Blockchain Based Equity Crowdfunding
EQ Token will be a new method of equity crowdfunding that will allow even the smallest investor to get equity in return for their investment.
All investment applications on EQ Token website will need to offer up a portion of their business for a specified amount of money. If successfully funded, tokens will be created for this business. These tokens will be evenly distributed among investors based on investment size. Holding these tokens in your digital cryptocurrency wallet will allow us to send you shares of company profits. You will also have the chance to sell your tokens at any time on our own token exchange.
The 2 main aims of EQ Token are to:
- Give start-ups and existing businesses the opportunity to quickly raise money in exchange for equity.
- Give investors of any size the ability to be equity stakeholders in a company.
Currently blockchain is seen mainly as a platform for cryptocurrencies.
EQ Token plans to use the Ethereum blockchain for what it was intended:
As a public, blockchain-based distributed computing platform and operating system featuring smart contract functionality.
This basically means we will be using Ethereum as a world computer. It will be used as an investment platform and as a way of tracking equity ownership in specific companies.
Why Blockchain?
So, why would raising money using blockchain be any better than the current methods?
- Fees – Current methods of crowdfunding have quite high fees. This is due to the fact that the crowdfunding companies are rarely able to handle the financial transactions themselves and often have to pay third parties for this service. Using cryptocurrencies, we will be able to easily handle all transactions ourselves, passing on financial savings to our customers.
- Equity – The majority of crowdfunding companies cannot offer equity in return for investment as it is just too hard to track exactly who owns what and to easily sell shares. Using Ethereum smart contracts we can easily divide up a 20% portion in a company into billions of small shares that can be traced back to individual Ethereum wallets to allow sharing of profits (dividends) or selling of tokens.
- Ownership – From day 1 of the token creation for a new project, you have 100% ownership of your tokens. You can send them to whoever you want, trade them for whatever you want or else even store them in an offline location to keep them safe. This type of freedom and ownership only comes wit blockchain.
Current Options
Some of the current main crowdfunding options on the market right now are all listed below with their main strengths and weaknesses.
One of our biggest selling points is the fact that we can offer equity to investors. There are
a couple of alternatives currently on the market that can also offer equity. These are listed below:
Crowdcube is one of the few equity crowdfunding websites out there today but they take 1.5% of any investment you make as well as 8% of the total amount invested. Crowdcube does not share dividends or allow you to easily sell your equity whenever you want. Equity is only paid when the company is sold or goes public.
Seedrs is another equity crowdfunding website which charges fees of 7.5%. Seedrs does allow the paying of dividends but will charge 7.5% on these payments. Seedrs allows selling of shares to other investors but you will need to pair up with somebody on the Seedrs website to transfer your equity.
Fees
We will charge a registration fee for every project of $200-$300. This is to review each project, evaluate businesses and give the project a risk rating.
- We will charge a 4% fee on every fully funded project.
- We will own 3% of the tokens from every project.
- We will charge a 2% fee on all dividends.
- We will charge a 0.25% fee on any trading of tokens on our website.
The above means that if a project has raised $200,000, the business raising money will receive $192,000 and the investors will receive a share of 97,000,000 tokens. This method of taking fees will share the burden, on more well-known crowdfunding websites, the funding received by the business would be under $185,000.
Projections
My projections for the first 12 months after launch is that we will raise a total of $4m for businesses, meaning that our revenue from this year would be $160,000.
EQ20 Token
The EQ20 token will be an ERC20 token. This token will be used to raise money to allow EQ Token to get started. A total of 70m tokens will be offered in the initial exchange offering for a price of $0.05/token. The 3% of all tokens created through fully funded projects belong to us so these tokens will be evenly airdropped to all EQ20 token holders. A standard project will be created with 100m tokens. We will own 3m of these tokens and so these will be airdropped to all EQ20 holders. This means that for every 10,000 EQ20 tokens ($500) you buy, you will receive 300 tokens from every fully funded project that we ever create so investors in EQ20 will own a stake in every company the EQ Token business ever helps fund. Ever!
