Why We’re Not Looking for VC Funding
How Liana Banyan’s Economic Model Differs from Traditional Venture Capital
People ask: “Why aren’t you raising venture capital?”
The short answer: Because VC funding is designed to extract maximum value, and we’re designed to sustain it.
The longer answer requires understanding two fundamentally different economic philosophies—and why they can’t coexist in the same organization.
The Core Comparison
| Dimension | Traditional VC | Liana Banyan / IP Load Balancing |
|---|---|---|
| Ownership concentration | Few funds own large equity blocks | Platform 60%, creator ~20%, external capital 20% max, spread across many small stakes |
| Return profile | Power-law, unbounded; a few 100× outcomes drive fund | Per-stake returns capped ($10M) then recycled; no permanent rent streams |
| Control rights | Investors often take board seats, vetoes, liquidation preferences | Platform retains majority; creators choose control tier; external capital has economic rights, not governance control |
| Early vs late entrants | Early investors capture most upside; latecomers pay high valuations | Caps and splitting reopen slots at fair value; new participants get “first-round”-like opportunities even late |
| Geography / currency | Strong-currency investors advantaged; weak-currency founders often excluded | Three-gear currency equalizes internal purchasing power via Credits/Marks/Joules |
| Goal | Maximize financial return to LPs, often via exits or IPO | Sustain platform, workers, and communities; “enough” is encoded in margins and caps |
What VC Funding Assumes
Traditional venture capital operates on a power-law assumption:
- Most investments will fail or return nothing
- A few will return 10×, 50×, 100× or more
- Those outliers must pay for all the losses plus generate fund returns
- Therefore, every deal must have unlimited upside potential
This creates predictable behaviors:
- Growth at all costs — revenue and user growth prioritized over sustainability
- Extraction pressure — margins must expand, costs must be pushed to users or workers
- Exit orientation — the goal is acquisition or IPO, not long-term operation
- Winner-take-all dynamics — consolidation is encouraged, competition eliminated
What Liana Banyan Assumes
We operate on a “enough is enough” assumption:
- Returns should be generous but bounded
- Success should spread to more participants, not concentrate to fewer
- The platform should exist indefinitely, not be optimized for exit
- External capital is welcome, but it doesn’t get to change the rules
This creates different behaviors:
- Sustainability over growth — Cost+20% margin ensures perpetual cash-flow positive operation
- Creator retention — 83.3% stays with creators; we keep only what’s needed
- Recycling over extraction — when stakes hit $10M, they stop earning and slots reopen
- Cooperative governance — 60% to platform means the community retains control
The $10M Cap: Why It Matters
In VC terms, capping returns at $10M per stake sounds insane. “But what if you become the next Google?”
Here’s why we do it:
1. It Prevents Permanent Landlords
Without caps, early sponsors of successful patents become perpetual rent-seekers. They contribute capital once and extract forever. With caps, their returns are generous ($10M!), but then the slot recycles and someone else can participate.
2. It Keeps Entry Open
If early stakes keep compounding indefinitely, late entrants can never catch up. Caps ensure that “first-round” opportunities keep appearing, even decades after launch.
3. It Aligns with “Enough”
At some point, a $10M return on a $1,000 stake (10,000× return) is enough. The system says: “You did great. Now let someone else have a turn.”
How Three-Gear Currency Changes the Equation
Traditional VC excludes weak-currency participants by design:
- Dollar-denominated investments favor US/EU investors
- Weak-currency founders often give up disproportionate equity
- Returns flow back to strong-currency LPs
Liana Banyan’s three-gear system (Credits, Marks, Joules) changes this:
| Currency Zone | What Happens |
|---|---|
| Weak-currency participant | Pays local equivalent, receives Credits + Marks (effort-debt) |
| Strong-currency participant | Pays local equivalent, receives Credits + Joules (stored surplus) |
| Everyone | Same internal stake, same internal returns |
The system absorbs currency differentials without subsidizing weak currencies or penalizing strong ones. Marks and Joules handle the edges; Credits stay at par.
What We’re Actually Doing Instead
Instead of VC funding, we use:
1. IP Load Balancing
- 60% of patent economics to the platform
- 20% to creators (same structure any creator can choose)
- 20% to external sponsors and bucket funders
- Capped at $10M per stake, then recycled
2. Global Sponsor Pool
- Diversified exposure across all existing patents
- Small stakes, broad participation
- Anyone can participate, not just accredited investors
3. Patent Buckets
- Concentrated exposure to groups of patents
- Dynamically rebalanced for fairness
- Funded by Credits and Marks
4. Commitment-Triggered Democratic Funding
- Work commitments open funding windows
- Small backers participate on same terms as larger ones
- No preference shares, no liquidation preferences
The Honest Trade-Offs
Choosing this path has costs:
| We Give Up | We Gain |
|---|---|
| Rapid scaling capital | Sustainable, self-funded growth |
| High-profile VC board members | Full cooperative control |
| Exit optionality | Permanent, community-owned infrastructure |
| Unbounded upside for early investors | Fair participation for late entrants |
| Dollar-denominated simplicity | Global currency-zone fairness |
We’re okay with these trade-offs. The alternative—giving up majority control to optimize for investor returns—would make us just another extraction platform with cooperative branding.
Who Should Fund Projects Like This?
If not VC, then who?
1. Sponsors Seeking Capped, Recycled Returns
People who want generous returns ($10M cap is generous!) but don’t need unlimited upside. Think: high-net-worth individuals, family offices, impact investors.
2. Members Funding with Participation
Platform members who fund buckets with Credits they’ve earned through work, then benefit from IP they helped create.
3. Foundations and Grants
Organizations funding economic infrastructure, not seeking financial returns.
4. Revenue from Operations
The platform runs cash-flow positive from day one (Cost+20%). Growth is funded by operations, not by burning investor capital.
Conclusion
VC is built on uncapped, winner-take-most power laws.
Liana Banyan is built on capped, recyclable, cooperatively governed flows where both capital and creators are constrained by “enough” and encouraged to keep the infrastructure open.
We’re not anti-capital. We welcome sponsors, bucket funders, and anyone who wants to participate in IP economics. But we cap their returns, spread their ownership, and keep control with the community.
That’s not a bug. That’s the entire point.
Further Reading
- IP Load Balancing on the Ledger
- Patent Buckets FAQ
- How the Considered Approach Integrates with IP Load Balancing
- I Built an Aircraft Carrier to Launch My Plane
For questions, contact: Support@LianaBanyan.org