Neufund Whitepaper Jan 17

Formatted: Width: 11", Height: 8.
5"
Formatted: Font: (Default) Neutraface Text Book, 12

pt, Font color: Auto
neufund.org January 2017

NEUFUND
TECH WHITEPAPER
ZOE ADAMOVICZ, MARCIN RUDOLF, ANDRÉ EGGERT
THE WHITEPAPER LINKED IN THIS POST IS OUTDATED. PLEASE FOLLOW THIS ACCOUNT, CHECK OUR WEBSITE, OR SIGN UP TO SLACK
& NEWSLETTER TO RECEIVE NOTICE OF OUR FORTHCOMING WHITEPAPER V.4.
Formatted: Font: 22 pt
1. What is Neufund ?
Neufund is building a blockchain-based and investor-directed Platform which bridges the worlds of cryptocurrency and equity. Formatted: Border: Top: (No border), Bottom: (No
border), Left: (No border), Right: (No border), Between
Neufund unlocks the resources of cryptocurrency and blockchain to startups seeking funding and all forms of technological innovation
: (No border)
and disruption on one hand, and on the other builds a way for cryptocurrency investors to access a diverse dealflow of investment
proposals.
The technical and legal innovations behind Neufund allow the creation of a new type of ownership structure that is neither money nor
stock, but tokens which represent equity and at the same time are as liquid as currency. Such tokens have an intrinsic value to the
blockchain network, and at the same time they also represent value of the business operating in the off-chain world.
What Neufund is, in more details:
-
neufund.org January 2017 2
● A technological and legal Platform that allows equity of real-world companies to be represented as tokens living on the
blockchain.
● A technological and legal Platform that allows anyone to invest in such tokens, individually or as a part of a decentralized
organisation.
● A framework of legalNeufund is building a blockchain-based and investor-directed Platform which bridges the worlds of
cryptocurrency and equity. Neufund unlocks the resources of cryptocurrency and blockchain to startups seeking funding and
all forms of technological innovation and disruption on one hand, and on the other builds a way for cryptocurrency investors to
access a diverse dealflow of investment proposals.
● The technical and legal innovations behind Neufund allow the creation of a new type of ownership structure that is neither
money nor stock, but tokens which represent equity and at the same time are as liquid as currency. Such tokens have an
intrinsic value to the blockchain network, and at the same time they also represent value of the business operating in the off-
chain world.
● and smart contracts that make token emission and investment in such tokens binding both on-chain and off-chain. Formatted: Border: Top: (No border), Bottom: (No
border), Left: (No border), Right: (No border), Between
● An open virtual Venture Capital (VC) Fund on top of Platform services that invests in technological innovation. : (No border)
● An educational platform (online & offline) which aims to spread the word about blockchain and onboard individuals, Formatted: Font: (Default) Neutraface Text Book, 12
pt, Font color: Auto, Not Highlight
companies and organisations that aren’t using crypto tokens and blockchain yet.
● A centralised and decentralised user interface that makes the Platform and Neufund VC accessible for both crypto experts and
blockchain newcomers.
-
2. Grand Vision
Neufund bridges the world of the cryptocurrency and equity. It creates a link between the colourful startup world and the blockchain
crypto community by mapping startup shares onto blockchain-based tokens, and demystifying blockchain through easy to use UI and
extensive opportunities to learn about all things blockchain. Neufund allows off-chain companies to enter the blockchain ecosystem.
The ultimate goal is to unlock the resources of blockchain (crypto-assets and ICO process) to fund startups and all forms of
technological innovation and disruption, and to provide the cryptocurrencies community with a new source of interesting investment
proposals. Our vision is to create an ecosystem that enables hundreds or thousands of different token systems to come into existence
by establishing new projects and their supporting networks.
We want to actually prove this vision. We will put together components of our Platform and establish the first decentralised venture
capital Fund called Neufund VC. This fund will lead the way by establishing new investment processes, decentralised governance,
adopting blockchain technology and educating users. Ultimately, it will open the blockchain ecosystem and the Neufund Platform for
other investors and will become one of the many actors in the ecosystem.
-
3. Ecosystem Impact
Neufund creates value for equity investors, cryptocurrency investors, technological startup founders and the crypto community alike.
Value for investors:
● Globally operating VC fund functioning in multiple jurisdictions
● Liquid asset position - equity is represented as tradable crypto tokens
● Structured and unlimited deal flow access
● Built-in trust system - transactions are encoded on the blockchain, independently of any central authority
● Automatic enforcement encoded in blockchain-based smart contracts
● Low transaction costs
● Low administrative costs
● Influence on investment decision through designed governance system
Value for startups and founders:
● Low or nonexistent opportunity costs while fundraising
● Faster access to funding, independent of geo-location
● Low transaction costs
-