These tokens can then be sold on our decentralised exchange at any time or they can be kept in your wallet so that any funded company that starts to become successful, will start to pay dividends directly into your wallet!
We also plan to airdrop 25% of the 2% dividend fee to EQ20 token holders as well!
Funded Projects
Every project listed on our website will need to pay a $200-$300 administration fee to list the project. This fee is to cover an initial review of the project to allow us to give it a basic risk/reward score. Each project will offer up an initial % of their business in return for a specific sum of money.
Any investments in projects will be held by us until the project is fully funded. If the project does not reach it’s target in the agreed upon timeframe, all investments will be returned. If a project reaches its funding goal, we will keep the funds until all legal checks/agreements have been completed. The funds will then be traded in exchange for the agreed upon % of the company. The token will then be created and distributed to all investors.
When the company gets to a stage where they able to take profits, they will send the % of profit owed to their token holders to us and we will be able to distribute this amount evenly among all token holders. If the company is ever sold, the portion of the sale owed to token holders will be sent to us and we will distribute this evenly among all token holders.
We may also bring out a voting feature to allow token holders to vote on any major company decisions. For example if token holders own 20% of a company and there is a major shareholder vote, we can have all token holders vote. If 35% of token holders vote yes, 50% of token holders vote no and the rest didn’t vote, then this can be relayed back to the company as 7% of our 20% share voted yes, 10% voted no and 3% abstained from the vote. This will then be taken into account with the votes of the other 80% equity owners in the business. This feature should be introduced in year 3.
Token-sale
The EQ20 token will be used to raise funds to help get EQ Token started. There will be 70m tokens sold in total in the EQ Token initial exchange offering for a price of $0.05 per token to help raise $3.5m.
The token sale will last for 30 days and our minimum target is to sell 35m tokens. If we do not reach our minimum token sale target within the timeframe, all funds will be returned to investors.
1m EQ20 tokens will be used for promotional purposes to help increase awareness of EQ Token and what we plan to accomplish (mostly through social media competitions).
There will be 4m EQ20 tokens that will be used to reward participants in our bounty program. These tokens will be paid 1-2 months after the successful completion of the IEO.
The remaining 25m tokens will be kept by the core development team and may be used to pay external contractors.
EQ-Token IEO
We have decided that it is best for the EQ-Token project, to hold 2 separate IEO's for the 2 separate stages of the project.
Stage 1 IEO:
This is a small scale IEO that we will be running for our early investors to get tokens at a discounted price. We will be selling 1.2m EQ20 tokens at a price of $0.04/token. Our minimum cap will be 600k EQ20 tokens sold.
This IEO will be running from 11th March - 11th April on McAfeeDex. If anybody is having any issues using McAfeeDex, please check out the below guide or get in touch with us on our telegram group.
Make sure to get your tokens quick, there will be a very limited supply for the first exchange offering and the price increases by 50% for the main stage 2 IEO soon after.
Stage 2 IEO:
This will be our main IEO and it will take place shortly after the completion of our first IEO. We will be selling 60m tokens at a price of $0.06/token. We will be listing these tokens on one of the more well known crytpo exchanges but we are unable to announce it at this time as we are currently negotiating with several exchanges.
Conclusion
In conclusion, I believe that blockchain is going to be the future of investing. EQ Token is in the unique position to be one of the very first equity crowdfunding platforms based on blockchain.
The benefits of using blockchain over current crowdfunding methods are:
- Lower fees
- We are our own payments service
- 100% control of your equity tokens
- Equity in return for any sized investment
Crowdfunding and blockchain are both relatively new concepts, both with exponentially growing markets. The combination of both could and will re-shape the world economy.
You don’t want to be sitting 5 years down the line looking at the EQ20 price of >$10/token knowing you could have bought in at the ground floor for $0.05/ token.
For More The Information
author : herlambang18
eth : 0x0a9977835a0902DD302B8DFE2aCe96EB6E135751
author : herlambang18
eth : 0x0a9977835a0902DD302B8DFE2aCe96EB6E135751
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