How To Raise Money (With No Debt) And Still Own 100% Of Your Company

While traditional methods to raise capital have been used for centuries, many are starting to see major issues with these systems and are looking for alternative ways to raise capital without giving up ownership or taking on unnecessary levels of risk. This is where INX steps in. It offers a digital securities platform that allows entrepreneurs to raise capital through the use of the blockchain. Many believe that this could be the start of a new way to raise capital. 

Traditional Capital Raising

In the traditional method of raising capital, both debt and equity markets can be accessed. However, both forms of traditional capital raising raise issues.

When raising capital using equity, the major issue is that you give up ownership of the company. This process usually involves selling shares, or small pieces of the company, in exchange for capital. Partial ownership gives investors the ability to make decisions and earn the company's profits. Additionally, the process of selling the shares, sometimes through an initial public offering (IPO), is often an expensive process as it must be done through an investment bank. The process also carries the risk of the investment bank being unable to sell all the shares and leading to a failed IPO that ultimately backfires on the company.

Raising capital with debt comes with its own set of issues. For starters, you will owe the capital lender more than what you are taking out in the form of interest. If you fail to make these payments, then the lender has the right to seize the business. While raising capital with debt allows you to keep ownership, it also comes with high levels of risk, particular in the form of default. 

Capital Raising with INX 

INX is a cryptocurrency and digital securities platform. It offers services for both investors and institutions. INX offers a complete, ‘nose to tail’ solution to public and private companies seeking to raise capital and list digital securities on the only digital securities ATS that is open 24/7/365. One such digital security allows for the tokenization of assets, such as businesses, allowing a business to be funded using the sale of tokens.

These tokens can represent a variety of things, ranging from direct ownership to a profit-sharing mechanism. For example, INX released its own digital security in July 2021 which helped it raise over $84 million. The tokens that it sold represented ownership of 40% of the operating cash flows of the company. The capital-raising process with INX allows for lots of choices concerning what is given up when capital is raised.

Additionally, INX follows U.S. security law and has a legal team in place to help ensure a smooth issuance of tokens. Additionally, it is an SEC-registered broker-dealer and FINRA member. 

By using the blockchain, INX also avoids all intermediaries such as banks but still maintains all checks and balances. This aspect not only allows for a more streamlined process with much more direct access to investors but also helps issuers avoid hefty fees encountered along the way. It also makes a profit- or revenue-sharing initiatives much smoother and more cost-effective, as issuers can send funds directly to all token holders. 

How to Raise Capital with INX

Now that you have a basic understanding of traditional methods of raising capital and INX’s blockchain innovation in raising capital, you may be interested in checking it out for yourself. Fortunately, the process is straightforward, and the INX team is ready to help every step of the way.

Once legal documents have been prepared and approved, the INX securities team will work with you directly to help select a smart contract that will automate processes, such as profit sharing. After this, the asset will be listed and anyone on the INX platform can begin trading it.

Overall, INX is hoping to change the way businesses and individuals raise capital. Its innovative process could bring about a new wave of economic and technological growth as it smooths connections between ideas and investors. Through a simple and efficient process, INX is looking to change the way people invest and raise capital. 

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