RE: DHF Investment Idea — WeAreAliveAndSocial

I like this idea a lot, for three reasons. It promotes Hive and gives it "real world" applications. It can tie in with some of the Hive Dapps which run payments etc (it's a shame Distriator seems to have fallen by the wayside). It is a more useful thing to do with DHF funds.

But now I'm going to play Devil's Advocate. How do we assess the potential businesses ? Hive is notorious for it's user's total blindness to normal business practices, and relying on votes by people who have no idea what a business case is or how to read a P&L is a scary idea. How do we identify and weed out those who just want to rip capital from the DHF and then disappear without trace ? What happens if we fund a business which does it's best but still fails though no fault of their own ? How do we stop the whales from just prioritising their own mates at the expense of ordinary Hivers ?

My first thought was to have smart contracts enabling collateral to be placed in escrow accounts. But if someone has an asset like that, why can't they just liquidate it and use that to fund the business ? For smaller investments, I can see the benefits of a smart contract that enables the DHF to lock in someone's HP or HBD savings so they can't be moved out of HIVE while the debt is still outstanding (but can still use the HP for curation etc).

So overall, I really like this idea, but we'd need to find solutions to ensure it is operated fairly, with low risk to Hive funds and with safeguards against bad actors who'd inevitably see it as a source of free money to take.

I will try and respond to your questions in order,

Assessing a businesses potential would have to be proven by the person who is trying to get it started. They would provide a business plan with data and outlines for the potential profit of their idea.

I'd imagine it would be done similar to Dragons Den, where multiple people listen to the proposal, and decide whether they are satisfied with the persons idea enough to fund it. Really, there should be people in charge of the funding department with a proven track record of running businesses who can mentor and help the person if needed, as a way to ensure the business doesn't go bust.

I would be happily provide personal information of myself, and I think anyone doing this should also have to, if they want to gain funding. Also, so the person doesn't run away, I have an idea. I'm in Ireland, so if I signed a contract with another Hive user from Ireland, who is standing in as a representative of the DHF. Then if I default on the contract, they can take me to court.

Having a stand in from the same country as the business owner, would mean we would have a representative of the DHF in the same country, so it would be easier to take legal action (if ever needed)

If a business goes bust there isn't much fall back, as there wouldn't be in the real world. Because it's in the best interest of Hive to keep the business running, people should be there to help in whatever way they can to stop the business sinking. If it sank, it would just have to be liquidated and any money gained from that would be given directly to the DHF as reimbursement.

There's no way to guarantee whales wouldn't do that, apart from general trust, transparency and responsibility by those with a large stakes.

I was thinking of the money being placed in escrow too, and unlocked as it is required, when it is required, rather than just handing someone a stack of money and wish them luck. In my case, I would need equipment to open, so I could potentially find the things I need, send it to a representative who could then buy and have the items delivered to the shop.

The way I'd personally look at something like this, is, I'd make more money in the long run by running a successful business as opposed to just taking a lump sum and running. I know some people out there could be bad actors though, so funding would have to be granted based on trust and gut feelings. If somebody just shows up on chain with their hand out, it's safe to assume they may be trying to pull a fast one.

The idea of funding startups is thinking outside the box, and is a way to gain a return on investment for our ecosystem here. Crypto sentiment is so low now that it wouldn't be a bad idea to go traditonal, rather than focusing soly on tech alone.