[Rant] Mistake that new crypto projects make

[steve5946]

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 summary

This 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 overview

This 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 analysis

Since 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 funds

It’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 requests

Down to what your project needs. How much do you need? Mention it here.

Other relevant information

Do 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.

[Davidvictorson]

I think that some crypto projects fail because that is how they are designed from the onset. They were never designed to lasted. They were designed such that once the founders make a lot of money, it crashes. Some crypto projects have no inherent value, purpose or goal. Imagine a celebrity creating a crypto project because it is the trending thing.

[Vod]

Here is a good recent example.  Person wants $150K for something that can be done for 1/10th.  When confronted, they eventually call me a liar and leave me negative trust.  :/

What will these funds be used for?
•      Creation of a company whose purpose is managing the crypto farm and investment activities (October-November)
•      Creation of company's identity (November-January)
•   Hiring a specialist or company as a legal advisor (October)
•   Legal support for the creation and operation of the company (October-November)
•   Business trips for that members of our team who are currently not in Ukraine to countries where the crypto farm locations are situated (October-January)
•   Business meetings with investment funds and private investors (October-January)
•   Attending leading crypto conferences (October-January)
•   Legal and technical inspections of the locations (November-January)
•   Payment for services provided by contractors:
        1.   Consultations with electricity suppliers
        2.   Consultations and development of the technical specifications for the crypto farm location
        3.   Brokerage services for location search (engagement fee)
        4.   Consultations on spot electricity trading and the FRR market
        5.   Development of a Heat Recapture Technology plan (possibility of selling the heat)
        6.   Consultations and work with government representatives regarding permits for the crypto farm's operations

OP - this is a welcome idea.  A community curated list of best practices would help.

[Etranger]

Here is a good recent example.  Person wants $150K for something that can be done for 1/10th.  When confronted, they eventually call me a liar and leave me negative trust.  :/

Who is "they"? I am actually one person.

It is not for you to decide whether my project can or cannot be implemented for 1/10th. This is what you still don't understand. Considering that you have nothing to do with my investments, I don't get why you keep saying that my project can be done on your proposed budget, when you haven't even bothered to figure out where the money is going. I don't care about the rates in your jurisdiction. And the ones that I do care about, you obviously don't have any idea of.

Show exactly, where I called you a liar. I told about unfounded accusations and ignoring of arguments. Moreover, it was you, who called me scammer several times without no proof. Not to mention leaving me negative trust more than one, especially after publicly declaring that you would remove it.

I don't understand at all why my project is mentioned in this topic. My only mistake was the endless attempts to explain and convey something to you. But in other respects, my project is developing perfectly well.

[steve5946]

I think that some crypto projects fail because that is how they are designed from the onset. They were never designed to lasted. They were designed such that once the founders make a lot of money, it crashes. Some crypto projects have no inherent value, purpose or goal. Imagine a celebrity creating a crypto project because it is the trending thing.

This might just be it for some crypto projects because they don't exist for more than a year and then everyone disappears. Afterward, you'll see investors ranting about their funds...

[steve5946]

Here is a good recent example.  Person wants $150K for something that can be done for 1/10th.  When confronted, they eventually call me a liar and leave me negative trust.  :/

What will these funds be used for?
•      Creation of a company whose purpose is managing the crypto farm and investment activities (October-November)
•      Creation of company's identity (November-January)
•   Hiring a specialist or company as a legal advisor (October)

OP - this is a welcome idea.  A community curated list of best practices would help.

Yes, the community-curated list of best practices would help. You might be surprised by the number of investors here who like to throw around money unnecessarily without doing what is needed to evaluate a project before investing. Therefore, losing their money in the worst way possible. A lot of this can be seen in the scam accusation thread.

About the quoted project, I had to quickly navigate and read the thread, however, one thing I noticed is just a general problem on the proposal thread. The OP there didn't tender the proposal in a detailed manner. For instance, as you indicated earlier in the thread, there's no information about him or the team that will be handling the project. Another issue is that the OP is not calm enough to digest people's complaints and criticism which is rampant in any business. For some reason, he's triggered by those and while trying to defend himself, he wrongfully approached the whole thing and made things worse. Don't get me wrong, this issue might not affect the OP's ability to run his project successfully...

However, it certainly will determine how he will treat his investors in the future if things go wrong. Even professional entrepreneur takes complaints and criticism

[Etranger]

About the quoted project, I had to quickly navigate and read the thread, however, one thing I noticed is just a general problem on the proposal thread. The OP there didn't tender the proposal in a detailed manner. For instance, as you indicated earlier in the thread, there's no information about him or the team that will be handling the project. Another issue is that the OP is not calm enough to digest people's complaints and criticism which is rampant in any business. For some reason, he's triggered by those and while trying to defend himself, he wrongfully approached the whole thing and made things worse. Don't get me wrong, this issue might not affect the OP's ability to run his project successfully...

