Money. That’s what fundraising is all about, right?
Sure. Someone seeks capital for business and someone wants to invest money in order to profit from it in the future and that’s it. But the devil is in the details and this devil we are dealing with will be a lot rougher than the meanest enemy you might encounter in Doom.
After the campaign itself ends, the company needs to build constant and effective communication with shareholders which is not an easy task even in the digital era. That’s why we are working on building efficient post-campaign management tools and in this article, we would like to present them.
Tokenomica aims to help modern companies eliminate excessive paperwork and automate back office. Our platform allows companies to create the code for the execution of your plans and also automatically creates the necessary legal documents that will legitimize the established restrictions, as well as the execution of token holders’ decisions.
As a result, we would like Tokenomica to become more than just a place to issue your tokenized security and raise funds. We see Tokenomica as a platform that will help companies run their businesses without being concerned about the legal side of securities management. Putting it shortly, we would like you to feel that your regular corporate secretary was replaced by Inspector Gadget.
Of course, the development of such a complex system can’t be done in a blink of an eye. First, we will launch three basic features — voting, dividend payouts, shareholders list management, communication with investors. Let’s take a look at them.
In the traditional system, shareholders’ voting process is conducted once or twice a year. The reason for it is that voting has to be conducted at a certain time and place. While on Tokenomica, each shareholder can take part in a voting process from anywhere.
Conduct as many votes as needed, requirements are specified in the code of the smart contract. On our platform, the issuer customizes which actions require the participation of shareholders and what can be considered as a quorum.
When it comes to voting, the issuer sends the agenda to shareholders. Shareholders have several options:
1) Accept the agenda fully;
2) Propose new item to the agenda (must be accepted by the majority of other shareholders);
3) Vote to accept the new items to the agenda.
When the voting day comes, all shareholders receive the bulletin, in which they vote on items. Information about the vote is recorded in the blockchain so that all shareholders can check the results with actual votes. Our goal is to make voting as decentralized as humanly possible.
Dividend payouts are highly important to all shareholders. The issuer is able to pay from shareholders using Tokenomica account at any time. The process is simple, the issuer sets new payment in the system and the platform calculates the amount needed to be sent to each investor based on the number of shares. Shareholders will receive money on their Tokenomica account.
There are two communication features available in the issuer’s profile as well:
1. Post updates on your campaign’s page
All issuers are able to post their company news and updates on their designated Tokenomica page. This feature enables to issuer to communicate with shareholders after the campaign.
2. Email Newsletters to Shareholders
Additionally to updates, issuers are also able to communicate with shareholders only. You can create a new letter to shareholders at any time.
As we have said before, those are only the basic post-campaign management tools but there are also other features that are currently in development.
Cap Table Management
In short, the cap table is a brief summary of all the details of the investors’ and founders’ percentage of ownership in the company, the equity dilution and also the value of the equity at each investment round.
— Yeah, yeah, I can use Excel for this.
— Not that easy. If you think that the cap table is just a simple spreadsheet on Excel holding the shares each person holds for your company, then you are in for a surprise. This is just the tip of the iceberg.
Many people take the cap table as something as simple as just a representation of every transaction of the company from the incorporation of the company. However, the cap table is actually made of several legal documents and transactions. In short, you would find the following things in a cap table:
- Exercises of options
- Conversions of debt to equity
- Stock issuances
In short, it gets pretty complicated and a spreadsheet does not have the power to show this accurately.
The management includes recording transactions, drafting and signing legal documents, complying with regulations, communicating with shareholders and a few other things. On Tokenomica, we want to include all of these things automatically, in order to automate the cap table management for businesses of any size.
Wait, but what if I had shares issued before the campaign on Tokenomica?
Not going to be a problem, our cap table management feature will be available for all companies even for those that didn’t have a campaign on Tokenomica.
Cap table management is a massive topic and we will, of course, talk a bit more about it separately in our next articles.
Employee Stock Ownership Plan (ESOP)
An employee stock ownership plan (ESOP) is an employee benefit plan that gives workers ownership interest in the company. ESOPs give the sponsoring company, the selling shareholder, and participants receive various tax benefits, making them qualified plans. Companies often use ESOPs as a corporate-finance strategy and to align the interests of their employees with those of their shareholders.
So basically, ESOP is vital to every startup there is but in order to build a compliant and legal ESOP, you will need to spend a fortune on legal costs and spend several months completing the process.
We are developing an automatization tool for that as well. The feature that is currently being developed allows issuers to create stock option plans for employees in just a few clicks.
Options are issued on the platform, just like tokenized securities. Then the issuer invites employees to the platform, where they are able to claim their options, at the same time, we automate all the legal work for the issuer.
In the future, employees will be able to convert their options into tokenized shares on Tokenomica. Again, the process is fully automated and requires zero paperwork from the issuer.
And even those tools won’t be everything there is in regards to post-campaign tools. We will be working further in order to create the best infrastructure for your business.