how it works

Please note these answers are not final, as Investibles is very much a work in progress at the moment. But since the home page raises more questions than it answers, we thought it might help to clarify some things.

About Investibles:

Q: So what is the product?
We are building a platform to help legitimate startups to raise funds so they can build their businesses, using NFTs as the underlying technology. “Kickstarter for startups on steroids” is one way to summarise it.

Q: Why NFTs?
Because this technology enables the bundling together of a lot of interesting value drivers. We believe this makes Investibles fundraising superior to other existing forms of fundraising (angels, VCs, crowdfunding, FFF, debt…).

Q: Why fundraising for startups?
NFTs have primarily been used for three things so far: art, collectibles and fundraising. The global digital art marketplace has been a great success of NFTs, and digital collectibles are growing in popularity. But on the fundraising side, in part because of lack of regulatory clarity, most “NFT Projects” have effectively operated as hype-driven ponzi schemes, without a clear product, or a clear link between the value of the NFT and the success of the product. We think that this is a huge missed opportunity. Startup fundraising is broken in a lot of different ways, and NFT Projects, with all their flaws, have shown that people have a huge appetite to invest in small businesses globally.

We need NFTs that are designed to be good investments. Enter: Investibles.

Q: What does the Investibles process look like, compared to the typical “NFT project”?
Unlike typical “NFT Projects”, every startup selling Investibles will clearly outline what their product and business plan is, and will be regulated appropriately to be able to attach real equity participation in the business to each Investible.

Q: What does the process of investing look like, compared to a typical startup investment?
Investibles have much better liquidity than startup shares. Typically, startup shares are locked up until exit, except under rare circumstances. Investibles are much more liquid (depending on market conditions).

Regulation-related questions:

Q: How do you deal with SEC regulation?
At present, Investibles will not be available to US citizens, residents of the US, and residents of China. This will be verified via a KYC process.

Q: So how is this regulated, then?
We will be working initially with German regulators. Thanks to EU passporting, this enables our products to be sold across the EU. Investibles will not be marketed outside the EU.

Q: Will marketplaces list these NFTs?
We don’t know which current marketplaces will support Investibles and which won’t. Eventually, we will also build our own marketplace, which will be tailored to trading Investibles.

Q: Will Investibles ever be available to US persons?
We hope so. Once we have raised our own funding, we will allocate a portion of it to pursuing regulatory clearance in the US. We hope this process might take 12-24 months.

Q: Will there be any KYC?
Yes. In order to be compliant with regulations we do need a minimum of KYC. Specifically, we need to make the best effort we can to ensure that no residents or citizens of the US and China purchase Investibles.

Technology Questions

Q: What technology are you using?
Investibles will initially be distributed on a Ethereum L1. The mint will be managed by a smart contract making as much of the process trustless as possible, though initial “proof of concept” campaigns may require some trust. It will also involve a KYC step.

Q: How will smart contracts support this process?
Eventually, the smart contracts will ensure that until at least the first milestone of an Investibles campaign is reached, the money remains in the smart contract. If that milestone is not reached within the timelines of the fundraise, the money is automatically refunded. Initially this process may be operated manually.

Q: Why are you pricing in USDC rather than Eth?
Most people in the world understand USD and don’t understand Eth. We will monitor the evolution of currencies to select an appropriate currency if this changes.

Startup-related questions

Q: What are your criteria for listing a startup?
This will change over time, but for now we are primarily looking for startups that have a community angle, and a tangible product that we believe fulfils a real need, and one or more founders capable of pitching their startup convincingly.

Q: Do you curate the startups in any way?
At this point, there is a lot of working closely with the startup to structure the token offering. So there are two levels of curation. Firstly, there is a kind of self-curation, where if the startup is not willing or able to put in the work to launch their campaign, then they will of course not be launching.

Secondly, as we work closely with the founders, we also use our judgement and if we get a sense that something is wrong with that startup or its founders, we would not allow them to launch an Investible campaign with us.

That being said, we cannot guarantee that the startups are being entirely truthful in everything they say, and you should use your own judgement, and the available communications channels, to make up your own mind before investing.

Q: Can you guarantee that the startups will not “rug”?
That is not possible. However, as long as we are curating the startups, we can confirm that the founders are real, identified people, that we’ve spoken to on video and/or met multiple times, with a real incorporated business (whose details are disclosed on the pitch page). As a team, we also have a lot of experience of the startup space and will only work with people who we believe are founders who are passionate to build a product. In our experience, few real founders “rug”. That being said, many startups do fail, but there is a difference between rugging and failing.

Q: How can I reassure myself about these founders?
As long as we can manage it, we will make sure each token launched includes an in-depth, “hard questions” interview with the founders, where we will ask the sort of questions people should be asking of founders before investing. The founders will get the questions in advance, but if they fail to answer questions the interviewer will keep pushing for an answer. We encourage you to watch the video before investing and make up your own mind as to whether the founder is trustworthy.

Typically, you will also be able to join a Discord and ask questions directly. Our suggestion is not to invest in a founder unwilling to answer questions clearly and helpfully.

Ultimately, it needs to be up to you whether you believe this startup is worth investing in in this format, based on factors like the business’s prospects, the founders, the valuation, the market, the product, etc.

Q: How can I get better at making that sort of decision?
There’s no quick way, but like anything else, immersing yourself in the topic will help. The founders of Investibles each have over a decade of experience in startups, both founding startups and investing in them. This is probably the best way to get better at making startup investment decisions.

Once we have the capacity, we will put together educational materials to help people become better at selecting startup investments. For now, I would recommend starting with Paul Graham’s essays.

It’s worth remembering that in this kind of field, there is never a set formula, so there’s always a risk of getting it wrong.

I have more questions!

Hop into our Discord and we’ll do our best to answer!