These Entrepreneurs Are Out to Tackle Startup Funding With the Blockchain
Bringing a new platform to democratize startup funding with a blockchain solution
PHOTO CREDIT: Getty Images
Matthew Lally and Jonahan Foltz know a little something about how hard it can be to acquire funding for a startup .
Lally, an immigrant from the UK, founded a mobile marketing company that struggled for funding and was shortly after acquired for eight figures. Foltz, a nomadic serial entrepreneur" who's sat at the helm of a whopping 20 companies, has experienced firsthand the exclusivity of traditional funding approaches, which are available to only a select few would-be entrepreneurs.
Together they founded PITCH, which aim to transform the way startups raise capital and make funding and exposure more available to entrepreneurs the world over. Here's how they are making it happen.
Kickstarter Meets Shark Tank--with a Twist
You've heard of Kickstarter--the crowdfunding platform that helped democratize the world of funding by enabling entrepreneurs to pitch directly to consumers and earn their financial support. You've also heard of Shark Tank--the wildly popular TV show on which contestants try to convince industry titans to invest in their ideas.
Put those two ideas together, and you start to understand what's happening with Pitch Investors Live.
The platform enables entrepreneurs to pitch their ideas to a live audience of accredited investors who are able to ask questions, just as they would on Shark Tank. Meanwhile, the audience can ask questions and even buy tokens from the presenting entrepreneurs. Everyday people can watch these pitches and participate in crowdfunding, just as they can on Kickstarter.
"We want people to go on our app and at every single minute, there's somebody pitching somebody else their idea from anywhere in the world," says Foltz. "This is gonna create a huge community."
While other funding models have also forged new communities, there's one thing that distinguishes PITCH from existing crowdfunding platforms or VC funding approaches: All financial exchanges happen on the blockchain. The audience for each pitch will be able to purchase PITCH tokens that let them buy tokens from an existing project.
"These tokens are used by many different entrepreneurs to come up with these really innovative ideas--and they're decentralized," says Lally. "We're not gonna be able to tell people who can and cannot go up to pitch. You go to Silicon Valley, people are picking and choosing. With Pitch, it's the community."
To date, the iOS app has attracted more than 1,000 startups and entrepreneurs who are ready to pitch their ideas and seek funding through the platform. Meanwhile, PITCH's team has grown rapidly from just a few individuals to a team of nearly 40.
The company plans to build on this momentum with the launch of a limited time token sale, which started on Feb. 28th 2018, and which they hope will bring in up to $30 million. Future plans include developing enhancements to their existing app, decentralizing the platform on the blockchain, bringing on celebrities, and bringing together more bright minds. The goal is to have a beta version out within eight months of the token sale's launch and a fully working model within a year.
A Funding Platform for the Future
"I'm a futurist," says Foltz. "One of the things that I see is that there's these cryptocurrencies creating a token economy. Blockchain is much bigger than just Bitcoin."
These cryptocurrencies are growing at exponential rates. This year alone, says Foltz, token launches and token sales are expected to raise over $20 billion. Citing that the $20 billion is an underestimate (That's relative to $4 billion in 2017 and less than $300 million in 2016.)
The way Lally sees it, the token economy is going to permanently change the entrepreneurial, economic, and social landscape.
"We believe we're entering into a brand new type of society," says Lally. "I really believe that this is the most exciting technology to hit our planet since the internet." Just like the internet before it, Lally predicts the blockchain is going to change the way businesses manage information and transform the entire economy by disrupting the current reliance on third parties for all transactions.
It also makes entrepreneurship more accessible on a global scale. Because it's based on the blockchain, PITCH provides the opportunity for equal access to funding and equal exposure--no matter whether an entrepreneur is based in a remote village or Silicon Valley. And because the app won't control which pitches rise to the top (instead leaving those decisions up to its audience), it ensures unbiased opportunities for entrepreneurs of all stripes.
Foltz is acutely aware of the revolutionary potential for this model. "Let's say for example there is a child in a third-world country," he says. "I can actually send money to his bitcoin wallet (an address that acting as a digital bank). Twenty dollars to him is an incredible amount of money--[and sending it] is almost instantaneous. There's no other method of payment that would even allow that to happen."