● Liquid secondary market
● Less exposure to potential strategic behaviour of investors Formatted: Font color: Red
● Transparent market conditions
Ecosystem values:
● Demystifying blockchain: bring off-chain organisations to the blockchain and add value to the ecosystem
● Unlock crypto-funds: create new opportunities for the crypto community to invest and trade tokens from off-chain companies
● Create new token systems and networks
Neufund fuels the transition from a traditional static, manual funding environment to a dynamic, more fluid and open Formatted: Font color: Red
ecosystem for all participants.
-
4. Neufund Organisational Structure and Legal Considerations
Neufund is an ecosystem of off-chain and on-chain (distributed) organizations with legal and smart contracts backing them. It is also
an interaction system where different actors are involved, as in the diagram below.
-
-
4.1 Off-chain and on-chain entities
We follow the simple idea of an on-chain & off-chain- company representation. This implies that each organisational entity will have
both an off-chain (real-world companies and partnerships established by legal contracts) and an on-chain (distributed organisations
established by smart contracts) representations. Actors will interact with one another but such interactions will be bound as in a single
organisation.
Within Neufund you have a Platform operator (Neufund GmbH) which is currently purely off-chain, a Neufund VC entity (Neufund
VC Partnership and Neufund VC DO) and many Startup entities that represent projects that are funded on the Platform. A crucial part
of this ecosystem is the Investment Community; holders of crypto assets that may invest in Neufund VC or startups.
Please note that Startup Investors may be individuals as well as organisations, Neufund VC being one of them!
Neufund GmbH is a German company that creates and further develops the Platform that hosts the Neufund ecosystem. Neufund
GmbH bears the cost of developing and running the Platform, which includes the employees’ salaries and the costs of legal
representation. GmbH is owned by its founders and Platform Investors that provided initial funding in a classical way. The GmbH
generates revenue from the Platform Fee acquired on every completed investment and from Carried Interest via the Neufund VC
Partnership in which it acts as the General Partner.
Neufund VC Partnership is a German limited liability partnership in which Neufund GmbH acts as the General Partner and the Fund
Investors are the Limited Partners. The Partnership bears the operational costs of running the fund which includes salaries, deal
scouting and governance costs (Delegates). The Partnership collects Carried Interest from Startup’s proceeds which is distributed to
the General Partner (Neufund GmbH) and the Delegates.
-
Neufund VC DO is an on-chain representation of Neufund VC and a community of Fund Investors realising functions of venture
capital fund via smart contracts living on the Ethereum blockchain. Neufund DO is to a large extent autonomous and self-governed.
Owned by Fund Investors via the emission of tokens, so-called Neumarks, Neufund VC DO pays proceeds to its owners.
Startup is a company established in any jurisdiction that seeks investment through the Neufund ecosystem. To get such an investment
the Startup will convert part/all of its equity to Startup Tokens and offer them to investors. A successful offering will result in the
establishment of Startup DO.
Startup DO is an on-chain representation of a Startup and a community of Startup token holders. It provides on-chain functions to
raise money, establish shareholder governance and other post-investment operations. Startup DO distributes proceeds to Startup
Investors (including Neufund VC DO) upon a startup’s exit (acquisition or IPO) and periodical dividend payouts.
4.2 Actors
Fund Investor or Neumark Token Holder is anyone that acquired Neumarks (Neufund VC DO tokens) – be it during initial offering
or in the open market. His/her stake is long term ROI. He/she profits from the returns of the fund’s investments.
Fund Manager (FM). Fund Managers are assigned by the Platform operator (Neufund GmbH) and are responsible for the day to day
management of the fund. They make investment decisions together with Delegates and get carried interest as compensation (see Coin
Circulation).
Delegate. Delegates are elected by the Fund Investors. They make investment decisions together with the Fund Managers. They get
carried interest as compensation (see Coin Circulation).
The Committee - a voting body on investment proposals, The Committee is comprised of all Fund Managers and Delegates.
-
Startup Owner. Represents the Startup in negotiations and is able to signs agreements and represent Startup post investment (see
Startup DO Governance). May own shares in Startup. His/her interest is in receiving investment and achieving long-term success of
the Startup.
Startup Investor. Anyone that has acquired Startup Tokens (including Neufund VC) becomes a Startup Investor. He/she has
shareholder’s rights (see Startup DO Governance). Can have shorter (to sell tokens to other investors) or longer (exit etc.) stakes in the
Startup’s success. Compensated by valuation increase (secondary sale) or proceeds from an exit or dividend payouts.
Startup Token Holder. Anyone that owns Startup Tokens, including founders.
4.3 Regulatory Considerations

