How To Switch to Recurring Revenue

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Businesses without a subscription model can move to recurring revenue.

Here are some ways to take your business and make it recurring.

Set Up a members-only section on your website.

Put premium content into that section and charge a recurring fee to access it.

Membership models help you build a community of like-minded people.

Once you have a base of customers with a common interest you can upsell to other products.

Move the repeat usage of your product to recurring revenue.

Set up automated charging as a first step and later move to monthly/annual contracts.

It’s not necessary to move the entire business to a subscription.

Charge an extra fee for the non-recurring services when they occur.

For physical goods, create a subscription box in which the product arrives on a recurring basis.

One can adjust the price based on the frequency of usage or how much is included in it.

Hardware services such as IT and video surveillance can be moved to recurring revenue.

The ongoing support, data storage, and analysis can be placed on a recurring revenue model.

This could also apply to IoT devices in which the device must maintain connectivity to the network.

Consider these examples when moving your business to recurring revenue.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

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Recurring Revenue Business Examples

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

In the venture world, the recurring revenue business model is the preferred method.

The recurring revenue business model provides consistent demand.

Here are some example businesses using recurring revenue:

Software as a service -- this business model provides access to a software platform in exchange for a subscription fee.

It’s one of the most common businesses as software lends itself to repeat usage over time.

In addition to providing a service, it can also capture data for additional monetization.

Services -- businesses that provide an ongoing service such as lawn care, can also be put into a subscription format.

Since the lawn continues to grow and needs continual care, it’s a repeat revenue stream.

Membership -- businesses that provide an ongoing membership are ideal for recurring revenue.

Examples include businesses with loyalty programs in which one must be a member to gain access to the products and services.

Property management -- businesses that provide ongoing management and maintenance of a service fit the recurring revenue model.

In this example, the rent must be collected each month and problems resolved with the property.

Predictable cash flow and automated payments give the business a competitive advantage over non-recurring revenue businesses.

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In this episode of Investor Connect, we delve into the entrepreneurial journey of two innovative companies breaking new ground in their respective markets. The first part of the discussion revolves around a pet product currently in a powder form that enhances hydration and electrolytes for dogs. The conversation addresses common concerns regarding hydration, dosage, and the potential market impact of the product, especially as it transitions to platforms like Amazon. The speaker also shares insights from beta sales and the business's projections, highlighting the effectiveness of customer retention models and strategies to ensure product safety and appeal.

The episode then transitions to an intriguing segment on a transformative technology aimed at alleviating chronic pain. The entrepreneur presents a pain relief device based on micro points, initially developed for wound closure but discovered to be highly effective in treating severe, chronic pain. The story includes impressive results from clinical trials and a compelling explanation of the device's mechanism.

The discussion also covers the various health conditions the device addresses and the significant market potential, supported by strong sales metrics and strategic distribution channels. Listeners will gain insights into the challenges and opportunities faced by startups in the pet product and healthcare technology sectors. Through detailed explanations of safety protocols, market testing, and strategic planning, the episode provides a comprehensive look at what it takes to innovate and succeed.

The speakers share their experiences with product development, market entry strategies, and the importance of clinical validation, offering valuable lessons for aspiring entrepreneurs and investors alike. Hall T. Martin, host of Investor Connect, brings his signature tone and humor, engaging with the speakers in a lively conversation that not only highlights their innovative products but also underscores the broader market trends and investment opportunities in these dynamic fields. Don't miss out on this enlightening episode filled with actionable insights and inspiring entrepreneurial stories.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

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How To Maintain a Recurring Revenue Business

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

After setting up a recurring revenue business model, one must maintain the business.

Here are some key steps:

Most customers typically start with the basic service or product.

It’s important to make available higher-priced services.

Follow the good-better-best strategy of three-tiered pricing so you can upsell customers who need more.

For those who need less, you can keep them as a customer by selling them a lower-priced version.

One can also create a loyalty program.

By rewarding customers who use your service, they tend to stay longer and use more of it.

Remove the friction in payment.

Move from manual payments to automated payments if you haven’t already.

Build stickiness with the product by capturing data from the customer’s usage and making it a part of the product you offer.

Customers who come to rely on that data will stay with the product longer.

Finally, set up a customer service program that can fix problems as soon as they occur.

Resolving problems quickly will reduce churn.

Consider these steps in building your recurring revenue business ongoing.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

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Types of Recurring Revenue

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Recurring revenue can be implemented in many ways.

Here’s a list of the different types of recurring revenue:

Charge based on time -- this form of recurring revenue charges based on a period of time say a month or a year.

It’s simple and can be applied to all customers equally.

