June 12th, 2019
Investment opportunities in the market are on the rise with several IPO releases in 2019. Already, existing current players include Uber, Lyft, Pinterest, as well as Beyond Meat. Other promising companies rumored to offer shares to the public within the year include WeWork, AirBnb, and Slack.
The offers sound like a great investment opportunity for the community as they allow people to hold shares in a company they probably know little about. However, these tech startups come with the challenge of enriching the inner circle (rich venture capital investors and private fund managers) and not the young investors. The long-term effect is that the rich become even richer as the young investors struggle with the peanut profits. Bitcoin vs other tech startups advantage is the main focus.
Why Bitcoin is a Democratic Startup
Looking at the traditional investment startup model, it works just fine but it comes with the downside that a few persons benefit heavily. Withbitcoin, the risk of investment applies equally across the table for every investor. Entrepreneur Naval Ravikantin an incisive tweet says:
“The most valuable startup of the last decade didn’t raise money, didn’t have employees, gave away the cap table, and let anyone invest.”
He insists that when a startup needs to raise funds and employ several employees, part of the profits from an investment does not trickle down to the investors. What is left of the investment also finds its way to the major shareholders by a large margin. Also, the government places huddles making it difficult to invest as startups unless they are accredited investors. The accredited are normally the filthy rich in the market. As such, the startup investment favors the elite.
For example, Uber’s investors include some famous people including Jeff Bezos and Chris Sacca. They managed to turn their investment to $700 million and $2 million respectively by the time the stock IPOed.
Bitcoin transparency on the other hand was open to everyone on a level playing field. In addition, governments or financial bodies cannot control the market. Bitcoin founder gave away the equity in the project ensuring that every team player benefits equally depending on his or her investment. This is in contrast to other startups that enrich the founder first.
In the past, tech companies offered shares to the public only after they were profitable. Investors were only willing to invest where they were sure of making returns. Recently, companies are offering IPO investment even when they are struggling financially. A recent example is that of Lyft. The company offered an IPO price listing of $87 and after a short period, it dropped gradually to $58.
The ordinary investor loses financially after shouldering high risk without any certainty of financial recovery. The inner circle remains rich after bagging their returns during the IPO release. In the previous year, the trend remained similar with just two companies out of fifteen making profit as compared to the IPO price offer per share.
Raising the argument, that generating profits from bitcoin is questionable as compared to making major losses from other tech startups. It is a concern that institutions and companies such as Uber and Lyft, which shun bitcoin are not making profits for their investors.
The success of bitcoin
Currently, bitcoin has provided value for investment as compared to other recent tech startups. It aims to apply the aspect of democracy by letting everyone in, including the ordinary person, and it is not limited to operations by facilities such as governments or bankers. Bitcoin seeks to offer a level field playground for all its shareholders.
This disclaimer informs readers that the views, thoughts, and opinions expressed in the text/sponsored content belong solely to the author, and not necessarily to Bitcoin of America, organization, committee or other group or individual. All investments are at your own risk and should be done after careful research.