Are you interested to know how Seedstarter is democratizing investment? We spoke with the founder, Jesse Hynes, on our latest podcast episode. This article explores the platform’s features, its role in compliant security offerings, and more. Additionally, we also interviewed to the GG Collective, a group leveraging Seedstarter to build a community-owned Web3 gaming ecosystem, a project that anyone can invest in now with as little as $25!
You can read further about Seedstarter’s innovative platform below.
Seedstarter
A big believer in blockchain technology, Jesse Hynes entered the crypto space in 2015. For a time, he also worked as a chief legal officer at a major blockchain gaming company. Despite crypto offering exciting access to early-stage investing for regular people, he saw too many scams and misleading tactics. This frustration led him to found Seedstarter, a platform designed to help companies raise compliant funds while protecting investors from such pitfalls.
Seedstarter, a revolutionary funding portal launched in 2022, aims to democratize investment in early-stage companies. Traditionally, such opportunities have been limited to accredited investors. Seedstarter empowers everyone to participate, fostering a more inclusive investment landscape. Furthermore, Seedstarter champions innovation in the blockchain space, welcoming blockchain companies. However, they differentiate between fundraising and token/NFT offerings. Their focus remains on the core business potential, not just the trendy fundraising tools.
Seedstarter isn’t restricted to blockchain ventures. They recognize potential in various businesses like traditional funding for gaming companies or ownership structures for gaming guilds. Other possibilities also include monetization options for music artists and creators through selling shares of future earnings and capital raising for any startup. Seedstarter breaks down barriers to entry, allowing anyone to invest in the future with a minimum of just $25.
Seedstarter — a compliant investment option
The issue
Jesse elaborated on the idea of digital assets as securities. In his opinion, a digital asset itself isn’t inherently a security, unless it’s intentionally structured that way. He thinks of it this way: creating a digital asset on the blockchain, essentially a string of code, can’t inherently be a security.
However, the issue arises particularly within US regulations. If you sell your digital asset, be it a token, NFT, or node, and it’s clear your company’s goal is to raise funds to build a product, with the buyer reasonably expecting that outcome, then it becomes an investment contract in the US. This doesn’t necessarily make the token itself a security, as seen in the Ripple case. In that case, the court ruled that while some sales were investment contracts, XRP itself wasn’t a security.
“I wouldn’t advise companies to simply avoid selling tokens because of security concerns. But, there’s a good chance that if your token has no utility and your sole purpose is fundraising, you’re likely selling a security. And in that case, compliance is key.”
The solution
This is where his company, Seedstarter, comes in. The platform allows companies to package and sell their tokens as security offerings to users, including both US and non-US users. Importantly, this process doesn’t inherently make the underlying token a security itself. The token can still have utility and deliver value.
Notably, the funding portal, a marketplace, is registered with both the FINRA and SEC organizations. Laws were reformed to be more inclusive for private companies due to the JOBS Act. Subsequently, private companies can raise up to $5 million from the public during a specified 12-month period when using a funding portal. Essentially, the JOBS Act allows you to participate in early-stage funding, having the same opportunities that were once just open to only wealthy investors.
Moreover, the strong competition in companies like Wefunder, for example, does highlight the success cases within this sector. Jesse described the challenges of becoming a licensed funding portal, a year-long process far exceeding the agencies’ advertised timelines. Registration with the SEC and FINRA is mandatory, and the platform needs to be fully functional before applying, hindering further development during the lengthy approval process. Notably, he highlighted a key reason why few companies pursue licensed funding portals: it’s much faster to operate outside the US with looser regulations.
The Seedstarter token
Jesse further explained the potential investment opportunity on the Seedstarter platform with the Seedstarter TOKEN. While he emphasized details are limited due to it being a potential security offering, here’s what he discussed:
- Royalty Token: Seedstarter was considering a royalty token for its investors.
- Profit Sharing: Owning this token would have entitled holders to a portion of the platform’s income. This share would have been based on the amount of tokens you held relative to the total number of tokens.
- Profit Only: Importantly, this was a share of profits, not total revenue. Token holders would not have been responsible for any losses incurred by the platform.
Furthermore, he mentioned the token could potentially function similarly to a stock. He clarified that, if issued, the token would be considered a security and therefore wouldn’t be tradable on platforms like Coinbase. Instead, it would likely trade on platforms authorized for securities, resulting in stricter regulations and less speculative trading. He emphasized that although the price could fluctuate, investors would only share in the platform’s profits, not losses.
Overall, Jesse described a potential investment opportunity that offered potential profit sharing but did not come with the risk of financial loss for the investor. However, it’s important to remember the details surrounding the token are still under development.
The GG Collective — funded by Seedstarter
The GG Collective emerges as a champion for passionate gamers and Web3 enthusiasts like you! Recognizing a gap between players and the complex world of blockchain games, they aim to bridge this divide. The Collective fosters a welcoming environment focused on deep engagement, extending far beyond simply owning digital assets within a game. Their vision is ambitious, encompassing platforms for games, tools, tournaments, content creation, and education – all designed to cultivate a thriving Web3 gaming ecosystem.
