Why startups and investors should keep their eyes on the Public Accelerator Incubator model
The narrative of the disenfranchised entrepreneur has been the face of a handful of today’s startups who continue to struggle over the lack of financial resources. Hence, there is a birth of programs such as incubators and accelerators that help businesses raise capital.
Aiding in the disruption of the startup investment industry, is Digital Arts Media Network, Inc.’s (OTCMKTS:DATI), a Public Accelerator Incubator (PAI) established by business management development firm, AJENE WATSON, LLC. This is a model that entrepreneurs should certainly turn their attention to if they do not want to get left behind.
Several guidelines for effectively starting a business suggest tapping firms specializing in startup incubator or accelerator models. But what are these approaches?
Generally, both aim to help provide startup business with the resources to support them in reaching their maximum potential for growth. For both incubator and accelerator, assistance may come in the form of office space, a series of mentorship workshops, seed capital formation or all of these packaged as one offer.
The delineation is marked between the business development stages. This said, incubators are mostly where beginners go to while those seeking to hasten reaching growth targets are most likely to run accelerators for help. But as startups grow, the current number of these programs may not meet the demand to support fundraising for these startups.
“We will have more startups fighting for capital resources with fewer accelerators able to accommodate that growth,” said Ajene Watson, one of the founders of Digital Arts Media Network, in an interview with PSInvestor.com.
He noted that the difficulty to offer investors with easy access to liquidity is thinning the investment pool for startups. Angel investors, for instance, may be hesitant to put their money in a startup and have those funds tied up for too long before they get any return on their investment. Angel investors, according to research, average one deal every 18 months. Micro-cap investors, meanwhile, may also find it difficult to access high-valued startups, missing out on the opportunity to take a piece of a future Facebook, Uber or Snapchat during the early development stages.
This is where Digital Arts Media Network comes in. What it offers is a complement to incubator and accelerator firms out there, helping them meet the growing need of startups to raise capital while giving investors early access to early liquidity without any cost to their private investment.
Designed specifically for the advantage of microcap investors, the PAI model offers to accelerate capital formation to startups by offering early liquidity to angel investors. Traditionally, investors are granted access to liquidity from five to 10 years, or even longer. Under the PAI-model, Digital Arts Media Network offers Angels+, its flagship product that allows investors to access liquidity from their private investments in as early as 24 months.
“What Angels like best is that the DATI portfolio continues to grow as high-valued, high-tech startups are added. This could translate into a nice value of confidence on the equity kicker they’ve received,” Watson added.
The model was only just officially launched in 2017, but Digital Arts Media Network already has four client-companies in its portfolio—the music royalty sharing app Vezt, Inc., cannabis focused crowdfunding portal Fundanna.com, communication solutions provider OpenVision Labs, and truCrowd, Inc., the owner-operator of FINRA Member Reg. CF.
The firm also has an Invest+ program wherein its team offers capital along with expertise in business development, marketing, compliance, and crowdfunding, among other business-related pursuits.
On top of these, the firm is set to add four more companies in its portfolio, which will be announced in the coming months. Although in its infancy, Digital Arts Media Network’s model is starting to gain some steam, providing a link between startups and investors. Microcap investors gain access to high-valued tech startups while startups raise financial support faster as angel investors receive early liquidity at no additional cost.