Partial tokenization

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A raise on Spring covers only the portion of the company offered in that round, not the whole company.

For companies

• The company agrees the percentage it offers before the raise. Only that portion is placed into the structure, by issuing new shares to the company's cell.

• Existing shareholders keep their shares. Founders do not receive equity-backed tokens for the shares they already hold.

• Only the number of tokens that corresponds to the portion offered is issued.

• The company can raise again on Spring later. A later raise issues new shares to the same cell and uses the same equity-backed token, but it has its own terms, escrow, vesting and governance.

For investors

• Equity-backed tokens represent a claim on the shares held by the company's cell, not on the whole company.

• Every equity-backed token, from any round, represents an equal fraction of the cell's holding.

• Dilution: the cell's percentage of the company can decrease when the company issues new shares, either in a later funding round at a higher valuation than the Spring round, or in a lower-valuation round (a "down round") subject to the protections agreed with the cell.

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