How Cost and Time Inefficiencies Impact Your Fundraising Journey

Startups are very much familiar with the challenging and, at times, painful nature of fundraising — both in the traditional as well as in the Web3 sector. The process is full of steps that lead to inefficient allocation of either capital or time, slowing down the growth of a project and hindering its success.

Founders’ Fundraising Woes

Amongst the many obstacles that have to be overcome to successfully raise funds are, for example, regulatory uncertainties (e.g. regarding KYC/AML adherence) or the handling of sale contracts and token distributions. These incur operational costs and require substantial administrative efforts. The team needs to conduct direct sales outreach instead of being able to focus on driving the core business or technology forward. The timeline for securing funding through such channels (VCs, professional & private investors, …) is also often uncertain, which makes planning difficult.

Current conventional and mostly centralized fundraising services in Web3 lack transparency and have a high entry barrier. Due to common conditions these services impose on projects, such as upfront payments. Additionally, these intermediaries frequently require a token fee, which is then often immediately sold — extracting as much rent as possible without benefiting the community directly.

For founders, on the other hand, this process creates lots of additional uncertainties — what is the path forward in the case of an unsuccessful raise? How should the additional risk of the intermediary failing (which, in the worst case, could result in a ruinous loss of raised funds) be dealt with? Where does the money for the upfront payment come from?

Fundraising Needs a Revamp

Polimec addresses these issues and creates programmatic certainty and efficiency wherever possible. For example, fees are only charged by the Polimec protocol if a raise is successful — there are no upfront payments. The fee is also based on the amount raised, and 100% of it is returned to the ecosystem through incentivization of the platform, to the benefit of the entire community.

The whole process, from fundraising to token issuance, is also fully transparent, automated and happens with a predictable and efficient schedule — the maximum time for the entire process is set at 45 days. Projects also profit from exposure to the Polimec community and receive feedback from evaluators. It is then up to the team how much to engage in the discourse and how much internal resources to spend on further community-building efforts, returning the choice of how to efficiently allocate capital and time to the project.

Figure 1: Funding process on Polimec. More info in our whitepaper.

A Transparent and Collaborative Alternative

The current ways of fundraising are inefficient and come with many problems for teams. Polimec offers a transparent, largely automated and thus highly efficient alternative way of raising funds — all while providing easier regulatory compliance and more certainty for founders in terms of costs and timeline. Consistent with our values, Polimec returns all fees back to the community instead of extracting rent, creating a truly collaborative environment.