RAISE

  • Challenge: Financial Inclusion
  • Team Members
  • The Problem: A Common Story
  • Raise: What We’re Building
  • Market Size
  • Why do we need blockchain?
  • Existing solutions

Raise is a secure blockchain enabled crowdsale platform for emerging market innovators to access funding from backers anywhere in the world. Raise is one of the first investment platforms of its kind - it leverages multi-coin blockchain technology to unite global investors with local entrepreneurs.

Challenge: Financial Inclusion - Our team members are diaspora from emerging markets. We believe that sustainable and independent growth in our countries comes from supporting local entrepreneurs. For this reason, we’ve chosen to enter the financial inclusion challenge.

And as emerging market entrepreneurs, we are familiar with the significant challenges of building an early-stage technology product and business in our countries. We also know that technology businesses are highly scalable and can create many jobs in a relatively short amount of time, which reduces youth unemployment. However, one of the major barriers to entry for early-stage products is initial funding. Our team is tackling this significant barrier by building Raise.

Team Members -

Danielle Leong (United States) – Data Science;

David Nuff (Nigeria) – UI and Design;

Lucia Gallardo (Honduras) – Operations, Early-Stage Investment, and Marketing;

Luiz Hamilton Ribeiro Leite Soares (Brazil) – Smart Contract Developer;

Marvin Coleby (Bahamas) – Product and Venture Investing;

Shagufta Rizwan (India) – Token Architecture and Cryptoeconomics.

The Problem: A Common Story -

BeepBus is a Barbadian early-stage startup disrupting transportation in the Caribbean. Their app provides accurate information on bus times to reduce congestion and contribute to necessary urban planning. They are also building a taxi share-riding solution. Since their founding, BeepBus has already created jobs and can create many more with early-stage capital. 31.23% of youth between the ages of 15-24 are unemployed in Barbados.

The BeepBus team has been unable to obtain Angel or venture funding to continue building their product and therefore resorted to raising funds on a donation crowdfunding platform. They recently raised USD $3,935 from local Barbadian backers and lost over 15% to transaction fees. To make matters worse, the Barbadian government flew to Silicon Valley to meet with Uber to negotiate tax incentives to attract the company to Barbados. Without funding, BeepBus has little market penetration and cannot possibly compete with industry giants like Uber.

BeepBus is a common story throughout emerging markets. Innovation is suffocated and youth unemployment rates (ages 15-24) in our countries stay high: Bahamas (31%), Brazil (24.6%) Honduras (12.3%), India (9.6%). But what if BeepBus could raise funds from Barbadian and Caribbean diaspora members that are conscious of the old transportation system and that have an interest in seeing the economy grow? And what if BeepBus could raise this money while paying lower transaction fees? Over 100,000 of its citizens live outside of Barbados. Even if each of them invested $1 in BeepBus, their team could raise significant funds, expand their product and return a financial benefit to each Barbadian emigrant.

Although youth unemployment is caused by many factors, a principal driver of it is a dependency on foreign businesses that can pick up and leave whenever conditions become unfavourable for their bottom line. In the long-run, stifling local small and medium enterprises is a primary cause of weakened economic conditions and of unemployment. Furthermore, local populations are inadvertently conditioned to be risk averse over time.

Thriving innovation ecosystems combat both youth unemployment and risk aversion. Technology startups, in particular, can create jobs and positive impact in a short amount of time. However, these startups have to be funded through the innovation continuum in order to become sustainable sources of wealth and employment. Unfortunately, 83% of global venture funding goes to developed market startups, limiting potential and job creation for local emerging market startups.

Emerging market technology innovators experience limited access to capital:

(a) The World Bank estimates that 17 million emerging market SMEs face limited access to funds, which represents an estimated USD $2.6 trillion credit gap;

(b) Our data shows that 83% of global startup funding in 2016 went to North American and European startups, while only 3% collectively went to Africa, the Caribbean, Latin America and Middle East. Asia accounted for 12%, driven primarily by China and India.

Limited funding suffocates innovation, limits potential employment and creates a difficult entrepreneurial environment. Entrepreneurs throughout Africa, Asia, the Caribbean, Eastern Europe, Latin America and the Middle East are instead forced to bootstrap their ideas for expensive technology products. Eventually, the bootstrap method runs out.

That is where Raise comes in.

Raise: What We’re Building - Raise is a secure blockchain enabled crowdsale platform for emerging market innovators to access funding from backers anywhere in the world. Raise is one of the first investment platforms of its kind - it leverages multi-coin blockchain technology to unite global investors with local entrepreneurs.

The long-term goal for this platform is to build a cross-border community economy for diaspora and local populations. Diaspora members are geographically disconnected from their home, but just as with remittances, many are always looking for a way to participate in their local economy and support the family and friends that still live there. We should know, we are all diaspora members eager to remain connected in some way, shape or form and desperate to see our respective country’s conditions improve. To achieve this cross-border community economy, we want to take crowdfunding tools to create that platform using blockchain technology. Integrating all of these crowdfunding tools on blockchain technology to emerging markets (over 95% of the world population by 2030) is undoubtedly unrealistic in one platform. Therefore, we are creating a road map to phase in features sequentially over time. During that time, our market will also continue to grow.

Our primary target market is diaspora members. We intend to target students, remote workers and other technologically savvy diaspora populations.

Raise wants to tackle one small problem first, to make funding accessible to technology entrepreneurs in emerging markets - and as blockchains become more secure and scalable and people become more familiar with the Raise platform - we will phase in new features like rewards and donations. We eventually want a diaspora member to use Raise tokens in exchange for rewards (personal or local for family and friends), donations, loans and investments. The $500bn remittances market is only one aspect of cross-border finance and relationships between diaspora and local populations.

