DTube Fundraising’s experience with VCs (and our next move…)

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Hello Steemians,

Many people already knew about it, we’ve been working hard since last August and managing a fundraising campaign! On this post, we will give you a feedback about our experience with raising funds the “good old way”, i.e selling corporate equity to Venture Capitalists.

Why raising funds?

First question obviously is what was the purpose of raising funds while we have the support from @ned from SteemIt Inc with a 2 Million Steem Power delegation.

Well, two reasons:

  • First we anticipated from the beginning of the year 2018 that the investor’s frenzy on crypto markets, creating a rocket powered increase in market value for Steem (and all other cryptos) would not last forever. In the current bear markets, our income is very small as we only take small beneficiary rewards and never use the votes to ‘pay’ our employees.
  • Secondly, we have been looking for a corporate bank account, in order to be able to pay for services in fiat. And guess what? This is almost impossible for us.

Below is just one of several examples. We got in touch with a bank from California who openly accepts to manage bank accounts for crypto businesses. Below their reply:



1 Million US Dollars to “due diligence”, are you serious ??

Why not ICO?

We never wanted to ICO because we’ve always wanted to deliver a product first, then establish a clear development plan and then look for financing options. DTube’s journey to success is a long one and we should not rush.

By respect to our community, we really did not want to associate DTube project to token events that had been generally used for scams or short term profits. All ICOs weren’t bad of course, but it was our take.
Secondly, a social distribution model like steem doesn’t really fit financial market investors classic expectations. In fact, anyone holding tokens in such a model needs to “play the game” to protect and hopefully increase their stake. Investors aren’t used to playing social games.

However, we really like the idea of an Airdrop. In DTubes case, it would make sense as we already have a strong user base. In addition, one of DTube’s main goals is to operate fair value distribution to all its users. That means we would prefer not to alter the distribution right from the start by selling utility tokens to wealthy individuals who will hence hold large voting power.

That said, airdropping is necessary to bootstrap a DTube economy but wont directly help the venture to fund its development.

Our experience with VCs

So there the hard stuff starts. @heimindanger and @macron have been on so many expeditions, events, pitches, due diligences, 5mins pitches, 10mins pitches, 10mins Q&A. In the US, in Switzerland, in London, in Paris:

  • Accelerators: Crypto Valley Association (Zug), YCombinator (San Francisco), Chain Accelerator (Paris)
  • Generalist VCs: Thiel Capital, Global Founders Capital, Serena Capital, Isai Capital, XAnge, Kima Ventures,
  • VCs specialized in Blockchain: KR1, Outlier Ventures, SVK Crypto, NKB Group, Fabric Ventures, EOS Global, Polychain Capital, Blue Yard Capital, PROFounders Capital, Trecento Blockchain Capital, Federman Capital

Finally, we went through the whole due diligence process with Blockchain Valley Ventures in Zurich but ultimately without success.

Why it didn’t work (yet…)

It is very important to understand a few things about VCs:

FIRST is difficult: the hardest part is to convince the first investor, then it gets much easier to lever the FOMO feeling with the others.

LEAD ROUND: When it is the first time a venture looks to raise funds by selling corporate equity, investors who want to invest need to “lead the round”. That means they will have to align enough resources to go through a full due diligence process to gain enough confidence in the fundamentals of the project and ultimately provide with a full YES. Even though most VCs say they do lead rounds, in reality a very small portion of VCs actually have the resources and the expertise to go through it.

SECTOR: some VCs are sector agnostic (largest ones in general), but most of them are focused on a sector. There is no use targeting the wrong guys.

INVESTMENT THESIS: All VCs have their own assessment of the stage and the state of a market. They will invest only in projects that fit in.

So what is in VCs minds about DApps ?
First, I recommend not to waste time pitching to investors who have not yet done any investment in blockchain related businesses. We did a lot, but it feels very much like talking to a brick wall.

Secondly, you should get information on which VCs are really leading a seed round investment, all others will source your project but won’t ever take the steps to invest in your project.

