Distributing returns to investors.

  • MHB
  • Thread starter saransh
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In summary, the problem is that the organizer wants to give different percentages of the return to different investors, but can't because some of the early members (who invested with stakes) are asking for a bigger share.
  • #1
saransh
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I have a problem let's say where I am organising a crowdfunding exercise I have distributed early membership to people say as some Stakes S. Now there are two groups one who holds membership and non-member.

When one raises fund through crowdfunding exercise one promises a return of fixed 10 % return on the net profit they make or sales they make to all of the investors.

Now I am not able to justify the division of the above 10 % to every individual investor because I have some group of investor who has early membership stakes S where they can demand some extra cut from the return.

how do I differentiate between both of them.

One way of solving this as I see is in the given latex.Let c be the coinsOwned by the user, m be the money invested by the user \ where totalSupply of coins is t, \ y is the totalAmountRaised so far.

$Total\ Stakes$(S$_{i}$) = $\frac{c_{i}}{t}$ + $\ \frac{m_{i}}{y}$ $ $
Above equation yields the total percentage of the stakes S in the crowdFunding where one can use S as.
$Tokens\ ( T_{i}) =\frac{S_{i} \ \times \ y}{100}$

Let y be the amount to be raised in the crowdfunding , let R be the returns every month to the investor.

$R=\ T\ \ $

I am pretty much confused (maybe I can use some weight also to assign to every investor)
 
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  • #2
I think you have a right to be confused!

"Crowd funding" for what objective? What are you selling? Where do the profits you want to distribute come from? What are these "coins" you refer to?
 
  • #3
Country Boy said:
I think you have a right to be confused!

Yeah , you think so. After every confusion there needs to have clarity and if confusion arises then clarity is waiting just after confusion.

"Crowd funding" for what objective? What are you selling? Where do the profits you want to distribute come from? What are these "coins" you refer to?

Crowdfunding platform for developers to raise funds.(For development Purposes.) I am not selling anything . People will sell on my platforms. So basically startups will create their tokens and then they would distribute a fixed percent say 10% of Royalty every year per month to investors who has invested in the project.

Coins are basically tokens in the language of ETH.

I hope this answers your questions. Think KickStarter on Blockchain . I hope now we can proceed ahead towards clarity.

Thanks
 

FAQ: Distributing returns to investors.

What does it mean to "distribute returns to investors"?

Distributing returns to investors refers to the process of giving profits or earnings back to the individuals or entities that have invested in a company or project. This can be in the form of dividends, interest payments, or other distributions of profits.

How are returns distributed to investors?

Returns can be distributed to investors in various ways, depending on the type of investment and the company's policies. Some common methods include cash dividends, stock dividends, and share buybacks. The distribution process is typically outlined in the company's bylaws or shareholder agreements.

What are the benefits of distributing returns to investors?

Distributing returns to investors can provide several benefits. It can attract new investors by demonstrating the company's profitability and potential for growth. It can also increase investor loyalty and trust, leading to a more stable shareholder base. Additionally, it can provide investors with a source of income and potentially increase the value of their investment.

Are there any risks associated with distributing returns to investors?

Yes, there can be risks involved in distributing returns to investors. If a company consistently pays out a high percentage of its profits as dividends, it may not have enough funds to reinvest in the business for future growth. This can limit the company's potential for long-term success. Additionally, if a company relies too heavily on external funding, such as taking on debt or issuing new shares, it can put them at risk if there is a downturn in the market.

How can companies determine how much to distribute in returns to investors?

There is no one-size-fits-all answer to this question, as it ultimately depends on the company's financial situation and goals. Some companies may choose to distribute a fixed percentage of their profits, while others may base their distributions on their cash flow or earnings per share. It is important for companies to carefully consider their financial health and future plans when determining how much to distribute in returns to investors.

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