However, it certainly will determine how he will treat his investors in the future if things go wrong. Even professional entrepreneur takes complaints and criticism

I have no problem accepting criticism. But this criticism must be justified, constructive and rational. And what was in my discussion thread were bare accusations, someone's subjective assumptions and guesses. Which did not help me see the possible shortcomings of my project (and I do not deny that they may exist), but it did shit on the idea itself and the approach to its implementation.

At the same time, those facts that did not stick to these fictitious accusations were completely ignored. For example, the fact that DrBeer met with me, saw me in person, talked to me and a member of my team, and expressed his opinion on the forum after that. A very convenient position for those who are not used to dialogue, but are used to simply throwing mud at others for some incomprehensible personal purposes, hiding behind the protection of the interests of non-existent investors here on the forum, none of whom expressed any readiness, or even potential, to consider my proposal. Therefore, it is still a mystery who is there to be protected by Vod in this way.

But all this does not matter anymore, because I realized that there is no point in trying to attract investments here on the forum.

[Vod]

I have no problem accepting criticism. But this criticism must be justified, constructive and rational.

You wanted to borrow $150,000.  You said you have personal funds coming in next year that would enable you to repay the loan if it didn't make a return.  Once you prove  this, I'll remove the negative trust,  

Does anyone else think that is irrational and unjustified?

But all this does not matter anymore, because I realized that there is no point in trying to attract investments here on the forum.

Hopefully you care about your reputation and want to fix it regardless. 

[Etranger]

I have no problem accepting criticism. But this criticism must be justified, constructive and rational.

You wanted to borrow $150,000.  You said you have personal funds coming in next year that would enable you to repay the loan if it didn't make a return.  Once you prove  this, I'll remove the negative trust,  

Does anyone else think that is irrational and unjustified?

But all this does not matter anymore, because I realized that there is no point in trying to attract investments here on the forum.

Hopefully you care about your reputation and want to fix it regardless.  

What exactly do I have to prove to you in public? You are not my investor, so I am not giving you a financial report. Moreover, no one has invested in my project, and therefore I am not going to give public information about my finances. And I am not as stupid as you probably think, to disclose this data to those with whom I have no relationship at all, especially investor relations.

 Moreover, the point of confirming the words that I will have such an amount available would be if someone expressed real interest and willingness to invest. Then I would provide all the necessary evidence personally to the potential investor.

 And in this case, you are suggesting (but in fact blackmailing) me to disclose information about my finances without any potential benefit for myself just so that you remove the tag? I think that a public demonstration that someone has 150 thousand dollars in their account is definitely not equivalent to removing an unfounded crazy red tag. How do I even know what your intentions are in this matter? What guarantee do I have that you are not a scammer who will try to take these funds knowing that I have them? Or that someone else who is sitting on the forum and reading this information is not a scammer?

 You see, all your suspicions about me are much more relevant to you. At least I did not require potential investors to display their funds publicly, so that anyone and everyone would have access to this confidential information.

P.S. Thank God, my reputation does not directly correlate with your view of the situation. Just look at the positive reviews that other users leave me.

[Vod]

What exactly do I have to prove to you in public?

Just prove to everyone you have $173,000 in your pocket and you weren't trying to scam us.   Then everything is forgotten (from my end, your neg trust on me can remain).

To address your fears - you can provide a signed message from the address holding the crypto.  It will be safe from me. 

The whole crypto farm project requires $40,000,000. However, these funds are not directly connected to the first-stage investment. Even if we won't succeed in securing money for the main investment, we will pay $150,000 + 15% back from our own pocket. I mean, that paying back the initial investment of $150,000 + 15% doesn't depend on the next investment stage.

_________________________________________

P.S. Thank God, my reputation does not directly correlate with your view of the situation. Just look at the positive reviews that other users leave me.

Everyone has positive reviews until they scam.    

[Etranger]

Everyone has positive reviews until they scam.    

Even you, I believe

Hopefully you care about your reputation and want to fix it regardless. 

I see that you don’t care about your reputation at all, considering the numerous negative feedback you have. And I don’t see any attempts to get rid of it from your side. At least, of my tag.

[Vod]

Everyone has positive reviews until they scam.    

Even you, I believe

Yes, I am part of everyone.   If I ever try to borrow a large amount of money without any proof of what I claim, I expect to be labelled a scammer.