We, therefore, narrowed the project’s scope to solve an immediate pain point that we are all familiar with: emerging market technology innovators have limited access to funding. Raise is inspired by token sales and traditional equity crowdfunding technologies (“Crowdinvesting”). Crowdinvesting created impressive opportunities for innovators to accept capital funding in developed markets. However, those platforms are geographically limited due to different approaches by national securities regulators. Our research shows that most emerging market securities regulators are hesitant to create enabling regimes for equity crowdfunding, again limiting access to funding.

Raise replicates equity crowdfunding models without the regulatory and security limitations. The platform will be built to satisfy KYC, auditing and tracking concerns expressed by securities regulators in emerging markets. It will also be built to be as user-friendly as possible. Users would not need to know what blockchain is to use it.

Market Size - There are major market size opportunities:

(1) The World Bank estimates that the crowdinvesting industry in emerging markets will be worth USD $96bn by 2025;

(2) There are over 250 million migrants that collectively hold over $500bn in savings;

(3) USD $441bn in remittances were sent to emerging market regions in 2016;

(4) Remote workers and migration are expected to exponentially increase, driving the current diaspora population from 250 million people upward. In Canada, for example, the population is expected to increase by 20 million, with 90.8% of that growth driven by inward migratory populations.

Why do we need blockchain? - Raise is a cross-border financing platform that leverages smart contracts and crowdsale strategies to transfer value. The application must be secure, log and create verifiable auditable transaction data and allow users to send value across borders cheaply and quickly.

Distributed Network

The Raise ecosystem comprises of a distributed network of emerging market entrepreneurs and diaspora backers distributed geographically all across the globe. Blockchain will help us empower these budding innovators by bringing them together with the global backers on a distributed and decentralised platform.

Transparency

Raise is a milestone achievement based funding model. Our smart contracts will hold the money like an escrow unless the required milestones are achieved by the innovators. Blockchain provides a significant trust factor here and eliminates the need for a third party by means of transparency of records. Code is law in case of dispute between the backers and innovators which could only be achieved with the public, distributed, cryptographically secured and synchronised nature of blockchain.

Security

Raise operates across borders and needs to be secure, protect against money laundering or other criminal activities and be auditable. A blockchain-powered platform allows us to create an immutable ledger that can log and transact micropayments for easy auditing. A platform with immutable security measures also protects against attacks and double spending, allowing diaspora members and local populations to send and receive funds without fear of losing them.

Platform Token

A Raise token will be used as a medium of exchange for backers to contribute to innovators and their projects. The token will be traceable to each project to ensure security and reduce risk. In addition, the token serves an important function since it can allow backers to sell their tokens in projects on secondary exchanges. This creates liquidity and removes the inherent risks of investing in emerging market entrepreneurs.

Existing solutions - Equity Crowdfunding

We created a legal memorandum to evaluate the equity crowdfunding market and legality in emerging markets here. We drew inspiration for Raise from the rapid success and decentralized nature of equity crowdfunding platforms.

Equity crowdfunding platforms created impressive opportunities for innovators to accept capital funding in developed markets. However, those platforms are geographically limited due to different approaches by national securities regulators and are virtually unavailable in emerging markets.

Starbase

Starbase is a project by Chinese founders that aims to make crowdsales more accessible to creators. Users on the platform use STAR Tokens to exchange for goods and services as well as to create their tokens and wallets. The Starbase platform allows creators to issue tokens to backers on a global scales that backers than then use to trade on major cryptocurrency exchanges. Their whitepaper states that they aim to increase the non-blockchain utilization of permission less blockchains. Their crowdsale has not yet been announced but they intend to launch in Q4 2017.

Coinlist

Coinlist is an initiative by Protocol Labs and Angel List. Their aim is to create a more accessible platform for accredited U.S. investors to participate in token crowdsales. They intend to launch on August 7, 2017.

KickICO

KickICO is a blockchain crowdfunding platform that claims to be the first platform to use both crowdfunding and crowdsale technology in one platform. They are integrating crypto technology into crowdfunding to create a platform for blockchain and non-blockchain backers to raise funds and for backers to support them all over the world. They are building an all-in-one platform for platform users to start crowdfund, crowdsale and crowdinvesting campaigns. Their whitepaper describes KICKONOMY – a community that runs on KickCoins and allows creators to launch campaigns and for users to back them. Their value propositions are listed below:

Liquid tokens; Protection against fraudulent sales; Marketplace based platform; KickICO recently raised over US $20m in their token generation event.

Movement Capital (previously Homestrings)

One of the more popular crowdinvesting platforms for emerging market development projects. This platform does not use blockchain technology and has not launched.

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Updates

Marvin Coleby posted an update

Thanks for a wonderful hackathon experience, what a long month! We wrestled with many issues: data collection, UI, code, protocols, and regulation. Raise took on a life of its own and was driven by the minds of 6 diaspora members from emerging markets - we are passionate about Raise's mission to empower young entrepreneurs in emerging markets.

We produced the following deliverables that are all available in our google drive: http://bit.ly/raisegoogledrive.

  1. Deliverable booklet

Our deliverable booklet summarizes Raise as a concept, its impact, architecture, branding and also contains a transcript of our pitch audio demo. The deliverable booklet will also direct any reader to our clickable wireframes, demo, GitHub and google drive.

  1. Screencast demo

This is a brief screencast of screens we built with Marvel.

  1. Pitch deck

A detailed PDF version of our pitch deck is available;

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Marvin Coleby posted an update

Tech Stack/Wireframes React Truffle Box Our working code is on GitHub.

Wireframes: Clickable Wireframe

Minimum Viable Product Testing Approach Our marketing test approach will engage directly with our two main user groups: diaspora members and emerging market technology entrepreneurs. We previously described how we intend to market and build ad campaigns, both digitally and in-person with both user groups.

