One of the major costs of running a technology company is the hosting costs that include:
- Machine Hardware
- Server hosting
- Email service
- Database hosting
- Security Infrastructure
- High Availability
and many more
There are other costs as well viz. marketing expenditure, employee salaries, etc. Hosting costs can especially kill a growing startup company if they are not able to raise capital quickly enough. Startups can crowdfund, but the process is prolonged. Given the strong ledger capabilities blockchain brings, startup companies can issue shares of the companies to whoever is willing to foot the expenditure bills such as hosting costs.
Every month interested investors can pay part of the hardware costs and in return, get the equivalent shares issued to them at the current valuation. All the transactions will be captured in the blockchain. The process will be quick and effortless.
Startups are not leveraging blockchain to issue shares to fund themselves
Design a service using blockchain that lets investors put money in startups and get equity in return.
[Image Credit: https://techiescoops.com/initial-coin-offering-guide/]