Finally, specialized VCs in the blockchain space have, for almost 90% of them, an investment thesis focused on “infrastructure” as they name it. That is they are seeking to invest in projects that set the grounds for the future decentralized web: blockchains, protocols, infrastructures, core low-layer technologies.

For most of them, the time for DApps has not come yet

I actually came to realize that these people didn’t know much about Steem and all its ecosystem. They were very impressed while discovering there were more than 400 DApps running on STEEM, that DTube has more than X daily unique visitors, etc. Even the biggest platform listing DApps, https://dappradar.com/, doesn’t even have a proper section for STEEM!

There are too few people talking about our community outside the Steem ecosystem!

OUR NEXT MOVE

In spite of our lack of funds, we decided to still go ahead and turn DTube into what we want it to be. It’s finally time to introduce our new team members:

@steeminator is in charge of community relations since early 2018 and will lead social media management
@macron joined the team in March 2018 to lead business development and fundraising (he also wrote this article)
@mercussio joined last month to head marketing
@hetmasteen will be helping on structuring acquisition strategy and project coordination
@albanlaurent is a designer, he is working on a new version for the DTube logo

We are still looking for more team members, for the following positions:

  • UI / UX: DTube will go through a major redesign of all UIs (web + official mobile apps)
  • Desktop app developer: we need a developer to work on our future desktop app to help creators manage their uploads and increase decentralization of file storage
  • Social networks and community relations: we will claim accounts and need influencers to help us spread the good word and design marketing collateral

If you are skilled, have free time, and are willing to work for a free and open source project, please either send an application to jobs@d.tube or contact us on discord.gg/dtube

In the next few months, we plan to launch DTube’s mobile apps and drastically evolve DTube’s core features (more about that soon).

On the fundraising side, after this experience with VCs, we are assessing the opportunity to launch a token generation event. We still are considering multiple options: Airdrop with private sale, STO, IEO, donation, crowdfunding, etc... We are talking to various specialists in the field but the most important for us is to hear the take of our community, so please give us your opinion in the comments!


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You've made the Steemit Minute for today! Congrats!

Check out the Video Here: https://steemit.com/dtube/@reseller/x5supu2n

Hi all. @dtube. My email is ij@steemcreators.com and discord @steemcafe#9459. We have experience in the fundraising side for Blockchain. Comes down to value proposition to all sides of the business equation.
"What is in it for them?". You all are seriously looking for funding & exposure contact me. This is our site for our upcoming event. Look at the line up. Over $1,000,000,000 USD in assets in the room. Investors, v.c., angels, private equity firms, and investment pools. April 10-13th Austin TX. https://globalblockbuilders.com

Take care.
I.J. @steemcafe.

Posted using Partiko Android

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Way to Go Huskie! :)

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Hugs & High 5's 🙂

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Hi @steemcafe thanks for your comment, I'll send you an email soon

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Cool.

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I would be interested to learn about DTube's business model. For example, how do you plan to generate revenue?

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The plan is in 2 steps
1-Create adoption for the cryptocurrency with the social blockchain model
2- Create utility for the token with in-platform paying video services (VOD, pay per view, merchandising, etc.) and with external commercial parterships (like e-commerce)

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how about ads?

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Yeah ads at some point would be interesting. We are thinking about making it "fair" though for the users and creators. I believe actually that community moderation will provide more security to advertisers than automated moderation

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Would be great to speak to you about some of these ideas Macron. I've got a new, less intrusive way to deliver advertising in video and can be leveraged to align with the tokens as well. Here is a quick demo link for you to experience:

logobar.tv/whole-foods-d-tube/

We are already compatible with your video player, and creators could easily make LogoBars with our configurator tool to promote their merchandise or if approached by advertisers directly. Look forward to connecting!

