VelVet: How to Invest in Your Favorite Places and Make Money
We all love discounts. But we love deep discounts and useful bonuses even more. Anatoly Belichenko, a master’s student at the Department of Tech Management and Innovations, founded VelVet to allow users to invest in the places they patron daily. In return, the investors will get big discounts and way to monetize them. Now Anatoly is preparing VelVet for Initial Coin Offering (ICO) to raise $10 million and is also working on his thesis on the marketing mechanisms to achieve that goal.
Why invest in companies you use
A VelVet user can invest in any company he or she uses. For example, you can invest 5,000 rubles in a sports club next to your house, 10,000 - in a favorite cafe at work, another 5,000 - in the quest room, where you go with friends on weekends. This amount is a prepayment (deposit) of a service or an institution's goods that a customer can receive. In exchange, the institution will replenish the deposit with an additional amount as a bonus. The larger the deposit amount, the greater the bonus. And if for some reason the user can’t or won’t spend the deposit, they will be able to sell it with a profit. But the question arises: why bother at all? Is it not easier to use discount cards or pay for services rendered?
There are several differences. The main idea of the service is not just to give the user a new way of saving, but to give him the opportunity to make money on a discount. Investors will be able to sell their deposit in parts or entirely to other customers of the establishment. Suppose you deposit an advance payment of 5,000 rubles into the account of your favorite coffee house. The institution gives you a certain bonus, for example, 20%. And now you have six 6,000 on your account. Then a visitor comes to this institution, who does not have a discount card of the cafe and wants to just have coffee. His check is 600 rubles. If he is a VelVet user, he can buy the right to use your deposit and pay his bill, by paying you say 550 rubles. Thus, it turns out that you, as an investor, have shared with the buyer the bonus (discount) received from the establishment for your investment, and also earned 50 rubles on this visitor. It's like you would give him your discount card, and he thanked you with money.
Thus, a marketplace with three participants is formed: institutions that get the opportunity to attract funds from investors, investors who invest to make money, and users who can save thanks to investors. There are quite a few retail business areas with high margins or establishments that provide services without a clear cost price, which can give significant discounts on their services in exchange for loyalty in the form of prepayment. That is why VelVet users will be able to receive discounts.
"Basically, we’re giving establishments an opportunity to attract financing without intermediaries such as banks that they can pay for not with money, but their services. And the clients of these establishments are allowed to invest money not in some mythical brand listed on a stock exchange, but in the institution whose services they use and can assess their quality not by dry reports, but personally. The described possibilities are just the beginning. We already have a clear understanding of the development of VelVet: from booking a table in a restaurant to the possibility of mutual lending by participants," commented Anatoly Belichenko.
What’s in it for companies
The main benefit of the establishments from the use of VelVet is the opportunity to attract financing from a wide range of investors who are ready to become partners in the institution, sharing risks with it. The fundamental difference from a bank loan is that the institution does not pay back the loan with money. All invested funds are prepaid services. Also in the future in the application will be automatic payment, buying on credit, booking tables.
"For the various companies we work with, these bonuses are very important, so we quickly find a common language with new partners. In addition to obvious financial benefits, VelVet partners get very loyal customers, which is also beneficial in the long term. We are considering the possibility of prior investment, that is, before the institution itself is open. That is, for example, you learn that your favorite sports club is opening a branch next to your house. You invest in it in advance and immediately receive bonuses as an investor. Our analysis of the discounts provided by organizations gives grounds to state that this type of investment can be more interesting than any offers from banks. Plus, of course, there is also a game effect,” commented VelVet’s co-founder.
It is also planned that with the help of the application, partner companies will be able to better track the conversion from their advertising. Instead of using the usual promo codes, customers will be offered to immediately leave a deposit with a particular company and get big bonuses for it. Thus, you can immediately monitor the effectiveness of advertising in the Internet environment: for example, how many people clicked on the link and made a deposit. In theory, the same mechanism can work for offline advertising: for example, a billboard may contain a QR code, a unique link that you need to go to make a deposit and get bonuses. In this case, you can also consider the conversion of even street advertising. According to Anatoliy Belichenko, VelVet offers a new tool for calculating conversion that can be used by marketers.
ICO and legal review
“At the heart of VelVet is the philosophy of decentralization, which was later preached by" blockchainers,” who say that, for example, if Facebook worked on a blockchain, the profits would be received by all token owners not just Mark Zuckerberg. Now we are working on the details of the ICO, the financial model and the token logic. The difference between our ICO and the absolute majority held today is that the collected money will go as capital to the investment fund, where it will be stored in a basket of crypto and fiat currencies. This will make the portfolio balanced and protected from jumps in the exchange rate of a particular currency,"Anatoliy Belichenko said.
The fund will finance the initial investments in the institutions necessary for a large-scale launch of the project. Only a small part of the collected funds will go to marketing and software development.
VelVet plans to release two types of tokens, one of which will be profitable and will collect the a share of the project's profit, which investors will be able to use at their discretion. The revenue token will be issued only at the time of the ICO. The amount that each investor will receive will be proportional to the amount of funds collected at each stage of the ICO to the funds contributed to the investment fund. The second type of token is the operating one. It will be back by the money in the fun. After the ICO, it can be exchanged for any currency. All transactions in the project (investments, loans, input and withdrawal of funds) will be carried out exclusively through operating token.
VelVet as a Master’s project
Working on the development of the ICO campaign for VelVet became the basis for the master's thesis of Anatoly Belichenko at the Department of Technological Management and Innovation. The topic is: "Development of a marketing strategy for taking a company or a new product to ICO." Modern topics are already examined from the scientific side: it describes what ICO is, what marketing tools can be used for this.
"Of course, all work is built on the example of our ICO, since it is impossible to give universal advice on such a campaign absolutely for any project. In any ICO it is important to explain to investors what product they invest in, what they will get from this. Therefore, the marketing strategy for each product will be unique. In my work, I describe the methods and strategies that will be applied to us. In addition, ICO is still ahead - let's see how our technologies show themselves, “ the student noted.
The marketing strategy of attracting investments for VelVet is aimed at a narrow but more qualitative circle of investors. So, it is planned to post information about the application on thematic blogs about ICO, block. Interested users will switch to the VelVet Telegram channel, where you can learn about the history, mission, functions of the project, and subsequently - about the opportunity to invest in the company.