Regular Launchpads serve two purposes: handle user verifications and transfer purchased assets. You’d expect a plain output, but these platforms have a UX issue, thanks to regulatory and accessibility challenges.
In terms of regulation, regular launchpads have little to no influence on how founders set valuations. As a result, founders can raise at an insanely high valuation before even delivering any working prototype. The most telling effect is poor performance after launch and losses for the investor. This was the case with the 2017 ICO boom and many other ICOs, IDOs, and IEOs that followed it.
In addition, regional restrictions and high investment minimums limit retail participation in fundraisers.
Internet capital markets attempt to resolve the limitations of seed investing by reducing known overheads: accessibility and regulation.
For a better understanding of the Internet Capital Market, imagine Nasdaq and Y-Combinator, but then fully permissionless. Activities like project listings, funding contributions, and management of funds generated through fundraisers are handled on-chain.
Internet Capital Markets leverage funding models that decide if a project’s fundamentals are even reasonable enough to be funded. This way, it creates responsible founders. Founders that raise via ICMs can only access the money they got from fundraisers in phases; each phase is defined by specific deliverables that the team must satisfy.
The model is synergized with smart contracts that handle tokenization, custody of funds, and a data management and verification layer for record-keeping, ensuring that every process runs smoothly.
If Internet Capital Markets work as expected, a functional ICM platform allows anyone to own a share of new high-potential projects with very low capital and significantly regulates the fundraising structure for intended launches.
By lowering the barrier to asset issuance and ownership, Internet capital markets open a trove of liquidity and innovation. And this is particularly important for the next stage of crypto and blockchain adoption.
So why is this even a big deal when it's just another set of launchpads with more ‘gimmicks’?