Landing Page/Explainer Video We are creating a landing page with a simple and easy to follow explainer video that shows the value proposition of using the platform both to emerging market entrepreneurs and diaspora members. The explainer video is inspired by Funderbeam which easily explains the problem, value proposition and functionality of the platform. The explainer video will touch on the following topics:

Problem: Accessible funding to investors regardless of networth; Little access to funding country projects; Solution/Value Proposition Ease of finding, funding projects and managing tokens; Sourcing investment projects and tracking milestones/social impact objectives; Functionality/Tutorial Fund projects; Track projects; Receive tokens; Trade them on external platforms to convert to fiat or invest in cryptocurrencies.

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Marvin Coleby posted an update

Google docs link: http://bit.ly/raiseweek2

1) Who are your clients/users? (persona of your user)

Raise targets local emerging market technology ecosystems and their diaspora members. This does not preclude participation from non-diaspora members.

There are two primary target markets:

Emerging Market Technology Projects (“Innovators”):

Industries: Any. Demographic: Young, technology savvy with a proven track record of creating products. Geographic: Emerging market technology ecosystems in countries with huge diaspora populations - Africa (Nigeria); Asia (China/India/Philippines), Caribbean (Jamaica), Latin America (Mexico), Middle East (UAE).

Diaspora Members (“Backers”)

Industries: Any. Demographic: Young tertiary educated migrants and international students (33.7 million from emerging markets in the OECD). Geographic: By greatest percentage share of immigrants of the total population: United States, Germany, United Kingdom, France, Canada, Spain, Australia, Italy, Switzerland, India, Philippines, China.

Market: 31 million tertiary educated migrants in OECD. The number of highly skilled migrants from Asia (tertiary educated) doubled in the last decade, with over 86% more from China and 76% from the Philippines. 2.7 million international students in the OECD, 251 million total diaspora members globally

Target Market Rationale:

Raise’s goal is to create a diaspora community platform with crowdfunding tools that allow diaspora members to participate in their local economies as long as they have access to the internet. This is a long-term goal and we need to evaluate the product and assumptions with a narrow problem set, discrete solution and limited number of actors. We therefore decided to narrow down our initial target market to technology innovators in emerging markets and technology-savvy diaspora members. These target markets are most likely to interact with new technology as well as ideally have the capital, education and basic know how to fund projects in their countries.

Our main target group are diaspora members and backers, who will actually fund projects on the platform and create the revenue for the platform to sustain itself. Mobile investment platforms are increasingly popular among younger segments of the population. Companies like Wealthsimple, an intuitive investment platform targeted at younger generations, enjoy most of their success from users between the age of 25 to 45. Younger demographics are also most likely to use social media and are therefore easier to target using marketing campaigns with online tools. Though we intend to target diaspora members, by targeting a younger demographic of users and using an intuitive mobile investment platform, we will attract a wider set of diaspora members of different generations (e.g. 1st, 2nd, 3rd generation) that are more likely to invest in their countries of origin.

User Stories and Personas (photos not included on Devpost)

We’ve reduced our personas to two users for simplicity: backers and innovators.

Backer (Diaspora Member)

Description This is a wide group of people - members of ethnic and national communities that have left their countries but maintain links with their homelands (2012 Inter-American Development Bank). This includes international students, expats, remote workers, labor migrants, refugees, dual citizens, ethnic diasporas and second/third generation groups. They are typically very knowledgeable about their home market, gaps and industries and can best relate to potentially successful products and investment opportunities given their intimacy with the local culture, customs and economy. Our diaspora member also has a background in investing, which will not always be the case. However, by focusing on this narrow set of users, we can create a platform that covers our most likely user’s concerns, as well as build a product that is easy and intuitive to use for diaspora members with no investment background.

User Story

  • I left my country but would like to invest in opportunities there so that I can contribute to my country’s growth, support entrepreneurs and create my financial return;
  • I would like to be able to easily view investment opportunities, including the investment's track record, team, funding history, product/idea, future potential, valuation, potential to deliver jobs/social impact to be sure that I am making a sound investment;
  • I would like to make technology investments more liquid and less risky so that I can sell them if a project does not perform well or if instability in the country affects my investment;
  • I would like to be able to understand tokens and cryptocurrencies so that I can use this platform and hold tokens;
  • I would like to skip due diligence steps to save time, but still have access to that information anytime;
  • I would like to track investments and see a potential positive social impact return on the investments I made to receive both a social and financial return;
  • I would like to view an investment's competitor landscape before I invest to better evaluate other opportunities.

Innovator (Entrepreneur)

Description - An innovator in an emerging market that is pursuing an idea and product they believe can change their environment and create employment. They bootstrap their business but struggle to scale without investment or mentorship. At any point the entrepreneur should consider raising capital and interesting investors - including options to validate, scale and communicate their product to the outside world.

Story

  • I would like to spend less time looking for and securing funding in early stages to be able to spend more time creating my product and validating my market; I would like to be able to understand tokens and cryptocurrencies and how I can benefit from them;
  • I would like to have access to a crowdfunding platform without stringent equity crowdfunding regulations, high transaction costs and hostile regulatory approaches in order to easily access funding;
  • I would like to be able to use tokens to my benefit without a steep learning curve;
  • I would like to be able to use tokens to raise funding, but easily convert the cryptocurrency into my local currency with little transaction fees and issues.

2) What are their pain points?

We are addressing several pain points:

Innovators (1) Limited exposure to a global market to validate a product; (2) Inability to source investments and international backers; (3) No platform to connect directly with diaspora members other than through expensive remittance services; (4) Expensive donation and reward crowdfunding fees and little access to equity crowdfunding platforms.