The Neufund ecosystem and Neufund VC Partnership is established and operated in the jurisdiction of Germany. It fully complies
with German and EU regulatory requirements. Neufund VC Partnership will be registered as a fund and publish a prospectus in
accordance with German and European Securities law. KYC and money-laundering regulation will be fully observed.
-
5. Coin Circulation
In this chapter we show how value-carrying coins circulate between actors and entities, how revenues are made and where the costs
are. Please note that the investment ticket sizes and exit proceeds amounts are fictional as well as the exact proceeds distribution
model used.
-
-
-
5.1 Example Investment Process - (1)
Neufund VC decides to invest in a Startup by acquiring a 20% stake for 1M.
Neufund VC, being in this case the lead investor, negotiates a D% of discount on the price it pays (typically discount on valuation is
used, they can be made equivalent and price discount is easier to represent on diagram). That D% of 1M goes back to the Investment
Pool (with one minor exception that allows Neufund VC costs to be covered - see later).
From the remaining (1 - %D) of 1M, a F% Platform Fee is deduced and collected by Neufund GmbH (Platform operator) via Platform
Fees. The remaining (1 - %D)*(1 - %F) of 1M is the effective investment that the Startup receives for 20% of equity.
Please note that the same scheme applies for other Startup Investors that follow Neufund VC’s ticket. The main difference is that they
cannot take a discount, but the Platform Fee is deduced in the same way.
5.2 Example Proceeds Distribution Process - (2)

Startup pays 10M of exit proceeds to Neufund VC. First, CI% of carried interest is deduced and sent to the Carried Interest Pool from
which it will be distributed to the fund management (Fund Managers and Delegates).
The remaining (1 - CI%) of 10M is sent to the Proceeds Pool from where Fund Investors may withdraw their share pro-rata according
to the amount of Neumarks they hold.
Neufund GmbH, which established Neufund VC by initial injection of operational capital, is entitled to part of the Carried Interest
which becomes its second revenue stream.
-
Other Startup Investors get their share in proceeds directly, which is not shown on the diagram. Please note that it is possible that if
that investor is an organisation, then some fees are deduced internally.
5.3 Neufund VC Operational Costs

