There are many ways to skin a cat when it comes to fundraising.
Growth investments and equity raises are among several successful methods that start-ups use to take the next step in their growth plans.
The traditional models are effective but usually require the business to give away a percentage of ownership in exchange for the capital.
One of our All-Star businesses has used an ingenious model to raise more than €5.3 million without diluting their shareholding.
GreenHeart CBD is an Irish owned start-up formed by two young entrepreneurs and childhood friends Paul Walsh and Mark Canavan.
The dynamic founders are executing on a vision to bring the finest Irish made CBD products from seed to shelves around the country.
They also help farmers to produce the finest organic hemp crops through education, financing and the provision of technology including drones and artificial intelligence.
Within two years of establishment, GreenHeart CBD is both revenue producing and profitable and the company has raised more than €5.3 million by leveraging cryptocurrency and blockchain technology.
Appearing as guest speakers at our recent entrepreneurs’ meetup, the pair revealed their method in a fascinating chat with our managing director Kapil Khanna and offered their 10 lessons for business leaders and entrepreneurs.
#1. Tokenizing your business can be an effective alternative to more traditional fundraising
Paul: “We noticed that our customers would buy bulk amounts of CBD because it’s very expensive, so we decided to introduce a cryptocurrency token for future discounts on our products as an incentive for investors.”
The cryptocurrency token is a reward that Greenheart customers get for investing in the company at an early stage – the token buys them discounts on the product in the future.
Introducing cryptocurrency tokens as a method of fundraising has allowed Greenheart to grow without diluting its shareholding.
#2. Tokenizing can benefit both entrepreneurs and customers
Paul: “Tokenizing will enable young entrepreneurs to keep full control on their businesses whilst raising the funds they need to expand quickly across the world.”
If the business achieves what it sets out to do then the community that has invested in them will see a return on the token uplift.
#3. You don’t have to start Tokenizing right away
Paul: “We started as a traditional business, and then brought cryptocurrency into the mix as a way to benefit our customers”.
Businesses should establish their core business model and customer base before looking at ways to tokenize the business.
Business owners should bear in mind that tokenization is not a one size fits all approach and it may not benefit your business.
#4. Customers should come first when thinking about Tokenizing
Mark: “If and when you do tokenize your business you are basically looking for ways to give customers value out of the growth in your business.”
Keeping the needs and wants of your customers front and centre helps you to think of the best ways to incentivise them to invest.
#5. Mistakes are worthwhile if you can learn from them
Mark: “We saw the mistakes that we made as a necessary part of a learning process.”
“We could have brought people in earlier which would have made our lives easier, but working mad hours with just two of us built a strong bond.”
The Greenheart team are successful because they find positivity or solutions when things inevitably don’t go to plan.
#6. Teamwork is vital to the success of your business
Paul: “We couldn’t have made this work individually. I am a dreamer with lots of big ideas, while Mark is the man who figures out how to best put them into practice.”
Teamwork improves productivity and brings better business results, boosting morale and motivation as well as healthy risk-taking.
#7. Establish and understand your purpose
Mark: “We are passionate about Greenheart because we truly believe that we help people. When we started out, we kept that as our focus – profitability came second.”
Passion in business only gets you so far. You can be passionate about your business but it could become meaningless if you don’t know WHY you do it.
#8. Be open to other opinions
Mark: “Always listen to everybody around you and be open to taking different opinions onboard.”
“Everybody has a different way of going about things and some are better than others. Be open to bringing in people with different specialities and allow the whole company to move forward with a good strong strategy.”
Greenheart has built a team from diverse backgrounds who are all pulling in the same direction to the benefit of the company.
#9. Don’t let your fears hamper your growth
Paul: “We have certain products and processes in the process of getting patented but if the world wants to take our models then there is no way of stopping that.”
“I wear my heart on my sleeve and I’m never afraid of giving away access to open source technology.”
Nobody can remove the inventor from the invention – they may steal your idea but they can’t steal your passion.
#10. Research the companies behind the tokens
“It’s very important not just to invest in a token itself but to look at the company and the project behind it.”
It’s a volatile market and there are a lot of tokens that are “pump and dump” scams so it’s very important to look at the company and the vision behind the token.
To find out more about Greenheart CBD visit their website at greenheartcbd.ie