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DTube isn't even owned by anyone. How did the Linux/gnu generate revenue. This isn't a typical business. D.tube is a centralized front end at the end of the day and dtube is a platform. Two different worlds. Ask yourself how bitcoin brings in revenue. I guess some people only care about money .but I know some of us want to change the world. Let's do it together

Actually @dtube not fair with it users , @dtube vote to just specific users and looks like they are friends , if you guys fair with your users you will at least show your support as upvote for let's say many users with less % than their friends as i see , plus because of @dtube they upvote for some users and those users depends on dtube votes and when they see that @dtube keep upvoting them many times they don't upvote others to support them or they don't make relationship with steem blockchain users , they care about money and @dtube give it to them so they don't care about support others while they get what they want , about @steemit what i like from them is they don't upvote to any users or let's say they don't support specific users and that's kind of fair , so my opinion is dtube MUST not upvote to anyone if they can't make it fair between it users , without @dtube upvotes there will be fair like what @steemit do

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Power up steem and launch your own front end. No own owns dtube

Great insights on fundraising options and pitching Steem to potential investors! I hope the Steem Business Alliance @steemba is listening :-)

Banks and crypto are not working very well together yet :-)
I'd recommend you to not open a bank account as 'crypto business' (i made that mistake, too, first), but rather as a business that's operating online. From a legal perspective (at least here in Europe) you're effectively an internet startup that offers services on the internet. You can use services such as https://www.opennode.co/ in order to turn crypto income into fiat then.

Can't wait to personally talk with you guys about selling and marketing Steem in May at the @dtube.forum :-) Is the whole team planning to come to Barcelona?

Have a great day and keep on rockin'.

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I'll be in Barcelona probably as it's pretty close to home, I dont know about others who are further from it.

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This spam is courtesy of @fulltimegeek! A real piece of shit who flags manual curation projects like @themacurator because he's a spiteful cunt!!!

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This spam is courtesy of @fulltimegeek! A real piece of shit who flags manual curation projects like @themacurator because he's a spiteful cunt!!!

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Hi, thanks for the support here! Actually the problem with banks are not around opening a corporate bank account but more receiving significant Fiat amounts transfers from crypto exchanges (those get blocked).
I'll talk to @steemba, thanks!

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Yeah, I made the same experience with those transactions. Since the new money laundering laws were enacted it’s even more complicated.

Maybe you just need to build your own bank ;)

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Bitgold baby!

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They’re based in Canada, right? Does that work for us Europeans?

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Definitely I like the idea of having a bank license. Apparently Malta facilitates that, but not for now... ;)

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Good work guys, I know it must be difficult explaining our value to a brick wall but as you said we only need one to give us the time of day!

Thank you for the update 🙏

We Will Get There Together!
#OneLoveDTube

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I would not mind an Airdrop ;-) 1 SP/Steem = 1 Dtube token?

Do you have any preliminary ideas on the usecases and tokenomics of Dtube tokens?

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Yes we're currently working on the tokenomics design. We'll keep you posted

I'm just glad you didn't decline payment for this post. Every cent counts! :P
Super Excited for this new journey.
Best Wishes <3

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Yep it gets powered up and ends up increasing our vote strength !

Awesome updates you guys have, I am glad you are here! As long as I can post my Steem Monsters content I am happy as it is the BEST Game on the STEEM blockchain! :-)
Flesh Golem (853px, 5fps).gif

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excellent update. I wish more apps would publish updates like this. Its fantastic to know about your staff, what your plans are and the work you have done looking for funding . Keep it up, you will succeed

love dtube, lately im posting more and more videos to you guys. even did one few minutes ago ;)

Here you go...we can say Steem not dying slowly...looking forward for some of the open position...and desperately looking forward for the mobile version....Steem on

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Hey @macron & @dtube. First of all great communication from your side with the whole community. I think I speak for all of us that we appreciate you addressing the current state straight forward. I have the feeling the whole team is pulling on one side and this will result in success. And you are right, you have a powerful, hustling, full of creativity community standing close behind you. Looking forward to more and just as @surfermarly said, hopefully most of the team will come to Barcelona for more interesting talks. Greetings from Barcelona

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As a simple content-creating layperson (not a marketing investment professional), what does this post mean? How does it affect me, and why was it forced onto my feed even though I've unfollowed @dtube a dozen times?

