Opinions expressed by entrepreneur The contributors are themselves.
If you’re reading this, you’ll likely agree: starting a Web3 business is daunting and confusing. At least, that’s how I felt when I first started funding my business with Web3’s early stage crowdfunding solutions. The learning curve was almost insurmountable. However, my perspective changed after sitting down with my friend Metta World Peace – yes, the former Lakers legend who brought home the 2010 NBA Championship. He taught me how his $1 billion venture capital fund evaluates its portfolio investments.
“There are two types of founders,” Meta told me, “those who have experience and education, and then there are founders who are visionaries who know exactly where they want to be.” The founders he looks to invest in, he says. They take calculated risks. “You want to take it step by step, make sure you’re building a good product, test it before you spend a lot of money building the wrong technology architecture, And be careful not to blow your investment money because I’ve seen a lot of people lose money very quickly.”
A calculated approach is more than needed in today’s volatile market. Despite the recent bankruptcy of the FTX exchange, entrepreneurs are creating and innovating in this sector – and why shouldn’t they? According to recent research by Cornell University, the global blockchain market is expected to be worth around $67 billion by 2026. Even with the crash of Bitcoin, the total value of the digital currency market is around $900 billion, and hundreds of Web3 projects have attracted billions in funding. Despite the uncertain economic conditions, Meta still sees an opportunity in this growing and emerging market, and as a result is investing in blockchain technology projects today.
Not everyone sees it that way though – venture capital money has been cut in half. This is why many entrepreneurs turn to alternative financing options in addition to raising venture capital.
1. Collecting capital and finding investors
Have you ever invested in a traditional startup or even a crypto startup? Investing in new digital currency projects is very accessible. Some might say it’s too easy, so you have to be really careful when using these products. There are a lot of fake new projects in this industry, so make sure you do your research before you lose money trying to build one.
On the other hand, raising capital for yourself can be easier using crowdfunding tools compared to a traditional financial environment. “Using crowdfunding tools is a new way for founders to raise money. It’s attractive to founders who don’t have connections to investors, angels or venture capitalists,” Meta explained. For example, in Silicon Valley, raising money through cold emails can be a challenge and often requires a relationship with an investor. When you consider the barriers and obstacles to meeting investors without a pre-existing network, in addition to the legal paperwork piled up on course papers, navigating the world of venture capital can be a pain in the ass. So many founders are looking to crowdfunding as an alternative to venture capital or in addition to it.
Metta World Peace understands how important crowdsourcing startups are to the future of Web2 as they enter Web3. Since his unofficial retirement in 2017, Meta has shifted his focus to the entrepreneurship and technology industries, where he is an investor as well as a spokesperson for several startups and small businesses.
For example, Orbiiit Technology is a company in Meta’s portfolio where he was an early investor. The company launched a virtual pitch called “The Pitch”, which officially launched in late October 2022 and ended on November 28, 2022. The race is on to find the up-and-coming unicorn startup founder. Meta participates in this competition as a startup judge.
Think Shark Tank – but online. Startups compete to win capital and non-cash prizes to help them grow their businesses without losing any value. Meta judges the competition alongside Nader Nawabi, founder of Orbiiit. Together, they will evaluate the top 10 finalists, who will be selected through a public online voting process. The first place winner will receive $25,000 in cash and a one-on-one Zoom coaching session with Metta and the investment committee.
However, not everyone can raise funds or compete on “The Pitch” – so savings and investments can be the way to go.
2. Savings and investment
Many new entrepreneurs start after saving, investing, and then starting when their nest egg is ready to hatch. “You want to have an income stream as soon as possible,” says Meta to progress. Being strategic about the career or side hustles you choose can also put you on the right track to achieving your entrepreneurial goals.
Let’s say you are building a coffee company. Work at Starbucks to learn their systems, so you can earn money with a day job. If you want to start a fintech app, get a job in VC, start mail room. Do whatever you have to do to learn something that can impact your company in a meaningful way.” He continued, “Do it while gradually saving money for financing. “You are your own business, because the more you run your company, the more equity you can keep and improve your business.”
Meta says you always need extra money to survive. Selling digital goods is one way to make passive income to finance a startup, for example, let’s say you sell original IP or profit from secondary sales with a small purchase. And Upsell “You can also save on payroll by paying your employees in shares, tokens, or even NFTs in addition to cash.” Finally, if you’re sitting on digital assets, you can invest your money by locking them up in decentralized financial platforms for profit – but remember to be very careful about the platforms you choose, as this is a very risky option. Is.
3. Making connections
“Making connections helps founders raise money,” Meta says. “If you don’t have the connections, it’s going to be hard for you to get the seed capital you need. Web3 gives platforms the opportunity to decentralize the way they raise money.”
We live in an intensely social world. With so many opportunities, if you stay active and do your best to learn more, you can easily make the right connections. The most common way founders raise money when they don’t have a relationship with investors is to get investors and advisors who do. For example, in an insular society like Silicon Valley, it’s less about how many people you know and more about who you know. If you know the right people in venture capital, you can still know a few people, those relationships can go a long way. Bringing in a consultant who can make vetted introductions is a common way to plan field meetings. Give a consultant a small equity stake and they will work long and hard to open up their network to help secure valuable meetings.
Even if the investor accepts, you can always follow up and ask the investor to refer another investor friend they think might be a better fit. Always research an investor’s portfolio of startups so you can check the themes, sectors and stage of co-investment with the investor’s existing portfolio and what motivates them to invest. Also, remember to keep the dollar value range within your normal check size because they are more likely to pass if it is outside of their normal range.
It’s still early. Good ideas flourish. If you have innovative concepts in mind but don’t know how to integrate them into the traditional market, it may be time to start as an entrepreneur. Who knows, maybe Metta World Peace will invest in your company?