Perpetual use -- this type of recurring revenue charges for continual access to a service through which one can buy specific goods or services.

The perpetual model creates a customer base that can be upsold to other products.

Product usage-based -- this form of recurring revenue charges based on the usage of the product.  

Storage is an example of paying for the amount of storage used on a recurring basis.

Per seat usage -- this type of recurring revenue charge based on how many users access the platform.

This works for enterprise applications which can have varying numbers of users.

Price tiers -- this type of recurring revenue offers several price levels based on the usage and number of features used.

Freemium models -- this type of recurring revenue uses a free product for onboarding customers and then charges a recurring fee for the use of premium features.

Consider these variations of recurring revenue for your business.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

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Why Move to Recurring Revenue

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Businesses with recurring revenue find benefits over companies without it.

Here are a list of reasons why you should move your business to recurring revenue:

Predictability -- helps predict the level of demand for your products or services and the amount of revenue you’ll make from it.

Automated invoicing -- instead of chasing invoices each month, the recurring revenue model automates the invoicing process reducing the time and cost of collections.

Market intelligence -- a cohort of customers signed up for recurring revenue provides a great opportunity to run market research campaigns.

Customer loyalty -- customers signed into a subscription maintain greater loyalty to the product.

Greater revenue -- customers signed up for a subscription are good candidates for upselling and cross-selling.

Valuation -- businesses with recurring revenue command a higher valuation in fund raises and upon exit due to the stickiness of the customer base.

While it may not be possible to move your entire business to subscription in most cases some portion of the business can be moved to it.

Consider these advantages for your business. 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

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Top Blockchain Business Models

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Here are the most common business models for blockchain.

Utility tokens -- this business model provides a service to the users through tokens.

Tokens are minted and distributed to motivate the holders to foster the community’s purpose.

Tokens are the internal currency to the community.

Blockchain as a service -- blockchain services are provided to other businesses in which to transact their own business activities.

Blockchains are complex so many businesses seeking the benefits of it look for a host system.

This reduces not only the time to setup a blockchain but also the cost to maintain the hardware and software.

Development systems -- include blockchain applications for executing smart contracts and more.

Businesses adopt development systems to speed up the application development and launch process.

Blockchain applications -- this includes point applications such as fund transfer systems, user authentication, and identity verification solutions.

Businesses can adopt ready-to-run applications for their own networks.

Blockchain data storage -- this business model provides data storage bringing the benefits of blockchain security.

Businesses can use these solutions for their data storage needs.

There are many new blockchain applications and development systems coming to the market. 

These are the most prevalent business models thus far.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

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Business Benefits of Blockchain

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Blockchain brings many benefits to businesses that use it.

Here’s a list of key benefits to consider:

Trust -- blockchain enables trust between two businesses even if no prior relationship exists.

Decentralization -- blockchain connects two businesses through data sharing.

Security -- Blockchain brings a new level of security to the business’s data through its distributed storage.

Cost reduction -- blockchain can decrease costs through smart contracts and other automation.

Speed -- blockchain can accelerate the rate of business transactions through online connectivity.

Visibility -- blockchain stores all transactions on one network giving all the constituents visibility on the history.

Immutability -- blockchain brings a permanent record of transactions that cannot be altered providing an immutable record.

Control -- blockchain brings the individual control over their own data such that they control it.

Tokens -- blockchain brings the concept of tokens which yields online ownership, access, and resources.

Businesses across many sectors including financial, government, legal, and healthcare can benefit from the blockchain.

By reorganizing networks into a blockchain structure, businesses can improve the speed and lower the cost of business transactions.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

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Simple Agreement for Future Governance

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The blockchain brings new investment structures for ownership.

The Simple Agreement for Future Equity called a SAFE gives the investor ownership in an entity through a warrant.

The Simple Agreement for Future tokens or Equity (SAFTE) gives the investor the right to buy tokens in the future.

The Simple Agreement for Future Governance called a SAFG gives the investor governance rights through their participation in the community.

The SAFG shifts ownership from buying through investment to earning through participation.

The SAFG only gives governance rights to the holder.

This means the holder doesn’t own a stake in the community but rather can vote on policy issues. 

The SAFG is non-transferable and does not earn income. 

This increases the participation in the community for the long term.

Those with the right to vote on governance issues are primarily the users of the network.

This reduces the regulatory compliance burden on the community.

It creates participatory capital where the ones using the network have a say in how the network grows.