Neufund VC has operational costs both on and off-chain (like salaries, costs of deal scouting, due diligence etc.). The costs are
covered as follows:
● Neufund GmbH invests an initial amount when the Neufund VC Partnership is created for a promise of profits coming from
carried interest.
● With each successfully completed investment it makes, part of the discount is deduced and stored in the Fund Operational
Pool.
-
6. Neufund VC Distributed Organisation
6.1 Neumark Token and Ownership
Neufund VC DO is a virtual VC fund and needs capital to operate. This capital will be secured via an emission of tokens called
Neumarks. Any actor, be it an individual, corporate or DAO, may acquire such tokens and become a Fund Investor. Neufund VC DO
will perform primary capitalisation via Initial Token Offering with terms described in Neufund DO Initial Token Offering.
For a Fund Investor, Neumark represents the following value:
● Crypto assets in the Investment Pool that will be used to invest in Startup Tokens. Please note that when a new Neumark is
emitted and acquired, the full price goes to the Investment Pool, no fees are deduced.
● A right to the proceeds from investments that Neufund VC DO made, which are secured by Startup Tokens that Neufund VC
DO owns. Proceeds will be distributed daily according to an algorithm in Neufund VC DO smart contract.
● A stake in Neufund VC DO governance. Each Fund Investor has an impact on investments and other decisions via Delegates
elections.
Neumarks will be traded on major exchanges so Fund Investors may liquidate at any point in time. Trading will start at a date
decided by the governing Committee, however it will not occur before several investments are made that prove the value of the
Neumark.
Neufund VC DO may decide for secondary capitalisations and secondary Neumark offerings. With the price set to current market
price, existing token holders will not be diluted and Neufund VC DO will be able to re-capitalise the Investment Pool. Contrary to any
existing VC funds, Neufund VC does not have a closing date and will operate indefinitely.
-
Profit for the Fund Investors comes from investment proceeds like an exit proceeds or dividends. Such proceeds are paid into
the Platform and are automatically distributed to Startup Investors (Neufund VC DO being one of them). Please note that Fund
Investors are not entitled to Platform Fees which are collected by a separate entity. See Coin Circulation for details.)
By acquiring Neumarks, Fund Investors indirectly enter a legally binding agreement with the the Neufund VC Partnership
that is an off-chain entity managing the fund. This agreement secures his/her rights as a Limited Partner in the fund.
6.2 Details of Neufund VC DO Capitalisation Process

Fund establishment starts with an off-chain seeding process. Fund Managers will prepare a prospectus describing the investment’s
profile, the fund’s operational structure and terms on which capital will be raised: minimum and maximum amount raised, ticket size,
deadlines etc. The prospectus will be then circulated amongst a number of Initial Investors pre-selected by Fund Mangers (FMs) in
order to get their approval. FMs need to make sure that the establishment process will not only be successful financially, but also
ensure that a capable initial set of fund members will help execute the fund’s investment vision.
With the off-chain part completed, terms are formalised on-chain within the Fund Capitalisation Proposal.
-
Below, the on-chain process is detailed:
1. “Fund Capitalisation Proposal” contains the fund capitalisation terms and a list of Initial Investors.
-
2. Initial Investors have the right to acquire tokens in a pre-sale with a discount. This is a compensation for their contribution in
establishing the fund off-chain.
3. When initial funding is completed (Initial Investors have pledged their tickets), the proposal is offered to the public where
anyone (“Community”) can pledge Neumarks by sending coins to the Escrow Pool via Proposal smart contract.
4. The Community phase ends after the deadline specified in the proposal or when the maximum amount is secured.
5. Fund Contract is created from the proposal.
a. Coins in the Escrow Pool are transferred to the Investment Pool.
b. Neumarks are released to Fund Investors.
c. Neumarks are fully fungible – no difference between Initial Investors’ and Community Investors’ tokens!
6. Fund Investors elect Delegates and fund starts to invest. See Investment Process.
6.3 Neufund VC DO Governance Model

