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DropDeck is a funding platform that runs on the Ethereum blockchain because it requires this blockchain's features such as smart contracts, payment, consensus mechanism and its own digital token named DDD (Decentralized DropDeck). DropDeck is shaping the most innovative solution to address all existing issues in cross-border business funding for startups and SMEs, by issuing digital tokens and deploying smart contracts to incentivize all token holders to collaborate with each other and complement the A.I. development. The outcomes are 1) fundraising companies are as accurately scored and ranked as possible so that funders can put their money to optimal use, and 2) all participants in the ecosystem are financially incentivized to help funders get rewarded, so that funders can keep funding and attract more funders to join the ecosystem.
Companies from all geographies can submit information to the platform according to standardized funder-centric formats, or local agents called Hunters can help do so. Funders screen fundraising companies based on scores, and can select local agents called Delegates in the geography of the interested company to assist in further due diligence. After conducting full due diligence, the funders are ready to make the loan. The Delegate is required to enter into a legal arrangement with the funded company in order to enforce the repayment. Funders then make a payment in DDD to a smart contract. This smart contract involves the funders, the funded company, and the Delegate, so that the Delegate only gets paid if the funded company pays back. The Delegate receives either a percentage of the repayment amount, or a fixed amount held in escrow by the smart contract.
The loan can be paid back in the form of simple amortization with regular payments, or via royalties or with other amortization schedules for companies who are not generating consistent cash flow yet. The DropDeck reputation system encourages funded companies to pay back in order to attract further funding in the future, and encourages Delegates to protect the funders’ interests in order to attract more clients. The Decentralized DropDeck Token (DDD) will be issued and distributed to serve as the ultimate reward for all participants in the funding value chain (Delegates, Hunters, Evaluators, etc.). Since DDD's value reflects the overall success of funders and fundraising companies on DropDeck, every participant must collaborate in the best interests of each othe r (e.g. evaluate companies accurately, enforce repayment) and of DropDeck (e.g. contribute data to make scoring algorithms smarter) in order to increase the value of their rewards.
DropDeck helps funders allocate capital to the most deserving companies while being informed of these companies’ “Potential scores”, which reflects the degree of risk and potential in terms of profitability. For the underwriting part of the loan, the fundraising company and the funders can propose the terms (interest rate, royalty, schedule, etc.). DropDeck also makes suggestions with its A.I. algorithms. One or many Delegates consolidate information to make final proposals. The funders and the funded company who have “skin in the game” will come to a consensus to choose a proposal and the according Delegate to carry out the terms.