Backers (1) Little data and access to venture technology investments in emerging markets; (2) Frustrated with high thresholds (accredited investors) to make minimum investments into private companies; (3) Frustrated with illiquid investments into startups that may never succeed, particularly into emerging markets where there may be foreign exchange fluctuations or political, social and economic instability.

3) What is your product's value proposition?

Local Problems, Local Solutions - Our team members are from emerging markets and intimately understand that sustainable social impact must come from internal actors themselves. The Blockchain for Social Impact Hackathon aims to find technologies that address social issues for financial inclusion, identity, supply chain and energy. There are many technologies that can facilitate and achieve those social goals in each basket. However, without local and enabled technology ecosystems in the countries meant to be the recipients of these technologies, emerging market communities risk being technology consumers instead of technology producers to solve the problems that they experience everyday.

Milestones - Raise’s value proposition is that it aims to reduce youth unemployment and achieve social impact by empowering local, young innovators to use technology to solve local problems. It enables the local innovators to connect with and get funded from global backers in a secure environment. Raise also empowers the backers in many ways. Where in a physical world it is difficult for the backers to identify the right projects and be assured that these projects won’t default after receiving the funding, Raise enforces that “code is law” by implementing milestone based funding. Also, where in real world the money invested by backers is locked for an unguaranteed period, Raise provides them with tokens equivalent to their investments thus adding liquidity to their investment.

Emerging Markets - Raise also focuses on a very narrow segment of users: emerging market technology products and diaspora backers. There are no diaspora direct investment platforms that make it easy for diaspora members to invest in their home countries. Blockchain technology and tokens are enabling this possibility for the first time. Diaspora direct investments are a huge source of potential capital for emerging market countries. With a focus on emerging markets and diaspora members, this sets the product apart in its goals, objectives and target market.

4) What is your distribution and go-to-market strategy? Who can you partner with?

Immediate Partnerships The Raise team will build strong relationships with a total of ten (10) reputable accelerators, two from each region: Africa, Asia, the Caribbean, Latin America and the Middle East. We intend to sign memorandums of understanding for the exchange of information, as well as to source investment prospects. Raise is also partnered with Emerge, a company that connects diaspora and local populations to create innovation. Emerge is organizing hackathons in emerging markets: South Africa, Hong Kong, etc. Raise will partner with Emerge to gain visibility in local countries.

We have already initiated discussions with accelerators in South Africa, Hong Kong, Barbados and Uganda. We were also able to interview them about platform features.

The immediate first MVP of this platform will be in a ‘batch’ approach. We will collect and source five (5) startups, one from each of the regions. Raise will create their campaigns, assist with marketing and test the MVP platform with a controlled group of startups from different industries. We will release three batches of startups (15 in total) over the course of the year to pull data on performance of different industries, control revenue, targeted advertising and other key performance indicators to prepare for the full version of the product, which will be a marketplace and allow any emerging market startup to create a campaign. The marketplace will uphold standards of due diligence that we will refine and improve during the batch releases, based on performance indicators and feedback from users.

Marketing To prepare for our launch, we will first create a comprehensive marketing and communications plan to outline our approach for communicating with target markets, media, and other stakeholders, while also establishing metrics and our implementation schedule.

The following factors are key to our success in marketing our product:

Establishing and confirming trust in and integrity of the platform; Tapping into diaspora member nostalgia and desire to see their country of origin thrive; Dispelling the notions that investors must be rich and/or that it is overwhelmingly complicated to invest; Releasing digestible statistics and infographics on the impact of investments and potential returns to entice users; Meeting our users where they are - backers at cultural organizations and communities, WhatsApp, social media, etc.; innovators at incubators and accelerators, on social media, etc.; User-centric UI and messaging (avoiding jargon, simple and beautiful experience); Expediting the “Aha” moment - the feel good and immediate ROI of a first investment that hooks users into continued use.

Key Messages

Backers We are communicating two key messages to backers. Our marketing campaigns and digital strategies will be built around communicating Raise’s value proposition to them:

Liquidity - tokens are liquid and backers can trade their tokens in case projects or environments become risky; Milestones - there are verifiable milestones so that backers can track the progress of their favorite projects. Milestones create a community around projects - the community has a direct incentive for the projects to succeed, so do the innovators.

To Innovators Innovators gain access and visibility on the platform:

Access - Innovators gain easy digital access to communities of diaspora members, investors and backers all over the world; Visibility - Technology entrepreneurs can be visible to investors and gain market validation for their projects from experts.

Marketing Strategy

Our launch strategy will be four-pronged: Creating user-centric, simple and beautiful branding to simplify the investment and cryptocurrency process (e.g. Wealthsimple); Building ties with partners around the world in order to increase awareness, coverage and engagement; Launching a global Whatsapp and social media campaign in partnership with accelerators; Supporting and organizing educational & habit-building Initiatives.

Branding and User-Centric Visual Identity (Pictures not included on Devpost)

  1. Potential Long-Term Partners for increased awareness:

In OECD markets, our approach would be backer-centric: international chambres of commerce*, international organizations (e.g. World Bank), startup communities and coworking spaces, universities and cultural student organizations*, niche media*, professional organizations and think tanks focused on underrepresented minorities, Angel investment funds and groups*, alternative funds, etc.

In emerging markets, our approach would be innovator-centric: government SME initiatives*, local startup coworking spaces and communities*, universities, media, local funds, entrepreneurship-focused NGOs, internet cafes, etc.

*Asterisk denotes relationships that have already been initiated or developed.

  1. WhatsApp and Social Media Marketing

Emerging markets are the heaviest users of WhatsApp globally. What’s more, is that as diaspora members, we are conscious of the rapidity with which news travels through networks in our regions - we use it everyday to speak to our family and friends at home and abroad. For example, during the recent Hurricane Irma, one of our team members from the Caribbean observed how quickly news, videos, aid requests and other media came through different WhatsApp groups, from friends around the entire region - in real time.