Neufund VC DO is a semi-autonomous organisation which is reflected in its governance model. In essence, decisions are made by The
Committee with members assigned by the Fund Investors (Delegates) and the Platform operator – Neufund GmbH (Fund Managers).
We aim to have the same number of Delegates and FMs, however decisions will be made even if the Fund Investors are passive and
do not elect Delegates.
-
Delegates are continuously elected by Fund Investors; a principle taken from the liquid democracy concept. Below are some
proposed election rules:
● A Maximum of N Delegates can be elected, where N equals number of FMs in The Committee.
● Each token holder assigns his vote pro rata to one Delegate.
● The Token holder can change his preference or withdraw the vote at any point in time.
● Delegation is not transitive and has no end date.
● The Top N candidates with the most votes become Delegates.
● Everyone can be a Delegate. The position is not limited to Neumark holders.
● Delegates are given a small salary taken from the Fund Operational Pool. They participate in Carried Interest from all
investments they voted on.
The Committee and election process is designed to facilitate investment decision making. The key is to give power to experts: Fund
Investors and professional Fund Managers. We do not expect The Committee to, for example, decide if a software update to any smart
contracts is necessary. We’ll limit the scope of their decisions to the following:
● Should Neufund VC invest in a given Startup Token?
● Should Neufund VC emit new Neumarks and re-capitalise?
● When Neufund VC should start Neumark trading?
The Committee decides by simple majority voting.
-
● FMs and Delegates cast a single equally weighted yes/no vote.
● The deadline for the vote is X days (where X is small like 5 days)
● Once cast, a vote is final even if FM or Delegate is removed during voting.
● Majority wins. Draw means “no”. There’s no quorum.
-
In the case of investment decisions we allow to use wildcards. When a wildcard is cast, it will overrule The Committee decision to
invest/not invest in given Startup. Wildcards do not apply to other decisions.
● FMs have the right to cast W wildcards per year.
● Delegates have no right to use wildcards.
● There are only “yes” wildcards. No one has veto power!
6.4 Neufund VC DO Initial Token Offering

We will fill this chapter with details you expect when the Neufund VC DO initial offering is officially announced. Currently please
refer to:
● Neumark value, ownership information and where your money goes in Neumark Token and Ownership.
● Details of token sale process in Details of Neufund VC DO Capitalisation Process.
-
7. Startup and Startup Tokens
Neufund allows existing and new startups to get funding via blockchain-based tokens. Those tokens are issued as a result of an
Investment Process that in many ways is similar to a process that startup goes through when funded classically. In particular, a startup
must prove to investors that its shares/tokens have value.
The main difference is that during this process a part or the entirety of the startup’s shares will be converted into tokens via Investment
Agreement. This provides significant benefits to both to investors and startup founders like liquidity and minimal legal costs (see
Ecosystem Impact).
Neufund will release guides that will help Startup Owners to apply for funding in this way. In the following paragraphs we’ll discuss
Startup Tokens and smart contracts from the investor’s perspective.
7.1 Startup Token Ownership

