- October 2, 2017
- Posted by: Ajene Watson
- Category: Blog
Accelerators, angel and early-stage investors alike continually run into the same exact problem: liquidity, or more precisely, the lack of liquidity. Investing in private startups is questionable and often times painful for the investor; it also slows the funding process and reduces the amount of capital pools available for startups.
The Public Accelerator Incubator (PAI) model addresses this issue head on, giving accelerators, angel and early-stage investors access to liquidity nearly 8 years earlier (on average) than they would have received otherwise (typically, when these startups finally go public or are acquired).
Moreover, this PAI model cost investors nothing! They don’t pay anything extra; they lose nothing and don’t have to share anything with anyone.
From 2002 until November of 2007, I developed and managed the investment strategies and products of stock lending firms, private investment groups and merchant banking operators focused primarily on the microcap markets. At that time, my only concern was the immediate return for the fund. Heeding the call of my mother to do something more productive for society, after her passing in November 2007 I decided to shift my focus on helping these same fledgling companies that I was funding (all trading on the OTC marketplace). Believe it or not, this was a difficult and costly transition but a much more admirable and consciously rewarding endeavor.
During that time, I discovered two major problems. First: generally speaking, microcap markets are simply not conducive to a development stage company’s success. The second problem: microcap shareholders bear the brunt of the hurt from a marketplace marred by toxic influences. The experiences gained over the past nine years since the launch of my consultancy firm, lead me to one conclusion: There Has To Be A Better Way.
Digital Arts Media Network, Inc. is the initial rollout of a venture referenced as a Public Accelerator-Incubator. Dubbed the “PAI” by a Techstars alum, the platform allows a private startup company to be guided through the various stages of growth, whereby the PAI can accelerate, incubate, acquire and lastly spinout a company; a complete veer away from the standard accelerator or incubator model.
Most importantly, the PAI is not a competitor to well-known accelerators/incubators like 500 Startups and Y Combinator. No, it is actually an add-on – a compliment to the most successful accelerators around the world. This is what makes Digital Arts Media Network, Inc. so very unique.
Digital Arts Media Network focuses primarily on one thing: accelerating the capital raising process for startups by accelerating the liquidity process for angel and early-stage investors. It’s a win-win model
Back to basics. Given my affinity for the microcap marketspace, what does the startup eco-system have to do with me finding “a better way”? One of the reasons that microcap investors bear the hurt of a toxic system is because there are rarely any viable opportunities trading on the OTC exchange platform. Likewise, the same investors have little to no chance of ever seeing a Snapchat or Uber during the Pre-Seed, Seed and A funding rounds of those companies when they are private startups. Even if they did, microcap investors most likely would not be invited to invest in such startups, even if they qualify.
Digital Arts Media Network (DATI) offers its shareholders the opportunity to participate in the ownership of private startups that are poised to become the next Snapchat and Uber of the world. This does two things: first, it creates an opportunity for these microcap investors to participate in the startup eco-system in a meaningful way; second, it affords these same microcap investors the ability to be a shareholder in a public company whose value proposition is based on an increasingly growing basket of equity collected from the portfolio of startups that we acquire in exchange for accelerating the capital raising process for these startups.
As the first Public Accelerator Incubator launched, Digital Arts Media Network is the first step to making investment opportunities more equitable for the common person. DATI will give microcap investors access to the startup ecosystem in a meaningful way while setting a precedent for what an OTC Markets company should resemble.