It reduces outside interference into the community.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

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In this special episode of Investor Connect, Hall T. Martin narrates the excitement of Ten Capital's first roadshow event in Los Angeles post-pandemic. The event brings together key players in the investment community, showcasing both innovative startups and Ten Capital's mission to build and foster an ecosystem for angel networks, venture capital, and family offices. Hall introduces the company's history and highlights its expansion into various cities, emphasizing their commitment to facilitating investor connections and startup success through both online and in-person events. With guest appearances from TechCoast Angels and Perkins Coie, the episode provides listeners with valuable insights into the collaborative efforts shaping the future of funding and investment in the tech industry. Lastly, the episode features a compelling pitch from Dylan Jones, founder of LYX, a hydration treat for dogs, highlighting the innovative solutions emerging within the pet care market.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

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Blockchain and the Future of Work

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The traditional company has a hierarchical structure of leaders, employees, and investors.

Blockchain enables a new structure called the Distributed Autonomous Organization or DAO.

The DAO replaces the hierarchy of the traditional company with a network of contributors.

The DAO consists of contributors as follows:

Instead of employees, the DAO has workers who earn tokens by advancing the goals of the community through their labor.

Instead of compensating service providers such as lawyers and accountants with cash, the network compensates providers with tokens.

For partners and customers, the DAO compensates them as participants who further the goals of the community through their buying and distributing the DAO’s products and services.

Instead of investors, the DAO has stakers who contribute the capital necessary to run the DAO’s business. 

The traditional hierarchy is replaced with a network in which each node is incentivized through tokens to foster the overall community.

The functions of the business are executed through smart contracts. 

The DAO expands the concept of the company from the employee, employer, partner, and investor model to a larger, more encompassing network in which everyone receives tokens for their contribution.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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Creating a Network for Your Blockchain Startup

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Blockchain startups build value through network effects.

The architecture of the blockchain creates several layers with which to foster a network.

Here are some key incentives to create a network for your blockchain startup:

Utility -- the system delivers a service such as funds exchange or data storage.

Cash -- the system provides tokens that can be exchanged for fiat currency.

Equity -- the system provides ownership stakes to those in the network.

Reputation -- the system provides reputation advantages to those in the network.

Access -- those in the network have access to resources such as investors for fundraising.

Branding -- the system provides a brand to those in the network such as a community that fosters a common goal.

NFTs -- the system provides non-fungible tokens that represent something of value within the community such as a piece of art from a specific artist.

Tokens-- the system provides tokens to those in the network that bring benefits to the holder such as access to resources.

Incentives attract additional users which in turn increases the value of the network.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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Business Models for Blockchain

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Traditional businesses provide a product/service and earn profit from the sales.

These businesses are in manufacturing, distribution, or retailing.

Blockchain uses a different business model due to the decentralized nature of the network.

Here are the key business models:

Blockchain as a service -- provides the blockchain for others to use to further their community goals.

Ethereum is an example of a blockchain as a service which provides the network and infrastructure for running applications.

Tokens as a utility  -- this business model uses tokens to provide utility to the user.  

An example is a network using tokens to provide fund transfers.

Blockchain-based tools -- this business model uses blockchain to provide a specific service.

An example is a blockchain-based system that tracks real estate ownership.

Blockchain as storage -- this business model uses blockchain for storing information and data.

An example is a data storage company offering a blockchain-based product for storing data.

Blockchain services -- this business model provides services related to blockchain development.

An example is an engineer who codes smart contracts for blockchain-based applications.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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Ethereum Tokenomics

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The Ethereum network is one of the largest blockchain networks available.

Here are the tokenomics for ETH, the token of the Ethereum network.

There are three constituents in the Ethereum community as follows:

Users who hold ETH are either investors or application users of the network.

Miners who process the transactions on the network which generate new ETH.

Stakers who invest funds in exchange for ETH to verify the transactions. 

Users pay a transaction fee to the miners and a tip fee to the stakers for the use of the network which decreases the supply of ETH.

Miners generate new ETH in exchange for processing transactions which increases the supply.

The tokenomics can be measured by reviewing the total number of active addresses holding Ethereum and the number of transactions.

The applications running on the Ethereum network also point to the strength of the chain.

Too much demand inflates the price of the token.

Too many new tokens generated deflates the price of the token.

A good tokenomics system keeps a balance between supply and demand achieving equilibrium.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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Token Vesting Strategies

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Vesting is the process for distributing an asset to someone who is entitled to it.

This could be shares of stock in a company.

Cliff is the initial wait time before the distribution begins.

Startups use vesting to distribute shares to the founders and employees.

A typical startup vesting schedule is a one-year cliff and a four-year vesting period.

This means the first distribution comes one year after the start of the process.

And the shares are distributed each year over four years in equal amounts.