Thanks for posting this in text form rather than video, so that it can still be accessed after 3 or 4 weeks.

Nice communication from u guys :) So you've been to all those events to try to get some investors onboard? And not even one got interested enough? Hmmm..

Anyway, wish you luck with finding the right people, I myself am also a developer but fresh out of college and TBH I wouldnt trust myself to take such a huge responsibility of bein a main dev (architect) for such a huge part of the project :D I'll just keep collecting exp in work + some other open-source and maybe I'll get back to you later, once confident enough haha :D

Till then, wish you luck and can't wait for the desktop/mobile client :) Thanks for giving us such amazing platform..

Also, wondering what the new logo will be like...I remember when Dlive was working on new logo, they actually left STEEM haha :D Hope it's not the case here :D

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This spam is courtesy of @fulltimegeek! A real piece of shit who flags manual curation projects like @themadcurator because he's a spiteful cunt!!!

Thanks for the updates, DTube team.

Steem, as a content monetization platform, is kinda unlike other crypto projects in space, DPOS in general I guess. I can imaging getting VCs onboard can be a difficult task atm. Good luck!

Looking forward to see the mobile app and other further updates.
All the best!

Can't wait for the mobile apps! Keep on Rocking!

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Yes!! So happy to hear from you guys. I was worried because development of DTube seemed so stagnant. Havent heard this kind of update in a while. Im happy to hear that you are updating the UI and creating a mobile app.

How about an airdrop based on how many rewards each person earned on DTube? 😁

If you guys ever want to create merchandise in China, let me know and Ill help yall out. @KenanQHD on Twitter.

Take care.

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Good news for dtubers...!!!
How interesting it is!!!
Chears.....!!!
Keep it up...!!!

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1 million USD. 😂
Im not sure who i hate more. Centralized exchanges or banks. Damn parasites.

Concerning VCs. What are you pitching them? Does dtube have a monetization plan beyond curation?

If im being honest getting funding for dtube will be really hard, bordering imposible.
I just dont see where the hook is right now for investors.

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You're right, classic VC find it hard to see where the value lies.
There are many different visions from investors and developers about tokenized business models.
Our is quite simple: Social blockchain is the most powerful way to create adoption for a coin by rewarding users for their valuable social interactions. Then you can create value for your token holders with in-app services for viewers & fans (vod, ppview, subscription, merch shop) and through partnership with ecommerce (and even brick and mortar!). Just take a look at projects like BAT or Sweatcoin, it works!

‘We still are considering multiple options: Airdrop with private sale, STO, IEO, donation, crowdfunding, etc... ‘
I kinda like the Airdrop with private sale idea.
But whatever you choose, you will have an investment from me.
I resonate with this direct and transparent approach.
That your main concern is a good working product ...to me is plain ol’ admirable.
Thanks Dtube team.

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Many interesting points in this post, perhaps the most exciting for me personally is 'In the next few months, we plan to launch DTube’s mobile apps and drastically evolve DTube’s core features (more about that soon).'

Was the 'appS' just a typo or is there more than one app in the makings? Maybe an app for creators? :D

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Android + Apple iPhone

I think the VCs are right, it is too early for Dapps. It's impossible to have a Dapp with millions of users today.

I think dtube should focus on surviving the bear market with only incremental improvements/cheap projects.

Once the markets rises again and the hype comes, VCs will invest eagerly and for a much better valuation.

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It's impossible to have a Dapp with millions of users today.
Why ? Because it's never been done before ?

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No, because people are not used to using cryptos, exchanges, investing in digital money, etc etc...

People have to get a lot more comfortable with cryptocurrencies. When they are not comfortable they can't have fun and use a dapp. Of course for some of us it's alright, we enjoy new things, but most people, unfortunately, they don't.