Blake, a team member with GG Collective, entered the crypto space through the play-to-earn game, Forge Crypto, around the same time as Jesse. He was impressed by the idea of gamers and developers sharing ownership in a game through blockchain. Blake and his team wanted to create a platform where gamers, developers, and community members could all collaborate and benefit financially.
However, they struggled to find a way to do this compliantly. When they discovered Jesse’s platform, Seedstarter, they saw an opportunity to raise funds through regulation crowdfunding, allowing even small investors to participate in their project. They believe this approach is significantly unique and will allow them to build a sustainable and equitable community-owned gaming ecosystem.
Community ownership
As part of the GG Collective team, we also welcomed Nathan Harper, who brings a wealth of experience to the table, to our podcast. A seasoned entrepreneur with two decades of business ownership, Nathan is also well-known in the crypto space under the moniker ForgedInCrypto. He’s been deeply involved in the crypto ecosystem for nearly half of Bitcoin’s lifespan. For the past two years, his focus has shifted to the burgeoning world of blockchain gaming and the metaverse. Leveraging his extensive crypto network, Nathan is passionate about making this exciting new frontier accessible to everyone.
Nathan emphasized GG Collective’s core principle of community ownership. Recognizing that expensive NFTs priced out many participants, GG Collective would allow community members to collectively own a portion of the project. This community would then have a significant voice in shaping the project’s future, from deciding which games to pursue to influencing development through voting and contributions like building an NFT lending platform.
GG Collective Partnerships
Nathan expressed his enthusiasm about GG Collective’s partnership with Star Atlas, a space exploration game praised for its economic design. They secured a valuable in-game starship and plan to involve the community in its use and potential revenue generation. This aligns perfectly with Star Atlas’ focus on user-created content and community involvement, and GG Collective further extends this philosophy by welcoming game developers to present their ideas for community funding and collaboration.
He Highlighted the Collective’s past focus on gaming, particularly competitive gaming led by his fellow team members,Tim and Drew. It is their desire to expand into various popular games with strong tokenomics that allow players to earn and share revenue. He also highlighted their interest in collaborating with existing projects similar to Star Atlas and reviving promising but struggling games as well.
Their initial year was spent building the core team with expertise in management, operations, and marketing. Emphasizing his own business background, Nathan outlined their long-term goal of establishing a functional business model that generates income within the Web3 gaming space. He believes this is a massive opportunity and wants to reward those involved in building the collective’s success.
The long-term vision
Blake discussed two key aspects of the GG Collective’s long-term vision:
Community-Driven Governance: The GG Collective planned to evolve into a decentralized structure where the community would elect leaders for various departments. This prevented bad actors from gaining control of the treasury and empowered the community to influence the project’s direction, like choosing a marketing team. While a core group currently led the project, GG token holders would ultimately own and control the collective’s future.
Reduced Barriers in Blockchain Gaming: Blake recognized the high costs and complexity that discouraged new players in blockchain gaming. The GG Collective aimed to become a user-friendly entry point by offering community access to high-value NFTs. This allowed people to experiment with these NFTs before potentially buying their own, providing valuable learning experiences and reducing the financial risk of entering the blockchain gaming space.
Spending plan
Blake additionally outlined the spending plan for funds raised for GG Collective through Seedstarter, previously emphasizing community involvement:
- Funding Dependent Plan: The spending approach depended on the amount successfully raised. Details were available in their white paper, targeting a minimum of $150,000 and a maximum of $5 million.
- Operational Costs Priority: If only reaching the minimum goal, most funds were directed towards operational costs. This included paying contractors, marketers, and content creators using GG tokens.
- Other Initial Expenditures:
- Audits: A portion covered past expenses like audits, legal fees, and offering documents.
- Asset Acquisition: This was a major area for spending, but decisions were made through community voting after the fundraising concluded.
- Community Voting Process:
- Voting Timeline: The community voted within 30 days of the fundraising on proposals for asset acquisition.
- Proposals for Consideration: The collective had preliminary ideas such as acquiring assets in Star Atlas or the Solana ecosystem, or exploring other options. They also considered proposals for acquiring nodes for revenue generation or hiring developers for specific projects.
In essence, Blake explained that while they had a spending plan, the community held the ultimate power in deciding how a significant portion of the funds would be allocated for asset acquisition.
Looking ahead
In closing, Jesse reiterated the importance of your careful consideration due to the security offering nature of the investment. He emphasized that all relevant documents for Seedstarter, the royalty token, and GG Collective are available on the Seedstarter website for your review. He welcomed potential investors to explore the FAQs and the legal documents as well as to contact the organization directly through the website or Discord.
Finally, Jesse shifts the focus to the future, mentioning upcoming listings for companies and expressing his openness to new ventures on the platform. He encourages anyone interested in raising funds, be it a Web3 business, an artist seeking music royalty sales, or a game studio, to consider Seedstarter.
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