I’m going to keep this short but I want to make a few points and probably hear the thoughts of other entrepreneurs here who’ve had successful investments before.
So, we’ve worked, invested, and partnered with a couple of crypto projects here, and at times, these projects may end up mismanaging funds — leading to everything going to waste.
In most cases, I noticed that new project owners fail to manage funds properly because it’s investors' money and they didn't work to earn it, therefore they spend it extravagantly.
Ways I think this can be solved:To me, I think it’s important to desist from spending money on unnecessary things at the early stage of every project. If possible cut down staff as low as possible until your project starts to show positivity.
Furthermore, don’t use investors' money to solve your personal problem: I’ve seen countless times and these project owners do this because there are not enough documents for investors to take legal action when the business fails. So, if you’re an investor, make sure that you have a strong contract to take the startup owner to court if they mismanage your investment. Also, stay up to date with the developmental process of the project.
Lastly, know everything about the project you are investing in and who you are sending money to. This will help you in case of future issues.
What’s the best way to solve this?
Update:
So, since a lot of people often make mistakes when trying to request financial assistance from investors here. I’ve taken some time to draft a proposal before which will help them explain what their business is all about and why someone should invest in it.
Also, you must have tried to or acquired a loan from the bank to kickstart your project before requesting money from investors here. This will show how committed you're to pushing your project forward.
Who are you?This section is very important especially when you are asking money to finance your project. Who are you and your team?
Have you or your team done any projects in the past? If yes, explain it all. Show evidence here.
Are any of your team members or people you have worked with before available on this forum? Mentioned them here.
The proposal summaryThis is the section where you’ll need to tell us about your project.
Have you been working on the project already or is it just an idea you’re currently fantasizing about?
If you have already been working on the project, what is your progress so far? Show evidence here…
Why did you create the project or want to create it In the first place?
How do you think your project will benefit the people?
Any hope for monetizing your project? If you are already monetizing your project, how much have you made so far from it?
Business overviewThis is another important section because you’ll need to explain how you intend to run your project.
If you are already running the project, how are you doing it currently? How many staff do you have currently… Show evidence here with the allocation of pay your current staff members receive. If any of your staff members have a share in your project, explain.
What is the goal of your project? Here, we will need to see the road map of your project explaining what you have already achieved and intend to achieve in the future.
Market analysisSince the market conditions always affect each project differently, we will need to hear your thoughts on how you’ll utilize the good/bad market conditions to the advantage of your project.
Is there any measure already in place for this? Explain in detail…
Financial projections/Use of fundsIt’s one thing to request for money but another thing to utilize it properly. If you receive the money you need, what are you going to do with it?
How much do you intend to make with the money you are requesting and what are you offering investors in return? Share in your project? Collateral? Return percentage from generated revenue?
If you are asking for a loan, when will you pay it back? What’s the percentage of interest can you handle?
This section is very important, make an effort and convince us of what you intend to do with the money. If possible add evidence to support your claim.
Funding requestsDown to what your project needs. How much do you need? Mention it here.
Other relevant informationDo you have other things to add that might increase your chances of getting the funding you need? Mention it here.
If there's anything I'm missing, anyone can let me know and I'll add it.
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