pam on Nostr: Hey Will, An alternative option is to look at equity funding, by selling your shares ...

Hey Will,

An alternative option is to look at equity funding, by selling your shares to your users, instead of a VC.

This is called equity crowdfunding. Say you need to raise $1M in exchange for 20% . Reach out to 100 users who can put in $10k each for a fraction of your company. You will create a new company for this.

* Company A remains as Damus - funded by grants.
Damus is a people attracting magnet. 100% open source. No Ads. No VCs.

* Company B - Here, you can create a separate entity purely for the business/productivity suite or a valuable “other stuff” that the market needs. Single/dual class share. This will have equity investors, starting with the 100 angels for seed investment.

**Under company B**

1. Open source at least 50% , until you can build the branding and market penetration. It will eventually become 100% open source

2. Outsource marketing and design as separate cluster entities (like how design is independent - this could work the same for PR, for marketing).

Its a modular technique - what it does is, it removes a lot of operating expenses esp at early stages and your gross will be closer to net profit - this is a massive investor attraction.

3. Work with your 100 investors - for every person your investor brings into your productivity suite, investors earn sales commission on top of the investment returns.

Early investors who are your users and fans of Damus will be very interested in making this business profitable. Imagine having 100 sales arms if you get 100 investors.

4. You need to work on branding, strategy and growth. After a while, maybe in a year, whether it is patented or open source will become irrelevant (99% of the time) once branding picks up. This is the same everywhere, all the time.

5. The $1M fund is your seed funds. Company B can eventually fund raise Series A through VCs if you want to, because you will have strong revenue. Your 100 investors can sell their shares at higher value or remain.

Most importantly, Damus is standalone - undisturbed - no center point of failure. Maybe Damus purple can have exclusive access to certain things that other people can’t have in company B etc

That's one possibility

There are many ways and many solutions, let your creativity go wild. You are a smart guy. You can even create some form of smart contract for these types of investment, gather investor input etc, it will be another new innovation for you.

The options are endless. Problems = solutions = opportunity.

** Some thoughts :

1. No matter what you build, make sure the market wants it. You can spend shit loads of effort building it and it will go nowhere if market doesn't want it.

2. Identify target market - where are you going to find the first 100 users for your new innovation ? First 1000 users?

3. Open source entrepreneurship is diff from traditional entrepreneurship.

If you can make open source entrepreneurship work successfully, then you would be a pioneer who has set up an open source entrepreneurship network.

** On a personal note,

1. Passive aggressiveness is a put off. Channel your good people energy in attracting people, not dividing them

2. jack (npub1sg6…f63m) is the good guy. He welcomed you to his home, he funded the initiative, he has supported you from the get go, he has been here lifting everyone up. I hope you didn't burn the bridge entirely and can still make amends.

3. You can take the pisser on Miljan over his VC funding. Someone else can take a pisser on you on your first mover advantage. Negativity breeds negativity. OR - You can build solutions that can solve your problems and everyone else's problems


** On an additional note

I did a brief cap table for you . If you raise $1M for 20%, your company post valuation would be 5M, assuming 1.5 years is a good enough time to develop, sell, get user feedback, rinse and repeat until product is a bit stable.

And once you raise in 1.5 years at series A, your 100 investors could see a 9x return.

https://docs.google.com/spreadsheets/d/1bsouYOU1quGIDxdi6TGX-rVPZfBIzbQTNKz0eaifIgk/edit

I hope this helps you move forward and on a positive path.

Good luck