We can leverage the popularity of this platform to create a launch media campaign to specifically target groups and people within the application and platform. We are building out a marketing strategy around this.

Given WhatsApps’ similarity to SMS, we would focus our messaging on immediate calls to action - notifications on high-performing or newly added startups, feedback and customer service loops, and text/visual updates from startups post investment.

Other social media platforms, particularly Facebook and YouTube, also have high penetration rates in emerging markets. Therefore, our strategy will include both paid and organic content for both of these platforms. Most of this content would be educational and focus on the benefits of investing early on, potential ROIs, startup and backer features, etc.

Digital Marketing & SEO

We will also implement a few other tools in order to ensure our key messages are reaching the right audiences. These include: Google Adwords: This tool will allow us to advertise both locally and globally, to maintain constant online presence, and to reach our desired niche when they search for keywords such as investment, emerging markets, startups, Angel investment, venture capital, and more, tech, founders, and more. These targeted ads would optimize our visibility with the right audience segments, ultimately leading to increased awareness and new website visitors.

Marketing Research: Analytics and research would enable us to tie our ads to words relating to issues and questions unique to the diaspora community. By targeting emerging market regions, as well as countries with massive diaspora populations, we can increase the likelihood of social sharing among family and friends networks that are still in the countries where diaspora members are from.

Audience Segmentation: Tactics to monitor search and purchase behaviour, as well as circumstances of major life events (for example when someone has secured a new job) will help us determine who and how to market Raise. We would also curate Lookalike audiences for both our backers and innovators, to ensure we can find the top 1% - 10% of users that share similar traits to current Raise users. Facebook also allows us to layer targeting options, which means we can employ hypertargeting to find an exact target audience match.

  1. Educational and Habit-Building

Our content strategy would focus heavily on countering misconceptions that to invest, one needs to be rich and established. Our educational messaging and content would aim to demonstrate the benefits and ROI of starting investment activities early on, as well as on the ease with which it can be done through our platform. Our goal is to inspire diaspora communities to view this as a passive income activity that they can engage in regularly and that also supports their home countries or regions.

Evaluating Marketing Strategy Effectiveness

The effectiveness of our strategy will be evaluated according to the following criteria: Media Coverage (number of features) User Acquisition (customer acquisition cost on both ends, retention and churn rates, lifetime value) and Website and Social Media Analytics (visitors, engagement, followers, activation) Revenue Referral Rates User Feedback Number of Investments Made ROI for Backers Growth Metrics for Innovators

5) What are the risks associated with your solution?

Securities Laws We are conscious of the significant securities and regulatory hurdles surrounding the Raise platform. Some of those risks are KYC/AML rules, crowdfunding regulations, investment amounts into private companies and currency exchange controls.

Raising funds and ‘investing’ in private companies is never an easy task, especially when it is done across borders. There are significant legal risks surrounding Raise’s platform, especially given that many securities regulators are still unfamiliar with blockchain technologies, tokens and cryptocurrencies. As with any technology product or legal risk, you can never eliminate risk, only mitigate it.

In our previous equity crowdfunding memorandum provided in our Weekly 1 deliverable, we researched the concerns expressed by local securities about why equity crowdfunding platforms may offend securities regulations and distilled those concerns to: (1) KYC/AML rules, (2) auditable ledgers and (3) Minimum funding amounts.

Here are some of the steps we intend to take to minimize our legal risks:

Incorporation and Operation We intend to incorporate the Raise Foundation and Operating Company in a blockchain-friendly jurisdiction (Singapore, Switzerland), as well as organize the holding companies for individual projects in those jurisdictions. In other words, the tokens for projects will not directly be held by innovators in their corporate structures in each of their countries - but instead held in a special purpose vehicle for their benefit in a blockchain-friendly jurisdiction. Innovators will be able to ‘cash out’ their funds from backers using local exchanges. They will be exposed to risk at the level of cashing out their investment, depending on whether the exchange operates legally or illegally in their country.

Verifiable and Auditable Transactions The advantage of using blockchain technology is that we have auditable and verifiable proof of microtransactions at all levels. All transactions are recorded and if requested, we can provide proof of each micro transaction: where they were sent, to who and in what amounts. They can be provided in ledger formats.

KYC/AML Platform users will login and input relevant information to allow us to identify them. To simplify this process we are considering using Civic’s identity management platform via an API integration.

These are a list of non-securities risks associated with the platform: Failed Projects - there will undoubtedly be many failed projects on the platform, we are building a token and cryptoeconomics such that the value of the parent token will not be affected by individually failed projects; Fraud and Gaming Milestones - there is a risk that innovators can game the platform by exaggerating achieved milestones. We will protect against this and protect investors by creating tiers of decision making to validate whether milestones have been achieved.

6) What is the impact of your solution? How will it be measured?

Impact

Impact will be determined through KPIs created from local and global economic data that measure growth of the startup as well as their impact locally. The local data will determine the growth and impact of the startup on the global market, then compared on a global and regional scale through GDP to assess the welfare of the startup in relation to the market welfare as a whole. Measurements Locally

The startup will report relevant data on expenditures (outflow into local economy) as well as job creation data. Should there not presently be job creation at the stage the startup is in, this can be extrapolated from information about basic/modal lifestyle cost in relation to inflow into economy from startup. In addition, typical growth will be assessed from the opinions and time data held by local accelerators.

Globally

GDP and market performance data will be gathered to assess welfare of market as whole and regionally. This growth will be compared with the local growth of the startup to determine whether the startup is growing at typical rate relative to market.

Crowdsourced data

Users can opt into a tribunal program where their opinions are treated as aggregated data points weighing into the feasibility of the milestones and proposed timeline of a startup’s project.

