Accelerator or Merchant Cash Advance: What’s The Next ‘Add-On’ Target for DigitalAMN’s PAI Ecosystem?

June 12, 2020
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DigitalAMN is an acquisition and business developer of startups, development stage companies and established businesses; building an ecosystem that promotes economic growth, social empowerment and financial literacy, within the business and investment communities. 

We strongly believe in doing well, while also doing good. Therefore, we didn’t have to wait for Covid-19 to claim that we care about the health of small business; nor the social outcry over the heartbreaking murder of George Floyd to state that we believe in equality. We have always been clear that there can be no social justice without economic justice. And I strongly believe in economic justice for all people of the 99% – Black, White, Democrat, Republican, Gay, Straight, Monogamous, Polyamorous, Christian, Jewish and everything in between.  

Our primary altruistic goal is to mend divisions. Our primary business goal is to build scalable and sustainable economic value for our stakeholders.

We do the former by empowering everyday people to become financially literate, economically healthy and socially aware that regardless of who they are, if they are not part of the 1%, they are firmly in the 99% and shouldn’t be fooled into thinking otherwise. We do the latter by building a portfolio of businesses that contribute to DigitalAMN’s revenue, equity portfolio value, liquidity value proposition and the breadth of our  PAI ecosystem – which is why Inc.com’s author, Molly St. Louis declared it “one innovational masterpiece that’s a joy to watch.

But between you and I… the PAI (Public Accelerator-Incubator) ecosystem has been like climbing a mountain with a piano strapped on each of our backs. Creating an environment that solves the problems faced by underserved startups, illiquid angel investors, and everyday people that are excluded from the investment process is without question, a Herculean task. Add to the top of that, delivering quantifiable value to shareholders while trading as a penny stock in the microcap market, and we’d have to embody ATLAS to carry that world of pressure.

I’d have to say that I believe we’ve done well so far. We’ve worked diligently over the past three years to develop a viable ecosystem that functions as a ‘one-stop-shop’ for a company’s “Launch to Exit” business journey. So far, our ecosystem is comprised of:

  1. Equity Crowdfunding – helps ensure DigitalAMN can accelerate capital to startups and development stage companies, while providing  private investment opportunities [early access] to everyday people that they would not normally see, at a generally affordable investment amount;
  1. Reg. CF and Reg. A+ Marketing Specialist – helps ensure that startups and development stage companies can raise as much money as possible from their Reg. CF (Regulation Crowdfunding (equity crowdfunding)) and/or Reg. A+ (Regulation A+) fundraising campaign; and,
  1. ‘Members Only’, High-Net-Worth Global, Private Investment Group – helps ensure that companies have a direct and well-established line to affluent investors who can satisfy mid and long-term capital needs during the later years. 

Now, do not get me wrong. Even these ventures in many ways, are development stage companies themselves. Nonetheless, each participating component gives the PAI ecosystem the ability to develop and support both the growth and capital needs of our client companies at various stages of their growth.

So what’s next for our expanding ecosystem? We believe that both a traditional Accelerator [think Techstars] as well as a Merchant Cash Advance (MCA) type of platform, would perfectly complement our PAI. It would be foolhardy to try and align with both simultaneously, so we have to decide what is needed most at the present moment. This is where we are requesting your assistance.

Let’s start with the latter…

First of all, I am not a fan of most MCA platforms because I’m of the opinion that they tend to strangle companies, which runs counterintuitive to my philosophies. This could make finding the most appropriate platform for our ecosystem quite difficult. However, if we could secure a relationship with a suitable MCA, we’d be able to significantly reduce the ‘risk capital’ that DigitalAMN makes available to every client company. The benefits here span from accounting, to compliance, to capital needs, to ROI, to client quality control. This would eliminate our need to come out-of-pocket to cover the early development cost of our client companies; ultimately helping to stabilize and strengthen our overall financial position.

The traditional Accelerator: Our co-founder is a Techstars alum and we were fortunate enough to speak with Mr. David Brown (Founder and CEO of Techstars) about the development of our PAI model. Therefore, great consideration was given to the idea of us building and operating like a traditional Accelerator. We concluded that it didn’t make sense for us at that time. Likewise, it might not make sense for us now. There is however a minor caveat that we naively overlooked: assuring that the client companies we committed [risk] capital to, were well-positioned to quickly and effectively develop a community of ‘first adopters’ and financial supporters to mitigate our risk. 

So in this case, if we could secure a relationship with a suitable traditional Accelerator, we’d be able to both offer a staple service in the startup world, while better mitigating our risk by ensuring that our client companies, no matter how seasoned they believe themselves to be, are in fact ready to meet ‘the crowd’ and build their community of support. The benefits here are tremendously impactful to our client company’s short-term capital formation, the mid-term of business growth and long-term capital formation; all equating to a greater overall revenue stream to DigitalAMN and a more valuable asset in DATI’s equity portfolio.

Just an FYI, we believe we’ve identified a viable prospect in each category. The question is this: Which should we focus on first and why?

We would like to hear from you. What would you suggest… should the next component added to the PAI ecosystem be a traditional Accelerator or an MCA platform?

By Ajene Watson