We are thrilled to introduce our investment in Fairmint.
The way in which companies raise capital and interact with their communities is changing. Until now, early-stage companies have had to set aside a time – and even a place – for fundraising from established investors, usually venture capitalists.
While this format has helped hundreds of startups grow, it has a few big drawbacks. For founders, it’s an interruption of normal operations; a pause on daily affairs while money is being collected. For investors, there is a very short window of time during which they have the opportunity to invest in an innovative company. For users, partners, and customers who all play an important role in helping the business grow, there is no opportunity to participate in the financial upside they are helping to create. For employees, navigating equity grants and options exercises is cumbersome and difficult to understand.
Fairmint democratizes ownership in community-driven companies. Entrepreneurs are able to launch a customized portal on their website that allows contributors to receive tokenized equity in exchange for time or money they invest. Contributors can be traditional investors such as venture capitalists, but it can also be a partner who believes in the startup’s mission, a customer who has a ton of confidence in the founding team, or a superuser making their first investment in a startup.
This means entrepreneurs have the freedom to run their business without interruptions for collecting capital. Investors have the flexibility to buy equity when they want. Users, partners, and customers have the opportunity to share in the financial value they help create. Employees can be compensated for their work with equity seamlessly. Because the equity is tokenized, it unlocks the opportunity for liquidity quickly and easily, something that is usually unavailable until the company exits.
Fairmint does all this through a set of innovative Web3 SAFEs. This equity instrument allows people to invest funds at any time to gain access to the tokenized equity allocated to the community. The founders can create the allocation in a few clicks in their admin portal, or create a rolling allocation using Fairmint’s algorithm to adjust the company’s valuation with each new investment.
As a venture fund that targets companies at the intersection of legal and financial technology, we were drawn to Fairmint’s commitment to advancing community ownership in a compliant fashion. They’re enabling companies to enter the blockchain market through smart contracts that turn their equity participation into tokens while ensuring that companies only issue those tokens to qualified investors.
From our perspective, Fairmint’s greatest strength is the way it helps companies leverage their community capital. Between gig economy titans like Uber and TaskRabbit that depend on contract workers to platforms like Airbnb that rely on consumers to double as service providers, there are a host of people adding value to a company who rarely participate in its success. That’s because traditional corporate structures usually reserve equity for high-level executives. Through tokens, equity can be easily transferred between contractors, employees and other stakeholders, thereby breaking down established hierarchies, and resurrecting new, more democratic ones in their place. Ultimately, that allows anyone who helps the company grow to have a share in financial ownership.
Beyond it all, we’re thrilled to work with innovators like Thibauld and Joris, co-CEOs and founders of Fairmint. They like to think of the company as, “the legal and compliance bridge that allows Web2 companies to become Web3 companies.” That’s the kind of bridge we want to be standing on. Their dedication, integrity, and foresight make them a powerful team to lead us into the future of capitalism. Learn more about Fairmint at Fairmint.co.