Three pain points in our economy
Except for public offerings by mature companies, existing channels for financing and investment are bound to “bilateral” deal flow: repetitive deal attempts take place with each new potential partner. The higher the degree of repetition, the costlier it is to scale up in deal search — it essentially precludes optimal fundraiser–investor matching. Likewise, the lack of a market mechanism for price discovery has led to an abundance of over-valued and under-valued deals.
The marginal cost in scaling up deal search leads companies to accept “ok” deals rather than getting the best ones. Imbalances in these costs across geographies and industries magnify imbalances in access. Beyond access, many valuable aspects of a firm’s operations have been absent in financing. Flexibility in financing and investment is regrettably low.
Well-structured, strong governance systems that align the interests among fundraisers and investors hardly extend beyond the stock market. Similarly, the structuring and fulfillment of the terms of investment are usually impromptu. There lacks a parameterized system that averts misunderstandings, mishandlings, and misfortunes. Fundraisers and investors frequently walk into deals that they do not fully understand and whose outcomes they cannot fully predict.
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We present an innovative solution
New asset classes & flexibility
We extend the marketplace format to financing and investment in general with the help of distributed ledger technology. Rent-generating exotic assets and physically-delivered product futures are two new classes of real-world assets that we support. They make possible a number of investment and business model innovations.
Discovery & matching
We integrate intelligent and adaptive search & filtering functions found in leading e-commerce platforms. They greatly facilitate navigation, comparison, and decision-making. Better fundraiser–investor matching becomes a reality.
Fulfillment of investment terms
Fundraisers that have presold products will deliver them physically to investors post maturity. Those that have auctioned off exotic assets, shares, or bonds will distribute rents, dividends, or coupons respectively.
Auction method & optimal price discovery
With our unique auction method, inputs from all participating investors together determine the final price of the tokens. By design, this market mechanism ensures correct valuation. The price discovered through this process is also the one that the secondary market is ready to support.
For the fundraiser, the marginal cost of an additional investor is zero. For the investor, the marginal cost of exploring an additional asset is also largely eliminated. Consequently, investors have much better odds of building a balanced portfolio of assets that they understand and are interested in. Fundraisers, too, experience a welcoming boost in their matching with investors.
Exchange & liquidity
Several levers on IdeaFeX help maximize liquidity: (1) Superior fundraiser–investor matching means buying interest is more likely to be captured into buying actions. (2) One-stop monitoring of fulfillment saves time for investors, so they have more energy for trading. (3) Our exchange offers a safe and compliant environment conducive for investment. (4) The IdeaFeX token has features that boost active use.
Safety & compliance
We protect fundraisers and investors from criminals and manipulators who would profit at the expense of honest users. Further, we ensure full compliance for all asset classes that we offer and all jurisdictions that we support. Users never have to worry about regulatory uncertainties.
How do we stack up?
As easy to use as e-commerce
Online marketplaces have largely transformed shopping. Non-linear, adaptive cateogries & filters, peer reviews, and AI-guided recommendations make navigating through large quantities of products easy and enjoyable. IdeaFeX extends the e-marketplace formula to tokenized assets. We thereby make asset management, procurement, & investment easier to navigate.
Far broader audience than crowdfunding
Our high accessibility may remind one of crowdfunding; however, we offer much higher flexibility and serve a much broader audience. On IdeaFeX, sellers need not be startups, and the goods need not be consumer products — meanwhile, buyers need not be the end consumers. Live trading further broadens the set of opportunities.
Sharing features of commodities futures
Thanks to developments in distributed ledger technology, we can offer features of commodities futures to physical products in general. Corporate investors can leverage product futures as part of their supply chain management, and the producers can draw benefits such as smoother cash flow, reduced exposure to price volatility, and prevention from unpaid invoices.
More agile than specialty markets
Specialty markets exist for some exotic assets such as wines and collectible art. Startups in the blockchain community, often not-for-profit, are developing specialty protocols for goods & services, too. IdeaFeX is a versatile & agile marketplace: We allow sellers to leverage these specialty protocols to enrich the whole process.
An alternative to stocks & bonds
By giving growth and mature companies the option to presell products and/or to rent out their unused capacities and services, IdeaFeX empowers them in sourcing funds without dilution and/or the need to go public.
Off-chain value rarely found in ICOs
All goods & services on the IdeaFeX marketplace have tangible off-chain value unassociated with blockchain. In other words, we use the distributed ledger technology as a tool to enhance the flow of resources; buyers are not purchasing the use of these technologies — they are already enjoying them!