Startup Tokens may be acquired by a Startup Investor when offered during the investment process. It’s worth stressing that anyone
can become such investor, be it Neufund VC DO, DAOs, individuals owning some Bitcoins etc.
For Startup Investors, such tokens have the following value.
● They represent equity in an off-chain company with terms specified in the Investment Agreement and corresponding Startup Smart
Contract. The value of the equity itself was assessed by the investors when proposal was presented by the founders and discussed.
-
● They give a stake in Startup governance. Neufund Platform provides the tools and legal framework for on-chain shareholder
resolutions, reporting and other decisions (see Startup DO Governance).
● Tokens may also provide some intrinsic value on-chain. For example they may be extended to represent coins that are used to
purchase Startup services.
Startup Tokens may be publicly traded if token and shareholders pass a resolution to do so. Neufund Platform will facilitate such
trade (see Roadmap) but will also put restrictions on it like mandatory information policy and requirements on liquidity (no one wants
to publicly trade startups in seed stage).
A Startup may apply for more funding and dilute existing token- and shareholders. This requires a passed shareholder resolution
as well and must comply with terms in the Investment Agreement.
Startup Investors profit from dividends or exit proceeds paid by the Startup Owners which are automatically distributed by smart
contracts.
By acquiring Startup Tokens, Startup Investors become an indirect party to the Investment Agreement and enter a legally
binding agreement with the Startup. This agreement secures his/her rights as a shareholder.
-
7.2 Investment Process
Investment starts off-chain when a Startup presents its project to the community of investors. This is an important part, where a new
project can be discussed by the community. The community’s interest, hesitations and insights are taken into account in order for a
decision to be made on if the project is formally considered on-chain.
● The Startup Owner must present and defend his/her idea on a public forum.
● The Community will verify various claims that the Startup makes, we assume that projects worth investing will get enough
attention. There are mechanisms on the Platform that compensate community experts for their due diligence.
● The Startup Owner must convince one of the investors to become a Lead Investor and to start the negotiation of a term sheet.
When Neufund launches, only Neufund VC DO may decide to proceed with a proposal, so it has the final say on which projects will
get funded on the Platform. It will be also very active in bringing deals and vesting them. Platform will be opened to other Lead
Investors later in the Roadmap.
Neufund VC DO uses a fair, public and simple term sheet template. By default it will only negotiate basic parameters like valuation,
ticket size and community ticket size. For example parties may agree to €1M valuation with Neufund VC ticket size of €50k, a
minimal community ticket size of €100k and a maximum of €150k.
When such agreement is achieved off-chain (results are however public!), it gets formalised on-chain as Investment Proposal smart
contract.
-
-
-
Only Investment Proposal smart contracts are considered by The Committee. Voting procedure is described in “Neufund VC DO
Governance Model” and will take a few days. Neufund VC DO may decide to invest within a week of seeing a proposal which we
consider very quick.
On “yes”, formal due diligence takes place. During this step, legal documents, bank statements etc. of the Startup are collected and
verified by Neufund VC. This step is optional – it may be skipped if, for example, the ticket size is small, as well as it may limit the
scope of due diligence. A standardised due diligence report is added to Investment Proposal. The standardised report is public.
When the formal due diligence is completed, the Neufund VC DO executes his ticket according to the termsheet: it acquires a
number of Proposal Tokens by transferring coins from the Investment Pool to the Escrow Pool as controlled by the Proposal Contract.
This opens community investment phase where anyone with crypto assets can co-invest with Neufund VC and other investors
on the same terms (with the exception of a discount). Neufund VC DO token holder are allowed to invest individually if they like
the project. Community Investment options lowers barriers for potential investors to own equity and provides another “wisdom of the
crowd” type of validation for investment decision, replacing classical due diligence.
When the community investment is completed an Investment Agreement is automatically generated from the Proposal smart
contract and signed on paper by the Startup Owner and the legal representative of the Platform (which provides l egal services to
investors). The document is scanned and preserved by both parties.
-
A hash of the scan will act as a digital proof of the signature made on paper and will be stored in Proposal Smart Contract.
When this happens, the investment process is successfully completed by following actions.
1. A Startup Contract is created which establishes Startup DO. Through it, Startup Token Holders can exercise their shareholder
rights.
2. Proposal Tokens from proposal are converted to Startup Tokens. Proposal Tokens are destroyed.
3. All the fees and discounts are deduced from the Escrow Pool as described in Example Investment Process.
4. The remaining funds in Escrow Pool (from Neufund VC DO and from other Startup Investors) are transferred to the startup
investment address controlled by the Startup Owner.
7.3 Startup DO Governance

