Through the people in my daily life, I see many using various methods to make a few extra bucks via apps. The most popular, by far, are sports betting apps. It doesn’t really matter which one—FanDuel, DraftKings, BetMGM—they often create new accounts to take advantage of new member incentives, like "bonus bets," where you place a bet, and if you lose, you’re refunded up to the advertised amount.
Sports betting isn’t new; in the past, you’d have to go to a casino or a bookie. The only difference now is that you can place bets from your couch. I guess you could also do it over the phone before, but the point remains.
My point here is that people aged 21-29 are used to juicy onboarding incentives and quick, simple returns. The only "gamification" is your account balance and watching the games.
Online lottery apps make playing scratch tickets, the Powerball, KENO, and other instant-win games super easy with direct deposits through a connected bank account. It’s surprising to see this vertical gain traction, especially since it’s government-sponsored. But with the Massachusetts State Lottery bringing in over six billion dollars last year, I guess it’s no shock they’re going digital.
Sports betting, in particular, has social aspects similar to crypto-native projects, gaining traction through word-of-mouth and shared bets. There's a research phase before betting, where you can see stats on how many people are picking a side and how much money represents confidence levels. In crypto, it’s the same, except the two sides are buyers vs. sellers, pitting bettors against each other.
Now, you might ask, Jack, how does this relate to on-chain fundraising?
It’s all about social capital coordination, something we see actively in sports betting and shared fantasy team ownership. The outcome isn’t left to pure chance, like a coin toss or card draw; there’s thought involved, though the final result is out of the bettor’s hands.
Similarly, when investing in a company or industry, there’s a process of researching the team, track record, and progress. Bettors follow a similar process when making picks.
With on-chain fundraising, I believe social capital coordination goes beyond financial pooling. Investors become early adopters, advocates, marketers, and, in a way, the product’s executive board.
Here’s how I see the startup fundraising model being flipped:
Proof of Commitment: Demonstrating sweat equity through a functioning MVP signals to investors that the founder is serious and capable. It reduces perceived risk because there's already a foundation to build on.
Value-Progress Correlation: The amount raised should align with the product's maturity. This allows investors to see clear potential returns based on progress, not just promises. Early investment should cover essential hires, like designers and marketing, to ensure the product can scale.
Investor Trust: Investors trust founders more when they’ve already invested significant effort and resources. Only raise funds for tasks outside the core contributor’s skill set to accelerate growth.
Transparent, Phased Funding Rounds: Break fundraising into smaller, milestone-based rounds so only immediate needs and tasks are funded. Investors will know exactly where their money is going. You could even break it down further into sponsoring bounties for specific tasks. Start with funding immediate needs and plan subsequent rounds based on progress.
In the same way sports bettors and crypto participants rally around their chosen outcomes, startup founders should leverage social capital to fuel their product’s growth. By showing real progress, aligning fundraising with product maturity, and involving investors as more than just check writers, the traditional fundraising model is turned on its head. Investors become true stakeholders, not only contributing financially but actively advocating for the product. The future of on-chain fundraising lies in this blend of transparency, trust, and strategic social coordination—because at the end of the day, it’s not just about raising money, it’s about creating momentum.