I care about my reputation, but I can't control the feedback scammers leave me.  My parting advice to you is, don't lie.  :/

[examplens]

I have no problem accepting criticism. 

Honestly, I didn't get the impression that you accept any criticism. The only difference is that some users like Vod or DireWolfM14, insisted on further discussion with you, which eventually escalated into an argument. You certainly did not try to make the whole discussion constructive, but you concentrated exclusively on defending the project and the offer you presented. There is no 100% ideally planned project in the draft phase, and you presented it so persistently.
I don't want to restart or discuss this whole thing, I'm just stating my conclusion that you had too rigid an attitude.

[DireWolfM14]

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.
~
I think it’s important to desist from spending money on unnecessary things at the early stage of every project.
~
Furthermore, don’t use investors' money to solve your personal problem

These points you make highlight all the mistakes made by an individual who recently made a proposal to start a mining farm.  

What’s the best way to solve this?

As an investor, your money will mean far more to you than it will to the others involved.  You're the one who made risks and sacrifices to earn that money, the others will just see you as a bottomless pit of wealth that they can siphon funds from without end.

Let's use Elon Musk as an example; When he started Tesla he had no experience in mechanical engineering, electrical engineering, or any of the traditional skills required to manufacture cars.  If a group of these engineers had come to him and requested money to start up an electric car company before having done any legitimate legwork to get started, he would have laughed at them.  If he saw their proposal as a potential success, he would have made an alternate offer instead; hire them to help him start his own car company.  That way he's still managing his own expenses, overseeing the progress, and constantly assessing the risk involved in continuing the project.  Yes, it's more work, but far less risk and far more reward.

[Etranger]

There is no 100% ideally planned project in the draft phase, and you presented it so persistently.
I don't want to restart or discuss this whole thing, I'm just stating my conclusion that you had too rigid an attitude.

Of course, I will defend the project with all my might and I will do it persistently. Because if the author does not defend his ideas and plans, then how is he going to defend the interests of the investor in such a project? A normal, adequate investor would 100% ask a question if those who offer him an idea for investment would give up at the first opportunity and would not be able to defend their own interests or the investor's. Another question is who to build such a defense in front of. I will repeat once again that there was no criticism. There was mudslinging based on nothing at all. What I agree with is that it is time for me to calm down and just stop trying to convey something to those who are not at all inclined to listen.

[Vod]

What I agree with is that it is time for me to calm down and just stop trying to convey something to those who are not at all inclined to listen.

Words are nothing.  You can prove you have personal funds to repay the loan AS YOU SAID or else you intended to scam.    It's not rocket science, and you shouldn't bring down other users with you.

[cryptskii]

I think that some crypto projects fail because that is how they are designed from the onset. They were never designed to lasted. They were designed such that once the founders make a lot of money, it crashes. Some crypto projects have no inherent value, purpose or goal. Imagine a celebrity creating a crypto project because it is the trending thing.

.


 this is it. you hit the head of the nail here

[Etranger]

Words are nothing.  You can prove you have personal funds to repay the loan AS YOU SAID or else you intended to scam.

Proving I have personal funds to repay the loan would be logical and necessary if there was a loan at all. Since the loan doesn't exist, I don't have to prove anything to anyone, because there was neither the fact of the loan (the investment, actually, you just don't see the difference in these phenomena), nor the scam, which you love to talk about so much. So the demonstration of my personal finances is exclusively my personal business. If you are not able to understand this, and it is much easier for you to explain things that are incomprehensible to you only by scam, then I can't do anything about it. Live in your false paradigm further.

you shouldn't bring down other users with you.

How exactly am I bringing down other users? Nobody even cares about this whole situation, except for me. Moreover, I have no idea why you think I'm down. Perhaps this is also part of the understanding inherent in your life paradigm. But thankfully not all people are there with you.

[coin-investor]

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.

That is why I have reservations or second thoughts about investing in projects being offered without first presenting projects that the team developed in the past; they have to show their capability and character first.

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.

Lack of responsibility, they can just pull the plug or do an exit scam. If you funded it with your own money, you will save every penny and try to make it work. its better for investors to just invest in a working model than just a blueprint.

[Vod]

Proving I have personal funds to repay the loan would be logical and necessary if there was a loan at all. Since the loan doesn't exist, I don't have to prove anything to anyone

Got it.   We should not believe anything you or your team writes from now on.   You will only prove it after someone gives an anonymous person irreversible currency.  

"Hello Mr. Banker, I want a home reno loan for $100,000.
Banker - "Can I see the deed to your house"?
"Why?  You haven't given me any money"

Edit:  Since you won't show this was not a scam, I will remove that condition on the trust.  I don't want to give anyone the impression you are working to prove anything you wrote.