The Investment Agreement obliges startup to carry on shareholder resolutions on Platform. Off-chain investors still vote on
paper and results are merged (there is no overlapping, no one votes twice) to get the final answer. In case of fully on-chain startups (all
shares are represented as Startup Tokens), paper voting is not necessary. The voting procedure complies with what you can find in
typical shareholder agreement.
There are a few interesting decisions with on-chain consequences that can be made this way.
● Apply for more funding via Neufund Platform.
● Enable public trading of a Startup Token.
-
● Convert more equity to Startup Tokens (typically when founders want to take part in public trading).
● End of life event like exit or company’s closing.
Investment Agreement obliges startup to report to token holders on regular basis. Startup should be aware that due to having
many shareholders, whose identity might change when secondary trading is permitted, such reports should be treated as public.
8. Investment Community
Our vision is to allow anyone to invest in innovative projects using blockchain. We aim to create a whole investment community that will Formatted: Font color: Red
bring new proposals, evaluate them and pledge money for projects that they want to happen. Readers of this whitepaper may think that
we are putting a lot of constraints to enter such community – there are long chapters on organisational structure, coin circulation and
processes with multiple steps. In fact, the barrier to entry is very low.
● You can become an investor by buying Neumark or Startup Token on open market. All you need is an Ethereum or Bitcoin
wallet and you have all limited partner (Neumark) or shareholder (Startup Token) rights.
● You do not need to be a fund member to invest. You can do it during the community phase by following other investors –
you’ll have all information you need to decide and investment terms are simple and public.
-
Additionally, we will implement mechanisms that will reward active community members.
● Neufund VC will look for Delegates to manage the fund. Delegates will be compensated with carried interest and salaries.
● Experts that help with evaluating proposals can be rewarded for their work by tokens or success fee. This will be secured in
investment proposal (if lead investor agrees).
● You can become one of our associates that bring deals to the Platform. You can get success fee when investment happens or be
compensated in some other way.
9. Roadmap
We created our roadmap with following guidelines in mind:
1. First we create our product and technology through a dry-run. We will launch a test project incubated by Neufund to test key
fundraising processes and technologies, but with limited exposure to financial and technical risks.
2. Secondly we seed Neufund VC with investment proposals, then we issue Neumarks in initial offering. Neumark holders should
not bear much technological risk, just the investment risk coming from the purpose of the token.
3. At launch, Neufund VC is the only lead investor on the Platform (see Investment Process), other investors can co-invest during
the community phase. This is by design - we want to “seed the spirit” by carefully vesting proposals submitted to the Platform
and controlling legal side until it is proven. After that the Platform will be open for other investors to take the lead - with
associated costs and benefits.
4. At launch, Neufund VC DO and Startup DO are organisations that are decentralised but not autonomous. We do not believe
that DAO just happens, the system must be carefully guided until it works by itself. Our roadmap adds such features step by
step (one example is autonomous code updates of smart contracts) but we cannot promise that full autonomy can be achieved.
-
Below are our milestones for the next 2 years:
1. Closed Beta Investment. In this milestone we want to test our technology and investment process on a single, selected project.
We will announce details soon.
2. Neufund VC Initial Token Offering. In this milestone we launch MVP of Neufund – able to raise money, invest and Formatted: Font color: Red
distribute proceeds. We fully implement Delegates-based decision model to fulfill our governance vision.
3. Neumark Trading. In this milestone, Delegates are elected and The Committee is formed, and investing starts. The
Committee is free to enable Neumark trading and list it at exchanges.
4. Recapitalisation. In this milestone we’ll extend ways for Neufund VC and Startup to raise capital by enabling secondary
investments.
5. Fully On-chain. Our goal after that is to allow startups to be operated fully on-chain, including quarterly reports and
shareholder resolutions. This milestone also aims for the code update of the smart contracts to become autonomous.
6. Power to Community. In this milestone the fund will open its management functions to the community. Independent
investment proposals, due diligence, investment decisions, etc. will be allowed.
7. Startup Token Trading. Around the same time we’ll allow to publicly trade Startup Tokens and facilitate such trading.
Information policy for publicly traded Startups will be implemented.
10. Reporting & Communication

We welcome your input to this whitepaper and to other things that we do. Please track our progress here:
-
● Neufund Slack channel: https://neufundorg.signup.team/
● Neufund subreddit: https://www.reddit.com/r/neunews/
● Neufund blog: https://blog.neufund.org/ (coming soon)
The latest version of this whitepaper can be found here:
https://drive.google.com/drive/folders/0Bztr6wayLPRaemtNMG9QbFZWaDg
10.1 Neufund VC and Startup Reporting

Currently, we are creating a reporting structure that will be implemented after Neufund VC DO Initial Token Offering. Besides
publishing our whitepaper publicly, the following communication measures will be implemented to ensure transparency:
1. Fund performance information will be available in the investor’s user interface or directly in smart contracts’ state.
2. Fund members are involved in investment and other important decisions via Delegates they elect.
3. Events that substantially increase or decrease Neumark value will be shared.
-
11. Team
Meet our founders Zoe Adamovicz, CEO, Marcin Rudolf, CTO and André Eggert, Legal Architect of Neufund.
Zoe Adamovicz Marcin Rudolf André Eggert

