There has been a lot of talk in recent months regarding the role of cryptocurrency for the future of crowdfunding and equity creation. A new company is taking a different, and seemingly more widespread approach to cryptoequity and community funding of early stage projects and business ventures. This new platform, called Swarm, is co-founded by Joel Dietz, a former California native who now resides in Berlin. Swarm is the world’s first distributed incubator, and uses technology built on Bitcoin to allow startups to raise money through launching their own coin.
This platform is providing a novel way to invest in innovation without the large barrier to entry of conventional funding methods. Holders of Swarm’s own coin (SwarmCoin) will receive a percentage of these new coins as a reward for their support of the Swarm community. This means by investing in Swarm you will be rewarded with additional coins from successful campaigns. This allows for higher returns and a faster path to the market. By far, Swarm’s capability to create a platform that utilizes Bitcoin as a technology and means of funding may have monumental implications on the future of equity investments.
As we are witnessing, crowdfunding plays a large role in the future success of startups. Many larger platforms were starting to reach equity funding, but following guidelines was challenging. It seems however that Dietz and the team at Swarm have responded to this challenge and are in the midst of something that has never been seen throughout the industry. “Swarm came together in my mind. I was aware of crowdfunding for a long time. Initially, I was involved with early Kickstarter and unconventional funding campaigns, and until Ethereum, I never really thought of the further uses of Bitcoin technology, but it clicked. What we are doing has huge potential and can change the industry and spark change from the bottom up,” Dietz stated.
The crowdfunding model is unlike current accelerator models used today, which are fixed in one location and profit only a few partners. Instead, every person who owns a SwarmCoin will get a portion of every coin launched throughout the network. Users will also be incentivized to try out and seek additional projects that are associated with each coin. Starting on June 17th, Swarm will make 100 million SwarmCoin in a limited-time crowd sale, which runs until July 20th.
Phase One consists of 4,000 bitcoin and people participating on day one will receive 5,250 SwarmCoin per bitcoin. As more bitcoins are received, the number of SwarmCoin distributed will decrease to 4,750 until the end of Phase One. After a short period, Phase Two will be aiming at 17,000 bitcoins with a conversion rate of 4,250 SwarmCoin, decreasing to 3,750 per bitcoin until all are gone. This will all be done to meet Swarm’s projected 18-month expenses, including developing the core infrastructure and usability to allow the creation of new coins. With a full raise of 21,500 BTC, Swarm will be a true incubator, not only with infrastructure but to help get projects and new coins off the ground.
Dietz commented, “This whole idea of having your own token that can appreciate in value is monumental. Existing crowdfunding platforms could use the technology of Bitcoin, but they aren’t focused on that. There is obvious friction that exists in early stage investing, including having to be an accredited investor or owning a legal entity. With Swarm, users don’t need to have a legal entity and they can fund all sorts of open source software projects without the red tape. Not just crypto companies but companies in all industries.”
Swarm is focused on hitting their goals and launching a platform that allows for crowd sales throughout the Bitcoin community, which is something many have been seeking out. After its initial funding period, Swarm believes that there will be a large amount of projects that will be focused on decentralized and open-source funding. We are in the mere starting stages of what the future holds for the crowdfunding and cryptoequity industry. The challenge that many face is matching the ease of use with the correct due diligence, something that Swarm believes they are doing today. Platforms like Swarm acknowledge the problems that have happened in the space, is solving them and bringing with it massive potential.
“There is a lot of organizational infrastructure that can be put together for it to be successful. With Bitcoin and the Blockchain, we can build the groundwork for emerging companies and projects and help them be successful,” said Dietz.
For more information, check out Swarm.