In Web3, tokens can also be distributed using a vesting schedule.  

The typical cliff time is 6 months. 

The token can be vested using a linear model in which case the token is vested in equal amounts over time.

Alternatively, the token can be vested on specific dates at varying amounts.

The linear model provides less price fluctuation and more stability in the community compared to specific date vesting.

Vesting reduces short-term speculation and provides an incentive for token holders to remain with the community longer.

Consider the vesting schedule for your token distribution.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

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Token Distribution Strategies

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

There are several strategies for distributing tokens.

Here are three key areas to consider when designing and distributing your token:

Leverage the community.

Design the token incentives to encourage the community to promote it.

Give current token holders additional benefits if they attract others to the token.

This process requires more engagement from the community which takes time to bear results.

Vary the token price based on demand.

As demand for the token increases so does the price for it.

As demand decreases so also the price decreases.

This provides a pricing mechanism to increase the network and dampen speculation.

Use lockups to create price stability and token holder longevity.

In general, lockups reduce speculation overall.

Adjust the lockup period by varying the price based on hold time.

The token holder can earn a greater reward from holding the token if they commit to locking it up for a longer period.

The design, distribution, and hold time bring new strategies for distributing the token.

The goal is to encourage others to join and remain holders of the token to provide stability to the price and longevity to the community.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

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Generating Network Effects With Tokens

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Network effects increase the value of a community.

The greater the network the higher the value.

Tokens can be used to generate network effects through the incentives they provide.

To create network effects one must overcome the chicken and egg problem.

So how does one attract users before the network is fully formed?

Here are some key steps to foster network effects in your community:

Airdrop tokens to potential users to create an initial base.

Look for communities already formed but not growing and reach out to those users.

Offer additional value and engage them through an airdrop.

Identify a subgroup and gear the token offering to their specific interests.

Set up in-person events to explain what one can do with the token.

Provide exclusive value to the early adopters of the token.

Set a time limit for adopting the token to spur action.

Set up partnerships with similar groups to foster the adoption of the token in their group.

Network effects work well at scale but getting there takes additional steps.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

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How To Build Tokenomics for Your Project

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

In designing tokenomics the goal is to incentivize the community toward a common goal.

This can be done through the design of the supply and demand as well as specific incentives.

Here are the steps to design tokenomics for your project:

Identify the utility of the token and the value it will bring to the holder and how it aligns with their needs

Build the token mechanics.  

This includes the minting, supply, and demand as well as the burning of tokens.

Determine if the tokens are active or passive.

Active tokens process information while passive tokens simply represent a utility or value.

Determine if the token can be transferred or not.

Decide the monetary and fiscal policy of the token.

Determine how the token will be sold or distributed.

Check the legal issues to ensure compliance in your jurisdiction.

Check compatibility with smart contracts for enacting the tokens on a blockchain.

Test at each stage to ensure proper functioning.

The objective is to create a stable ecosystem meeting the needs of the community.

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Let’s go startup something today.

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Elements of Tokenomics

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Tokenomics focuses on the supply and demand of the token in an ecosystem.

Supply and demand determine the price of the token.

Increasing the supply of tokens generates inflation of the price while decreasing the supply causes deflation.

The demand side is determined by how the market views the token.

The market assesses the potential return on investment for the token.

The ability of the token to generate revenue through yield farming would increase the token’s ROI.

Additional utilities such as governance capabilities, access to community resources, and access to revenue streams increase the token’s ROI.

In some cases, pure speculation will drive the price of the token.

Vesting schedules, lockups, and other tools can be used to increase the demand for the token.

Airdrops can be used to establish an initial community of token holders.

Tokens can be burned to increase the value of the token by increasing scarcity.

The goal is to create a stable price for the token and provide incentives to encourage others to become token holders.

These are the basic elements of tokenomics for managing the token supply and demand.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

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In this episode, Hall welcomes David Zavoianu, founder of Guided Planet, an innovative company redefining convenience with its AI-powered concierge service. Guided Planet’s cutting-edge technology allows users to seamlessly book a wide range of services—like private jets and flower deliveries—through a simple app interface.

David shares the company's ambitious goal of scaling its user base from 1.4 million to 10 million active users, supported by a $10 million investment round. He also dives into the challenges of building an in-house AI system and the advantages of eliminating middlemen to achieve higher profit margins.

Hall highlights TEN Capital’s unique retainer-based approach to connecting startups with investors, offering greater flexibility and robust networks through both online and in-person meetings.

As the conversation wraps up, David inquires about TEN Capital’s virtual options to accommodate his busy travel schedule. Hall reassures him of the program’s adaptability and notes the upcoming fee increase in January.

