pam on Nostr: Perhaps, let’s establish some common grounds first. ** On funding : 1. Grants are ...

Perhaps, let’s establish some common grounds first.

** On funding :

1. Grants are technically for development purposes to encourage the building part of the business. It is with hope that after you build, you find other funding means or you can take off the business independently.

2. Loans - there are two types - Business loans are what you take when your businesses are generating stable revenue. Personal loans are the riskiest as early stage business has high failure rates, you don’t have income and you gamble everything.

3. Equity - you are selling company stock for money, with the assumption that you can generate returns. You can sell your stock to anyone who believes this business has potential.

Traditionally, there’s angels as pre-seed / seed stage, VCs at seed/series A,B and PEs from Series B until IPO. Equity crowdfunding sometimes falls under pre-seed or seed stage depending on who is investing in you.

There are diff interest of investors - those who want to expand the business quick and fast and those who prefer slow and steady, with profit sharing revenue,

** On selection at early stages :

Typically stuff like EBITDA / DCF / CCF / PTA can be thrown out of the window for early stages. The Early-stage evaluations are normally based on :

1. Founders - industry expertise, creativity, ability to think out of the box, integrity.

2. Business potentials - market size and opportunity, business model, competitive landscape.

3. Traction - based on how you are able to acquire customers.

** On startup stages

1. Pre-seed - brings an idea to life. You might do rapid or native prototyping to test the receptiveness of the market on your innovation. Often, you might do several iterations to find a fit.

Most devs are at this stage now, and build something with the assumption that it is awesome, do not test the market, and get frustrated when it doesn't pick up.

2. Seed stage - this is when you create something more solid like an MVP after a little test on the market. Good time to apply for grants as you will need some time creating a better product and testing market more in depth. This is when you officially launch it.

3. Series A onwards is exploring market deeply and penetrating other markets

** Now that we have established that, you need to ask yourself a few questions :

1. Does your product work ? Not functionally but in the market i.e - How many people have you used it on to bring into Nostr ? 1000? 10,0000? How long did it take you to engage them ? Who are there and where are they from ?

2. If your product can be monetised in order to generate revenue, then you can attract equity investors.

3. Alternatively you can create a revenue sharing model where you don’t need investors but you can attract people to generate and earn income - the more people participate, it becomes an attraction factor to get more people in. And serves your end goal of bringing people into Nostr.

4. Are you building something out of goodwill /non profit /no touch of capitalism that purely benefits the people? then you need to get funds out of goodwill from opensats or people like Jack who don’t expect you to repay.

5. Can your product be easily leveraged as a simple app / interface by clients? This will determine your product value. It doesn’t matter if it's open source or not, the purpose of your product and traction is what makes a difference.

6. How can you grow your product ? This question is really important. Can you partner up with clients that attracts specific communities for example like Coracle who works closely with Christian community + local business community or other clients that serves diff purposes / market? Can you expand it into local meet-ups based on interest ? a dating platform ? nostr nest hangout sessions ?


You won't find the answers to these questions overnight or in a week. You will have to test the market, find ways for your product to reach people wherever they are, and go through many iterations.


On a diff note, I wrote more on equity crowdfunding here and have brief example of cap table, income statement if you want to read more.

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Hope this helps. All the best. Keep going!