor may include how detailed displaying business mgiht be. But I think for MVP that data could be just be presented in a grid. Overall I think using frameworks like the sawtooth marketplace and React will mitigate a lot of development risk.