Tune in for insights on scaling AI-driven businesses and fostering meaningful investor connections!

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
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What Is Tokenomics

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Tokenomics is a combination of “token” and “economics” and encompasses the creation, distribution, supply and demand, and destruction of tokens in an ecosystem.

It’s important to apply proper tokenomics or token management for the following reasons:

Incentive -- provides incentives to move the community towards its goals.

Distribution -- disburses the tokens to miners and stakers who validate the transactions, and users who provide value to the community.

Stability -- create a stable price for the token so the community remains focused on the project at hand rather than the price volatility of the token.

Yield -- create a token of value that can generate income through interest rate arbitrage.

Dissolution -- a path for removing tokens from the ecosystem to foster a stable price and prevent inflation.

Supply management -- maintain an adequate number of tokens to grow the community and meet its objectives.

Vesting -- required hold time of the token to prevent short-term speculation and create cohesion in the community.

Tokenomics fosters the economy of the community.

A good tokenomics structure leads to a healthy community through proper management of the token economics.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

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How To Value a Token

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

In valuing equity one looks at the revenue for high-growth companies and cash flow for low-growth startups.

From this one can determine the valuation.

Tokens bring additional features that impact the valuation.

In addition to ownership, tokens can bring the following benefits:

Voting rights -- gives the holder the right to vote to determine the policies of the community.

Yield -- gives the holder the right to lend out the token in order to generate income through interest rates.

Utility -- gives the holder additional capabilities such as access rights to resources.

To value a token one must consider not only the revenue and profit streams but also the voting rights, potential gain through yield farming, and utility.

To find a final valuation one must assign a value to each of these components and then sum them up.

This gives the token several more levers with which to pull to increase the value.

If the interest rates go up on yield farming, then the value of the token should rise commensurate with it.

If the token holder has the right to vote to increase the value of the community, then the value of the token should increase with it.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

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Cap Tables With Tokens

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Web3 introduces tokens into the startup world.

Tokens bring a new layer of incentives and must be accounted for in the cap table.

This shows up in the form of community and treasury entries.

It’s not uncommon for the community to be the majority of the cap table.

The tokens provide incentive and must be kept as a separate component of the cap table until issued to the holder.

In the Web3 world, the treasury is another newcomer to the cap table.

In the Web2 world, the treasury value was spread across all investors as a component of their equity stake.

The treasury must be set aside to compensate the token holders.

The token can be treated as a warrant.

Warrants give the holder the right to exercise an option to convert the warrant into cash.

The holder may or may not convert the token.

Tokens bring new value but require additional support structures for maintaining a pool of tokens, distributing the tokens, and redeeming them.

This brings new entries to the cap table.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

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Using Tokens As Incentives

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Tokens bring a new layer of value to the internet startup.

Startups can provide incentives to their prospective users to help grow the startup’s network and provide value.

In the Web2 world, the startup founder must solve the chicken and egg problem by attracting users to the network before there’s a network to join.

These companies offered free services and products in exchange for user engagement.

Over time, this could grow into a bigger network providing more value to the user.

Network effects and their benefits kick in after the network gains scale.

In the Web3 world, the startup can provide tokens at no cost to the user to join.

This accelerates the growth of the network by giving users something of value at no cost.

Unlike the Web2 world, Web3 provides tokens in return for the user’s engagement.

The token incentives give the user some value that they can retain and use after they’ve joined the network.

The Web2 world depends on people giving their time, content, identity and other assets in exchange for a short-term use of the product.

Web3 layers a new level of value into the process by giving a token which the user maintains even after they’ve joined.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

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Applications for Tokens

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Tokens work well in creating a digital representation of a physical asset.

Here are four applications for tokens:

Precious metals -- gold, silver, platinum and other precious metals can be difficult to handle in their physical form.

Tokenization can represent a block of precious metals making it easier to buy, hold, and sell it.

Fractionalization can break a large block into smaller pieces reducing the cost of entry.

Real estate -- land and property are good use cases for tokens.

Tokenization can represent the ownership of a property on a blockchain making it easier to track.

Blockchains provide a permanent record of all transactions and ownership.

Logistics -- supply chains are ideal use cases for tokenization.

All information related to a set of source materials, goods, and history can be tracked on the blockchain.

Everyone in the supply chain has visibility on all goods, transactions, and history.

Non-fungible tokens -- creates a digital representation of a physical object such as art.

The blockchain can facilitate the use of NFTs tracking ownership, rights, and other aspects of it.

Everything is moving online.  

Tokens can track the ownership, fractionalize the asset, and provide information about it online, speeding up the transaction.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
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