Metrics

From the local data, a model can be formed that will indicate the current performance of the startup related to the pulse of the global market:

A metric could aggregate and weigh the health of the startup vs the health of the market locally and globally and score the startup based on their relative performance; Growth metrics concerning milestone achievement and period of time for a particular milestone can be developed using in house data reported from the startup can be generated and weighed against growth performance metrics regionally as well as internationally.

Market contribution/Social Impact on Community

Looking at capital expenditure of the startup can be used as an indicator of how the startup is contributing to job growth of the market. Market data will also be used to indicate cost of living and how many livelihoods are supported by the contributions the startup is making to the local market.

An opportunity arises during the collection of reported data on the side of the startups, their impact on the regional job market and effect on progressing the lives of those in the nation can be measured and make a stronger argument as to the benefits of startups, possibly encouraging growth while also helping investors choose startups whose traits point towards a higher score on a job creation metric.

Job growth created within the startup can be used to indicate the health and growth rate of the startup. By aggregating this data, we can begin to determine likelihood of a startup growing aggressively and creating a larger impact in the economy as well as a measurement of where they are in moving from ideation to MVP to successful market player.

7) Define the technical specifications and development roadmap Token Architecture & Design Strategy:

Raise is a decentralized application that uses Ethereum as the choice of blockchain technology and a token built on ERC20 specifications. Ethereum allows creating any arbitrary smart contract including smart contracts that represent digital assets called Ethereum tokens. It is also capable of creating escrow contracts which is vital for Raise.

Platform - We intend to build the platform on the Ethereum blockchain using ERC20 standard tokens. Data will be stored in an inter-planetary file system and smart contracts will administer funding, hold and distribute Raise tokens, charge a transaction fee and hold funds in escrow.

Payment Mechanisms - We will also use the BTCRelay protocol to allow funds to be accepted in BTC as well as ETH to the platform. When the innovator receives funds in cryptocurrency, in order to cash out, we are considering implementing the Beyonic API (a Ugandan company) for innovators to receive their cryptocurrency into mobile money throughout countries in Africa and Asia, our largest markets.

Milestone Mechanisms - The platform will make use of milestones to determine whether a startup is entitled to receive remaining funds based on their success of certain pre-determined factors. We are in discussions with Kleros (an Argentinian startup), which is a decentralized autonomous organization for decision-making that can adjudicate decision with anonymous jurors all over the world in different industries/tribunals in real time. With the Kleros protocol, we remove the need for investors to decide over investment milestones and return fairness to the startup by allowing a decentralized and anonymous decision-making protocol to decide whether milestones were met using Schelling Point theories in the Kleros platform.

Identity and Security - We are considering using an identity management platform like Civic (a South African founder) to increase security on the platform and satisfy any AML/KYC concerns by securities regulators.

Raise allows Diasporas to invest in their choice of projects pitched by the innovators on the platform. The funding is milestone based i.e. let’s say if there are 3 milestones specified for a particular project to receive the funding in entirety, and a backer wants to invest $30,000 in totality given that the innovator receives $10,000 after achieving every milestone. Then the money invested by the backer will be held in an escrow contract until it is notified of milestone completion. With every notification, it will release the intended fund to the innovator’s account.

Raise also leverages a native token. These tokens represent digital assets i.e. investments made by backers on the platform. These investments are a loan given by backers to the innovators in order to invest in their company. For example, if a backer invests $5,000 there will be 5,000 tokens created and returned to the backer by the platform. These tokens will add a value proposition to the backers as they are liquid in nature. They can sell them at any price they want or buy more tokens from other backers on the platform. Upon a liquidity event (IPO or acquisition), the backers will see a return on the investment in amounts relative to the tokens that each backer holds. In case it is a milestone based funding, the backer will receive tokens as and when funds are credited in the innovator’s wallet.

Client Side: 1) Perform a DNS lookup to receive a hash of your dapp 2) Download the dapp from peers on IPFS 3) Load your HTML/JS/CSS 4) Lookup the most recent crowdfunding projects on Ethereum 5) Each project will contain a hash of the pitch video, content, and rewards 6) Use the hash to download a project's content from IPFS 7) Send ETH (Ethereum's currency) or Bitcoins to fund the project

Ethereum Side: 1) The Funding smart contract receives the payment. 2) If it is Eth, it proceeds to next step. If it is Bitcoin, it goes to BTC relay for transaction verification 3) Once the milestones for the project have been achieved, the contract either pays the innovator or returns the funds to the backers. 4) The global state contains the list of current projects, references to their content, and simple logic for the payout. 5) IPFS contains the Dapp code and project content. Development roadmap We intend to develop the Raise platform over time as we wait for developments in the blockchain technology industry: Easier accessibility to cryptocurrency for non-sophisticated users; Plasma update and Ethereum’s scalability; Launch and development of platform APIs like Civic and Kleros;

We also intend to sequentially add features to the platform to eventually create a diaspora community platform. Each added feature will be based on the success of the last features.We also intend to have an ICO after, and only if, the platform is functional and successful. Here is a rough outline of our platform development.

