Tokenize Your Business and Get Funded
Case Study: Startup Funding
Founded in February 2018 by luxury professionals, CosMix is the leading private flash-sale cosmetic agency. The company is recognized for the quality of its offers, as well as the quality of its relationships, both externally with customers and internally within its teams.
CosMix achieved a total turnover of more than 100,000 euros by the end of 2018, with positive growth every month since its inception.
CosMix is willing to take on a new challenge and explore new opportunities with traffic acquisition and a strategic vision: setting objectives, budgets, and roadmap to achieve double-digit growth. CosMix wants to hold first place with its unique positioning, keep its lead, and conquer the world of cosmetics.
On a strategic and operational level, CosMix’s CEO is in charge of selecting and implementing a five-million-euro round of funding in 2020.
Today’s Venture Capital Limitation
The startup CosMix had been planning to raise a Series A round from VCs, who had been showing some initial interest. However, the prospects of closing a seed round were promising due to concerns revealed by both sides.
The VCs were reluctant to fund such a hefty round before product development was even completed, let alone tested in the market to be sure of their investment. Moreover, the complex share transferability mechanisms didn’t help the VCs because of the illiquid nature of the SME’s stocks.
CosMix was concerned by the terms of the VCs’ investment and a perceived misalignment around mid-term strategy, which would become a serious issue, given the board seats the VCs requested. Additionally, the VCs’ funding model offered CosMix’s founders an all-or-nothing scenario.
Tozex Platform and Token Offering Approach
CosMix decides to look at the Tozex platform for a new approach.
CosMix proceeded to a funding application and choose the appropriate token-based fundraising mechanism (token offering). The crowd traction process is a powerful guideline for entering a live and automated process. From the economics of the project, qualitative legal information, and financial information to fundraising success, the CosMix token will be taken to market.
CosMix followed clear steps with automated templates and milestone tracking.
Primary Market (The Offering)
1. Funding application
a. Project description
b. Legal, financial, and commercial documentation
c. Stage of company development
d. KYB process verification
e. Token-based fundraising mechanism selection (ICO, STO, or BRO)
f. Validation or rejection of the project based on matrix verification criteria
2. Fundraising campaign preparation through the Tozex Dashboard
a. Digital asset creation according to the selected mechanism
b. Offering characteristic definitions (rounds, price, hard/soft cap, timeline, etc.)
c. Project display on the investor platform a
3. Fundraising campaign launch through Tozex Dashboard
a. Fundraising campaign management
b. Real-time evolution of raised funds stored in the Digital Asset Vault (fully controlled by the entrepreneur)
c. Promotional tools utilization to extend the audience
d. Project description
4. End of a fundraising campaign
a. Raised funds transferred immediately when soft cap is reached
b. Primary investors receive digital assets purchased
c. Liquidity reserve fund created and filled with 5% of the digital asset’s total supply
Secondary Market (Post-Offering)
5. Exchange listing of a successful fundraising campaign
a. Trading pairs available (TUSD/DAI/BTC/ETH/TOZ)
b. Digital asset listing on the exchange to open trading
c. Graphic, charts, and various tools available for trade monitoring
d. Communication channels with traders available
a. Trading competition and give away
b. Market making
c. OTC desk services
d. Portfolio reporting
Clear steps with guidelines, automated templates, and milestone tracking allow Tozex to bring entrepreneurs a crowd-driven experience to transform dreams into economically viable projects.
With an intuitive interface with a rich Investpad and choices and an easy process with community support and voting, Tozex offers investors a progressive, risk-controlled, and shared way to order and build a valuable asset portfolio.
At this stage, CosMix has full funding and controls the financing of every planned step and every decisive milestone and has the power to succeed in its economic environment.
Financing built on blockchain infrastructure opens up new possibilities for financial innovation, especially for financing SMEs. For the first time in history, SMEs have a programmable capital-raising mechanism at their disposal, which brings wider access, transparency, and liquidity. Entrepreneurs can recapture the sovereignty of their finances. Tozex will be preferred capital-raising avenue for SMEs within the coming years.
Tozex takes a democratic approach to companies’ finance development. Companies succeed in the economy, and project members and investors benefit from this success without suffering from liquidity issues.
CosMix is a leader in this new niche of the seasoned cosmetics market. In 2023, its capitalization of $2 billion will serve millions of individuals in a crowded market, and every stakeholder from the 2020 story shares a loyal part of their successful dream.
CosMix was able to successfully launch a token-based fundraising campaign (ICO, STO, and BRO) without knowing a single line of code and suffering from extensive costs. CosMix has managed the entire digital asset lifecycle (primary and secondary) on the same platform with user-friendly and customer-centered tools. CosMix has also benefited from vast marketing and communication exposure through the Tozex community network.
DISCLAIMER: This case study is a hypothetical scenario and for illustrative purposes only. The material has been prepared for informational purposes only. It is not intended to provide legal, tax, investment, accounting, or other advice. The readers should conduct their own inquiries of the adequacy, accuracy, completeness, and reliability of any information relating to issuing a digital asset via an Initial Token Offering (ITO), whether such information is contained in this case study or not. The reader also acknowledges that, to the maximum extent permitted by law, Tozex and its related parties or affiliates each disclaims all liability to the reader or any other person for any expenses, costs, losses or damages of any kind, including direct, indirect, or consequential loss or damage (however caused, including by negligence), incurred by any person arising from or relating to any information included or omitted from this case study, whether by reason of such information being inaccurate or incomplete or for any other reason.