CEO & Co-Founder CTO & Co-Founder Legal Architect & Shareholder
at Neufund at Neufund at Neufund
Zoe Adamovicz is an Marcin currently leads the André Eggert is a partner at

entrepreneur and occasional technology development at LACORE. He advises
angel investor. Neufund. He has been companies and entrepreneurs
Zoe is passionate about tracking the development of as well as investors. One of
building technology blockchain technology for the his core activities is the
-
businesses that are past 6 years. support of M&A and financing
impactful, positive and at the Before joining Neufund, he transactions. André has
same time profitable and lead the technology special knowledge in the
powerful. Prior to Neufund, development at the app areas of private equity
she founded Xyo, a company search engine Xyo. financing and quasi-equity
that re-imagines how people Previously, he was a instruments. His focus is,
discover apps, Priori Data developer and team leader in moreover, on negotiating and
(app store intelligence), and projects involving messaging drafting joint venture and
ConciseSoftware which and telecommunication cooperation agreements. He
provides software (Orange), cryptography and possesses relevant
development and mobile devices (Jamba experience resulting from his
engineering services. Music), insurance and involvement in a wide range
She is also a mentor at the government (Fiat, Hewlett- of international transactions
Gaza Sky Geeks, where she Packard). with parties from the Anglo-
supports technology American legal system.
entrepreneurship in the Additionally, he possesses
challenging area of the Gaza specific expertise in the
Strip and helps introducing technology and entertainment
Blockchain. Zoe is an expert industries.
in technology
entrepreneurship and venture
capital.
-
You can see the rest of our team here.
-

Neufund Whitepaper Jan 17

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Neufund Whitepaper Jan 17

Uploaded by

Copyright:

Available Formats

Formatted: Width: 11", Height: 8.

Formatted: Font: (Default) Neutraface Text Book, 12

neufund.org January 2017

What Neufund is, in more details:

Value for investors:

● Globally operating VC fund functioning in multiple jurisdictions

● Liquid asset position - equity is represented as tradable crypto tokens

● Structured and unlimited deal flow access

● Automatic enforcement encoded in blockchain-based smart contracts

● Low transaction costs

● Low administrative costs

● Influence on investment decision through designed governance system

Value for startups and founders:

● Low or nonexistent opportunity costs while fundraising

● Faster access to funding, independent of geo-location

● Low transaction costs

● Transparent market conditions

● Create new token systems and networks

4.3 Regulatory Considerations

5.2 Example Proceeds Distribution Process - (2)

5.3 Neufund VC Operational Costs

For a Fund Investor, Neumark represents the following value:

6.2 Details of Neufund VC DO Capitalisation Process

5. Fund Contract is created from the proposal.

a. Coins in the Escrow Pool are transferred to the Investment Pool.

b. Neumarks are released to Fund Investors.

6.3 Neufund VC DO Governance Model

● Delegation is not transitive and has no end date.

● The Top N candidates with the most votes become Delegates.

● Everyone can be a Delegate. The position is not limited to Neumark holders.

● Should Neufund VC invest in a given Startup Token?

● Should Neufund VC emit new Neumarks and re-capitalise?

● When Neufund VC should start Neumark trading?

The Committee decides by simple majority voting.

● Once cast, a vote is final even if FM or Delegate is removed during voting.

● Majority wins. Draw means “no”. There’s no quorum.

● FMs have the right to cast W wildcards per year.

● Delegates have no right to use wildcards.

● There are only “yes” wildcards. No one has veto power!

6.4 Neufund VC DO Initial Token Offering

7.1 Startup Token Ownership

For Startup Investors, such tokens have the following value.

7.3 Startup DO Governance

● Apply for more funding via Neufund Platform.

● Enable public trading of a Startup Token.

● End of life event like exit or company’s closing.

10. Reporting & Communication

10.1 Neufund VC and Startup Reporting

Zoe Adamovicz Marcin Rudolf André Eggert

Zoe Adamovicz is an Marcin currently leads the André Eggert is a partner at

You might also like