The only exception is in bull runs and bubbles, when the hype is extreme. This is why I said it would be better to wait for the next bubble.

Anyway good luck with everything, I love Dtube and really root for you guys. If rapid expansion is the way you choose, then I hope it goes well for you!

I just would like to see the option "show NSFW" NOT switching off every page refresh.

I just wanna say thank you to the team for the continued dedication to your creation. I really enjoy dtube, wish I could do some of the work that needs to be done but I have not the skills but I shall do what I can to support dtube in my own way. Blessing to the team.

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Thanks for the interesting discussion and exposition regarding VCs. Looking forward to seeing more as development continues.

You simply open a corp account, or Ldt type account; I have done so many times with Schwab and many others. They really have no business, and do not care what your business is.. software engineering consulting.

Hey @dtube and @macron , @heimindanger I'm ready to contribute as an influencer, would you like to give an opportunity to me? . I have good connections on Instagram and facebook

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Hi @freecrypto sure! you can contact @mercussio or @steeminator on discord ! Thanks for the support

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Thanks a lot for letting me know, I will get in touch with them 😊, Thanks a lot sir :)

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I am already a user of @dtube app... Really like that..If any kind of help regarding social media network , i will be there...

Excellent post with a lot of great information. Best of luck with next steps.

I'm all about supporting you guys and the fact that you built something first and don't want to be scammy like 95% of the ICO rat bastards out there but I just don't understand why you don't put non intrusive advertisements on the site which will further your chances to get funding from VCs when you should the additional revenue source. It is a proven model for every other social media site / app. I don't know why people in crypto want to completely run away from it instead of just having both ads and crypto economics.

Being built on a blockchain that you don't control and that other entities control the majority of it is a hard sell but it is hard to launch on your own chain as well.

I wish you guys luck.

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well you're right we're not against ads at some point but it will require to design a fair mechanism for all users. I really think we can make that happen but this will be our next move. Currently we need all the team to focus on the product right now and create adoption? Thx for support and positive vibes!

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Just a quick comment on advertising revenue. It is a known vector of malign propaganda, and laundry for funding provided by bad actors. This is evident from the deliberate destruction of profitability of media dependent on advertising revenue, such as news, late night TV, and similar venues, as well as the self-destructive banning and censoring of big social media sites that is contrary to investor interests.

Actual capitalist investment intent on emuneration isn't the main incentive for advertisers, and the targeting of funds for seemingly suicidal platforms and channels demonstrates this. Were @dtube to become dependent on advertising for any substantial funding, it would become captive to these machinations, and there's no point to undertaking advertising models for funding that isn't substantial, particularly given the blowback that would engender.

Thanks!

One would be quick to jump into conclusion by assuming that DTube does not have plans going on when being compared to other DApps on the chain. Meanwhile, this is a ground-breaking strategy. I quite understand that nothing is finite as one cannot predict the future. I like the fact that DTube is on the guard and preparing for the worse come what may as regards the funds (delegation). DTube is long due for a mobile app and a tokenized economy system since only God knows, but I guess we are on the page now. Meanwhile, I hope these plans usher in a better way of handling curation of contents on the DTube platform.

Cheers DTube,
Regards,
Sam.

Thanks @Dtube for the update and I can't wait to see how things progress and evolve over time. I've been out out the steem/dtube game for a little while due to life and current circumstances but i'm eager and excited to be starting back up again soon!

If there's anything I can do to help (making videos or vlogs of some kind for marketing) please let me know and I would be happy to do so.

I didn't use Dtube app yet. But hopefully install my smart phone soon. Then I can put videos since outside without Wi-Fi. That's good move @Dtube.

Really appreciate that you stick on the Steem platform guys, not like DLive...

Skarnoze

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Thanks for these detailed insights, @dtube. This is the right way to introduce Steem to real investors. Cool!

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While taking 25% from the content creator and in the end only serving a template upon the steem blockchain combined with ipfs, I feel this is now a bit greedy. Especially when seeking for investors and more money without publishing any numbers so far.