Development Roadmap (Chart not included on Devpost)

Informational Pitch and User Interviews August 2017

Re-branding and Business Plan Dev September - October 2017

Solidify Partnerships with Accelerators November 2017

Financing for Development - Incorporate Legal Structures November 2017 - January 2018

Apply for World Bank Summit November 2017

Code Smart Contracts/Finalize White Paper Integrate Civic, Kleros, Beyonic APIs March - September 2018

Digital Marketing Strategy for Launch August - December 2018

MVP (Beta) Product Launch (Batch of curated startups) The first iteration of this platform will collect five (5) startups from each region, Africa, Asia, the Caribbean, Latin America and the Middle East and create their campaigns, release their products online and control the investment process to test the platform. We will release 3 batches during 2019. February 2019 (1st batch) May 2019 (2nd batch) August 2019 (3rd batch)

Token Generation Event (ICO) December 2019

MVP (Alpha) Startup Marketplace Launch January 2020

Feature Add: Rewards Tokens can be exchanged for rewards. July 2020

Feature Add: Send-a-Reward Tokens can be exchanged for rewards and the rewards of different products from startups can be sent to family members locally December 2020 (in time for Christmas)

Feature Add: Donation Tokens can be exchanged for donations. List projects/natural disasters/recovery efforts that need funding using tokens. March 2021

8) Define your impact criteria and how you measure it We are narrowing our impact criteria to two quantifiable measures: (1) jobs created and (2) users. For our MVP, this will allow us to build the platform with quantifiable data and metrics to evaluate our performance as well as that of the innovators.

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Marvin Coleby posted an update

RAISE (Week 1 Deliverable)

Contents:

  • Challenge: Financial Inclusion
  • Team Members
  • The Problem: A Common Story
  • Raise: What We’re Building
  • Market Size
  • Why do we need blockchain?
  • Existing solutions

Raise is a secure blockchain enabled crowdsale platform for emerging market innovators to access funding from backers anywhere in the world. Raise is one of the first investment platforms of its kind - it leverages multi-coin blockchain technology to unite global investors with local entrepreneurs.

  • Challenge: Financial Inclusion -

Our team members are diaspora from emerging markets. We believe that sustainable and independent growth in our countries comes from supporting local entrepreneurs. For this reason, we’ve chosen to enter the financial inclusion challenge.

And as emerging market entrepreneurs, we are familiar with the significant challenges of building an early-stage technology product and business in our countries. We also know that technology businesses are highly scalable and can create many jobs in a relatively short amount of time, which reduces youth unemployment. However, one of the major barriers to entry for early-stage products is initial funding. Our team is tackling this significant barrier by building Raise.

  • Team Members -

  • Danielle Leong (United States) – Data Science;

  • David Nuff (Nigeria) – UI and Design;

  • Lucia Gallardo (Honduras) – Operations, Early-Stage Investment, and Marketing;

  • Luiz Hamilton Ribeiro Leite Soares (Brazil) – Smart Contract Developer;

  • Marvin Coleby (Bahamas) – Product and Venture Investing;

  • Shagufta Rizwan (India) – Token Architecture and Cryptoeconomics.

  • The Problem: A Common Story -

BeepBus is a Barbadian early-stage startup disrupting transportation in the Caribbean. Their app provides accurate information on bus times to reduce congestion and contribute to necessary urban planning. They are also building a taxi share-riding solution. Since their founding, BeepBus has already created jobs and can create many more with early-stage capital. 31.23% of youth between the ages of 15-24 are unemployed in Barbados.

The BeepBus team has been unable to obtain Angel or venture funding to continue building their product and therefore resorted to raising funds on a donation crowdfunding platform. They recently raised USD $3,935 from local Barbadian backers and lost over 15% to transaction fees. To make matters worse, the Barbadian government flew to Silicon Valley to meet with Uber to negotiate tax incentives to attract the company to Barbados. Without funding, BeepBus has little market penetration and cannot possibly compete with industry giants like Uber.

BeepBus is a common story throughout emerging markets. Innovation is suffocated and youth unemployment rates (ages 15-24) in our countries stay high: Bahamas (31%), Brazil (24.6%) Honduras (12.3%), India (9.6%). But what if BeepBus could raise funds from Barbadian and Caribbean diaspora members that are conscious of the old transportation system and that have an interest in seeing the economy grow? And what if BeepBus could raise this money while paying lower transaction fees? Over 100,000 of its citizens live outside of Barbados. Even if each of them invested $1 in BeepBus, their team could raise significant funds, expand their product and return a financial benefit to each Barbadian emigrant.

Although youth unemployment is caused by many factors, a principal driver of it is a dependency on foreign businesses that can pick up and leave whenever conditions become unfavourable for their bottom line. In the long-run, stifling local small and medium enterprises is a primary cause of weakened economic conditions and of unemployment. Furthermore, local populations are inadvertently conditioned to be risk averse over time.

Thriving innovation ecosystems combat both youth unemployment and risk aversion. Technology startups, in particular, can create jobs and positive impact in a short amount of time. However, these startups have to be funded through the innovation continuum in order to become sustainable sources of wealth and employment. Unfortunately, 83% of global venture funding goes to developed market startups, limiting potential and job creation for local emerging market startups.

Emerging market technology innovators experience limited access to capital:

(a) The World Bank estimates that 17 million emerging market SMEs face limited access to funds, which represents an estimated USD $2.6 trillion credit gap;

(b) Our data shows that 83% of global startup funding in 2016 went to North American and European startups, while only 3% collectively went to Africa, the Caribbean, Latin America and Middle East. Asia accounted for 12%, driven primarily by China and India.

Limited funding suffocates innovation, limits potential employment and creates a difficult entrepreneurial environment. Entrepreneurs throughout Africa, Asia, the Caribbean, Eastern Europe, Latin America and the Middle East are instead forced to bootstrap their ideas for expensive technology products. Eventually, the bootstrap method runs out.

That is where Raise comes in.

  • Raise: What We’re Building -

Raise is a secure blockchain enabled crowdsale platform for emerging market innovators to access funding from backers anywhere in the world. Raise is one of the first investment platforms of its kind - it leverages multi-coin blockchain technology to unite global investors with local entrepreneurs.

