Hyderabad: Start up founders are often apprehensive of equity dilution. But in a novel attempt, VeeU – a new image based social network which is all set to be launched, came up with an idea of giving away equity to companies in a competition.
Equity means ownership interest for business and as a norm, start-ups organise their equity into two main classes common and preferred stock. Then there is a third alternative in the form of options and warrants such as employee stock ownership plans.
Taking a different path, the UK based company VeeU has put up one per cent of the company’s equity in a competition which is free to enter and the winner will then own a stake in the upcoming social network.
One can enter the competition as soon as the app is available. The platform is all set to be launched in couple of months.
To enter the competition, the users will have to refer one new user to the app and for every one new user they refer, they will earn a ticket in the equity competition.
Mike Clare of VeeU said: “In terms of the idea itself, for using the app in the same way that you would use other social networks, you are rewarded with vouchers or products by earning an in app currency.”
“We basically allow users the chance to expand the reach of their posts. If you post to Facebook or Instagram, 99.9 per cent of the time, it will be the same users who are seeing your posts. VeeU allows users to have their posts looked at by people outside their usual circle. It’s a great opportunity we feel! We are not saying that we are going to be anywhere near as big as the following but imagine if Facebook, Twitter, Instagram, Snapchat offered one per cent equity of their company before launching, someone would now be a very lucky person,” he said.
“It may be mentioned here that Facebook founder Mark Zuckerberg way back in 2015 announced that he would keep 1per cent of shares in Facebook and donate the rest, so even one per cent means very huge,” the VeeU team said.
The team of five claims that even though they are not anywhere nears the big giants, this would be a referral mechanism to onboard users.
“At the moment, the following link veeu.co allows interested people to enter their name and e-mail address,” said Mike.
VeeU team built from five individuals, three from England, one from Israel and one from India are gearing up for the launch of the app on both Android and iOS. It has over 600 people waiting for the launch and this number is growing each day.