To be honest, it was a cool idea, but in the long term this is going nowhere. Seven days monetization limit and 25% of revenue taken from the content creator is never going for mass adoption. A video is a much higher investment than a simple blog post and therefore the income of seven days is not enough, even worse when it is only 75% at all.

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10%. Get your facts straight.

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https://steemit.com/video/@heimindanger/introducing-dtube-a-decentralized-video-platform-using-steem-and-ipfs

I have recently created the @dtube account. This account will be used to collect 25% of the DTube author rewards.

Finally you are here,,good move..lets see what comes next.

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Every app should publish updates like this. Nice.

Thank you so much for the update and letting us in on the work that has been going on behind the scenes.
I have to say, there has been many times I wondered if everything was going to be status qou and if this is what we just have to deal with.
It gives me much confidence and all the best to the team.

I love so much your DAPP and I see a great future of it and is cool to have an update where you guys want to go next. :)

Keep up the good work!

I guess the VCs didn't see much of an ROI for their capital.

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Congratulations @dtube!
Your post was mentioned in the Steem Hit Parade in the following categories:

  • Comments - Ranked 10 with 67 comments
  • Pending payout - Ranked 3 with $ 128,57

Nice to see you pushing forward no matter the obstacles in your way, much respect.
MrEasyFix_bottom_thank_you.gif

All the good dapps have a long way to go and i will always be hear to support all my favourite dapps...

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Finally, we get you guys talking again. I like this. More communication, that's all in asking

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This post has been included in the latest edition of SoS Daily News - a digest of all you need to know about the State of Steem.

This is exciting! Can’t wait to see the evolution of @dtube!

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Great information. Thank you. Fingers crossed✊

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tôi chưa hiểu lắm về dtube

"it feels very much like talking to a brick wall."
I often say this myself, and follow on:

"it feels like talking to a brick; it's pointless, and it annoys the brick!"

I believe in decentralized internet and platform. Keep it up!

How did it go when you explained to vc's about video existence length?

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Hey i would love to help, im a pretty new developer and only did 6 months at coding 42 usa but can do design. I really believe in the fight for a immutable youtube, censorship is just wrong for the next era of humanity.
Hit me up btcblade@gmail.com

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cool I'll send you an Email! Thx

Absolutely great ideas. I love it when community come together to stand for unity and progress. I love @dtube for many reasons.

  • Standout in all their rendering services .This has been one of the best #steem platform where you express yourself in visual style, images and representation.

So interested to be part of the dtube staff and workers. I juste wrote an email and also I say here that I would love to be part of your team as an influencer.

My skills in communication in the Spanish language is what I can offer you.

Hope that I can help you in anyway ...

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Hi, sure we'll need your skills in Spanish! Send me your thoughts on discord: @macron. Thx

Thanks for the update, if you don’t mind me asking, what $$ figure are you asking for and what are they buying? Ownership, shared or other? How much in essence do you need? If private, please feel fred to DM me on discord :)

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Congratulations! @Dtube. I think that it is better not to do ICO. Thank you for supporting Steemit community. Resteemed this article.

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Hi @macron, I wanted to let you know that @dtube has been included in the most comprehensive list of blockchain-based social media sites online. On Steemit and here. Thought you might like to know.

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In the crypto space for now, leveraging the community to support improvement is something valuable. I believe in the AirDrop Model. It's quite challenging to solely depend on Steem protocol. Let's hope SMT protocol or Steem-Engine help build token with specific need. EOS Blockchain is bringing many innovation in this space and It will be easy for any dApp to launch it's blockchain and customize it in 1 -click. Look at the Emanate project tokenomy (duo token model very well design with airdrop, membership and private sells). It's Collaborative music on the blockchain. I see Dtube as a collaborative platform and this can be model the same.
The VC will come to learn how value is being created. Congratulation for what u are building. It,s a taugh challenge.

Good luck! It sounds like you have a strong team that is passionate about the project.