The long-term goal for this platform is to build a cross-border community economy for diaspora and local populations. Diaspora members are geographically disconnected from their home, but just as with remittances, many are always looking for a way to participate in their local economy and support the family and friends that still live there. We should know, we are all diaspora members eager to remain connected in some way, shape or form and desperate to see our respective country’s conditions improve. To achieve this cross-border community economy, we want to take crowdfunding tools to create that platform using blockchain technology. Integrating all of these crowdfunding tools on blockchain technology to emerging markets (over 95% of the world population by 2030) is undoubtedly unrealistic in one platform. Therefore, we are creating a road map to phase in features sequentially over time. During that time, our market will also continue to grow.

Our primary target market is diaspora members. We intend to target students, remote workers and other technologically savvy diaspora populations.

Raise wants to tackle one small problem first, to make funding accessible to technology entrepreneurs in emerging markets - and as blockchains become more secure and scalable and people become more familiar with the Raise platform - we will phase in new features like rewards and donations. We eventually want a diaspora member to use Raise tokens in exchange for rewards (personal or local for family and friends), donations, loans and investments. The $500bn remittances market is only one aspect of cross-border finance and relationships between diaspora and local populations.

We, therefore, narrowed the project’s scope to solve an immediate pain point that we are all familiar with: emerging market technology innovators have limited access to funding. Raise is inspired by token sales and traditional equity crowdfunding technologies (“Crowdinvesting”). Crowdinvesting created impressive opportunities for innovators to accept capital funding in developed markets. However, those platforms are geographically limited due to different approaches by national securities regulators. Our research shows that most emerging market securities regulators are hesitant to create enabling regimes for equity crowdfunding, again limiting access to funding.

Raise replicates equity crowdfunding models without the regulatory and security limitations. The platform will be built to satisfy KYC, auditing and tracking concerns expressed by securities regulators in emerging markets. It will also be built to be as user-friendly as possible. Users would not need to know what blockchain is to use it.

  • Market Size -

There are major market size opportunities:

(1) The World Bank estimates that the crowdinvesting industry in emerging markets will be worth USD $96bn by 2025;

(2) There are over 250 million migrants that collectively hold over $500bn in savings;

(3) USD $441bn in remittances were sent to emerging market regions in 2016;

(4) Remote workers and migration are expected to exponentially increase, driving the current diaspora population from 250 million people upward. In Canada, for example, the population is expected to increase by 20 million, with 90.8% of that growth driven by inward migratory populations.

  • Why do we need blockchain? -

Raise is a cross-border financing platform that leverages smart contracts and crowdsale strategies to transfer value. The application must be secure, log and create verifiable auditable transaction data and allow users to send value across borders cheaply and quickly.

Distributed Network

The Raise ecosystem comprises of a distributed network of emerging market entrepreneurs and diaspora backers distributed geographically all across the globe. Blockchain will help us empower these budding innovators by bringing them together with the global backers on a distributed and decentralised platform.

Transparency

Raise is a milestone achievement based funding model. Our smart contracts will hold the money like an escrow unless the required milestones are achieved by the innovators. Blockchain provides a significant trust factor here and eliminates the need for a third party by means of transparency of records. Code is law in case of dispute between the backers and innovators which could only be achieved with the public, distributed, cryptographically secured and synchronised nature of blockchain.

Security

Raise operates across borders and needs to be secure, protect against money laundering or other criminal activities and be auditable. A blockchain-powered platform allows us to create an immutable ledger that can log and transact micropayments for easy auditing. A platform with immutable security measures also protects against attacks and double spending, allowing diaspora members and local populations to send and receive funds without fear of losing them.

Platform Token

A Raise token will be used as a medium of exchange for backers to contribute to innovators and their projects. The token will be traceable to each project to ensure security and reduce risk. In addition, the token serves an important function since it can allow backers to sell their tokens in projects on secondary exchanges. This creates liquidity and removes the inherent risks of investing in emerging market entrepreneurs.

  • Existing solutions -

Equity Crowdfunding

We created a legal memorandum to evaluate the equity crowdfunding market and legality in emerging markets here. We drew inspiration for Raise from the rapid success and decentralized nature of equity crowdfunding platforms.

Equity crowdfunding platforms created impressive opportunities for innovators to accept capital funding in developed markets. However, those platforms are geographically limited due to different approaches by national securities regulators and are virtually unavailable in emerging markets.

Starbase

Starbase is a project by Chinese founders that aims to make crowdsales more accessible to creators. Users on the platform use STAR Tokens to exchange for goods and services as well as to create their tokens and wallets. The Starbase platform allows creators to issue tokens to backers on a global scales that backers than then use to trade on major cryptocurrency exchanges. Their whitepaper states that they aim to increase the non-blockchain utilization of permission less blockchains. Their crowdsale has not yet been announced but they intend to launch in Q4 2017.

Coinlist

Coinlist is an initiative by Protocol Labs and Angel List. Their aim is to create a more accessible platform for accredited U.S. investors to participate in token crowdsales. They intend to launch on August 7, 2017.

KickICO

KickICO is a blockchain crowdfunding platform that claims to be the first platform to use both crowdfunding and crowdsale technology in one platform. They are integrating crypto technology into crowdfunding to create a platform for blockchain and non-blockchain backers to raise funds and for backers to support them all over the world. They are building an all-in-one platform for platform users to start crowdfund, crowdsale and crowdinvesting campaigns. Their whitepaper describes KICKONOMY – a community that runs on KickCoins and allows creators to launch campaigns and for users to back them. Their value propositions are listed below:

  • Liquid tokens;
  • Protection against fraudulent sales;
  • Marketplace based platform;

KickICO recently raised over US $20m in their token generation event.

Movement Capital (previously Homestrings)

One of the more popular crowdinvesting platforms for emerging market development projects. This platform does not use blockchain technology and has not launched.

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Marvin Coleby posted an update

Our team is hard at work! We have designers, data strategists, developers, token architects, lawyers and venture capital investors.

We are split into smaller teams to tackle design, token architecture, data and revenue model/diligence.

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