Web3 gaming, token incentives, and deciding between for-profit and non-profit when starting a venture
In this week’s episode of Ventures, my guest Joe De Pinto (Co-Founder of https://www.HasteArcade.com) and I discuss his entrepreneurial journey from being a professional baseball player to starting a Web3 company. We talk about his choice to build on BSV, what that experience has been like, the types of games that are available in the arcade, the marketing strategies his team has used, entrepreneurial lessons learned, Web3 features deployed, and overall thoughts about the promise of Web3.
Non-Profit vs. For-profit
Because I work as closely as possible to “impact” ventures in their earliest stages, I’m often having conversations with entrepreneurs about whether they should start a for-profit or non-profit. This is yet another reason why designing and building a financial model is so important, as it will reveal where your assumptions are around your ability to acquire customers and therefore investors.
If you aren’t able to pencil out a believable financial model (which is what the VCs/angels will want to see and affirm), then it’s possible that large foundations or family offices may be interested. If the impact that you are trying to achieve lines up with their goals, then it’s worth pitching them instead of VCs/angels.
In other words, when you are wildly successful, who will care more? Will VCs or foundations be happiest to gush to their friends and family about the outcome? If you need, say, $20 million USD, who is most likely to give you that amount within an appropriate timeline?
If the answer is foundations, then start a non-profit. If the answer is VCs, then start a startup. And - just because you start a non-profit doesn’t mean you can’t both make money and operate extremely efficiently like a great startup.
Importantly, both directions involve talking with either investors or donors. It takes human relationships to determine whether you are planning to build something that people want. If you keep with the principle of making sure you actually have something that investors or donors want, then you’ll be on the right path.
Finally, there of course is the bootstrapping model. If you can acquire paying customers and that cash can fund your scaling and social impact, then more power to you. If you are building this kind of venture, I’d love to learn more (and - ironically - it will be very appealing to investors, even if you don’t need them).
Have a great rest of your week,