Each campaign on Republic is a public offering of securities, meaning that the company is offering the public to purchase their securities.
The terms of both the securities (i.e. the Crowd SAFE) and of the way the company is selling these securities. The deal terms include:
If the startup is using the Crowd SAFE as the security, the deal terms include the terms of the Crowd SAFE: valuation cap and discount.
Each company running a campaign on Republic is legally an issuer of the securities they are offering for the public.
Angel investors invest in small startups or entrepreneurs. Often, angel investors are among an entrepreneur's family and friends. The capital angel investors provide may be a one-time investment to help the business propel or an ongoing injection of money to support and carry the company through its difficult early stages.
A Capitalization table is a spreadsheet or table, typically for a startup or early stage venture, that shows capitalization, or ownership stakes, in a company, including equity shares, preferred shares and options, and the various prices paid by stakeholders for these securities. The table uses these details to show ownership stakes on a fully diluted basis, thereby enabling the company's overall capital structure to be ascertained at a glance. Founders are usually listed first, followed by executives and key employees with equity stakes, then investors, such as angel investors and venture capital firms, and others who are involved in the business plan.
A convertible note is a type of loan issued by a company that can be converted into stock. Convertible notes traditionally have an interest rate and maturity date. Convertible notes are different from convertible bonds because notes are unsecured; in the event of bankruptcy, the debentures are paid after other fixed-income holders.
In the event of a trigger event, Crowd SAFEs can be converted into either Shadow Shares (in the event of an equity financing) or into common or preferred stock or their cash equivalent (in the event of an IPO or change in ownership).
Equity financing is the process of raising capital through the sale of shares in an enterprise. Equity financing essentially refers to the sale of an ownership interest to raise funds for business purposes.
Under the Crowd SAFE, a Liquidity Event occurs when the company becomes a publicly traded company through an Initial Public Offering (IPO) or has a change in ownership caused by a change in the majority shareholder. A liquidity event causes a trigger event with respect to the Crowd SAFE.
a contractual agreement between a company and an investor that bestow upon the grantee the right to a cash payment at a designated time or in association with a designated event in the future, which payment is to be in an amount tied to the market value of an equivalent number of shares of the startup’s stock.
Caused by a Liquidity Event, when the Crowd SAFE converts to stock or a cash equivalent.
When a company issues convertible equities of some kind (such as a Crowd SAFE), the instrument will have the option to “convert” into the newly issued securities at a pre-set “discount” to the price of the follow-on round. These discounts typically range from 15 to 25 percent. However, in order to provide investors with some of the protections of a priced round, they add a “cap” to the valuation. The “cap” sets the highest valuation that can be used to determine the conversion price of the notes.
Venture capital firms provide financing to startup companies and small businesses that are believed to have long-term growth potential. For startups without access to capital markets, venture capital is an essential source of money. Risk is typically high for investors in venture capital firms.The downside for the startup is that these venture capitalists usually get a say in company decisions in exchange for their investment.
The ability to vote on corporate decisions, voting rights are only for stockholders; however most startups have a majority shareholder whose vote carries all decisions, making voting rights of little value.
Securities in which the company must repay the lender original lender’s contribution at maturity plus interest, with payments based on a set percentage of revenue.
Securities in which the company must repay the lender’s original lender’s contribution at maturity plus interest, with payments based on a set percentage of a defined profit, with a triggering profit margin.
A blockchain companies public sale of tokens not on Republic, which is advertised to the general public, even if there are limitations on who can invest.
A digital unit of measurement which can be used on a blockchain company’s protocol to utilize services.
A blockchain based Token which acts as a form of non-fiat currency.
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