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FAQs for [INVESTMENT]
How is my investment secured and is it ‘safe’? The PIPE Platform holds a lien (control) over EVERY projects intellectual property (IP). This means that if everything fails, YOU the investor, have ALL the secured IP at YOUR collective disposal (within the PIPE General Fund PGF) to either dispose of, restructure or manage for the benefit of ALL investors. This is a true ‘safety net’ system designed to provide the best guarantees to investors possible.
What privileged shares etc does the founding team hold? None. The founding team does not hold gDAO or PGF tokens that have not been bought alongside every other token, and have no special rights to redeem them, obtain them at discounted rate or be given them at some later date. As a result the founding team has no incentive to manipulate the valuation of the tokens.
As a Project, How much funding can I get? As a project we aim to supply the first €2m or thereabouts. This is a target figure that should enable the Protégé Company to become well enough established to be able to pursue Series A funding and beyond either through the PIPExchange or via 3rd party investors who ‘live’ on the PIPE Platform.
As an Investor, How do I measure the progress of a project? Every Protégé Company will undergo regular valuation which will give a guide value of the tokens that have been issued. The current justified valuation will be published on the PIPExchange and made freely available. The PIPExchange is where all funded projects are listed and performance monitored.
How do I get a seat on the IIC? By being an involved experienced Investor, Commercial Associate, xx-DAO Fund Manager and being voted onto the IIC.
How do I qualify as a HNWI or Business Investor? To be considered a HNWI or Business Investor a minimum deposit of c.€25,000 equivalent is required in the gDAO. We may also ask that you self-certify as a HNWI.
How do Protégé Companies get access to scheduled funding? The release trigger for the scheduled funding will have been agreed as a part of the IIC acceptance, and will usually be upon either the acceptance of a Statement of Fact or the attainment of a deliverable stage within the QED processes. Once the triggering condition has been met the Protégé Company will be able to withdraw FT from the system that can subsequently be exited as stablecoin or fiat.
How do you prevent big players / whales taking control? One of the purposes of the PGF DAO is to operate as a counterweight to the potentially large other investors in the system. The PGF DAO should be able to maintain a size that is at least 10% of the total size of all xx-DAOs combined.
How long before I make a profit? That depends on when you want to get out of the system and how much you want to make. Potentially a profit can be made as soon as an issue has been made if there is surplus demand within the Exchange. You can then dispose of your issue share and exit with a profit. A more significant profit would be available if you had the patience to wait for it, but we recognise that this may not suit your timescales.
What are the benefits for the University as an Investor? Most universities and research institutes have legal limitations on investment, often due to charitable status. However, there are benefits for universities joining the PIPE Platform as an investor. As an investor, the university can actively back their own institutions projects along the development roadmap in small tranches, alongside other investors and create long term returns over and above being a simple equity holder. They can also benefit from having a fractional share in every other project on PIPExchange, but most importantly perhaps, they can form their own xx-DAO or Guilds within the PGF. This allows the university to create a focused investment ‘pot’ that can specialise in specific opportunities from their own university, and/or form partnerships regionally with other universities and research groups to drive parochial success. They can also partner with other universities and research groups around Europe to focus on specific themes and collaborations. If the university can overcome their objection to being an investor in their own projects and the wider R&D/IP ecosystem, being an investor member of the PIPE and creating xx-DAO is a fantastic opportunity.
What do you do to detect money laundering? PIPE utilises strong authentication of the individual through AML/KYC and further Certification to ensure we know EXACTLY who someone is on the PIPExchange. The PIPE Company OÜ takes system and personal security extremely seriously and audit all interactions regularly through 3rd party forensic accounting to eliminate bad practices and identify unsavoury behaviour. Any individual or group of individuals manipulating the system in any way will be prosecuted to the full extent of applicable laws.
What is a Funding Schedule? The Funding Schedule for a Protégé Company is the agreement reached by the IIC as to the conditions under which amounts of the agreed funding should be made available to the Protégé Company. The QED process provides a regular pathway of events, each of which can be used as a condition to release some funds. In addition a requirement for a specific Statement Of Fact such as "we have resolved the quality issue relating to xyz" that has been signed off by the Protégé Company and a review panel, can be used as a triggering condition for a release of a level of funds. Timescale triggers can also be used, such as an immediate release upon issue of a specified amount and a further release after x period or on achievement of a KPI (whichever comes first). The Funding schedule can also be supplemented by the IIC if there is a material change in circumstances for the Protégé Company.
What is AML / KYC? AML = Anti-Money Laundering and KYC = Know Your Customer. These are tools used to ensure those involved intimately with any of our projects are known to us, above board and thoroughly certified to engage with projects and the PIPExchange.
What is the IIC? The Independent Investment Committee (IIC) is made up of a number of experienced investors and commercial professionals with project specific guest chairs for specific technology areas. The purpose of the IIC is to give final approval of the business plan developed by the project in its application to become a Protégé Company within the exchange. By this point most reasonable questions and preparation should have been completed validated and signed off, so this is a chance to do a final holistic appraisal of the project, its business plans and the team involved as to suitability for Protégé Company status.
What is the maximum amount that I can invest? The only Investor Position with a cap on the amount that can be invested is an xx-DAO. That cap is related to the degree by which the xx-DAO supports the PGF DAO so is in itself actually unlimited.
What is the standard diversification? The most conventional view argues that an investor can achieve optimal diversification with only 15 to 20 stocks spread across various industries - Investopedia. The PIPE Platform and Lab to IPO Pathway finds, forms and finances c.100+ projects annually (from Y2-3) thus reducing principle risk significantly. Over 5-years, the PGF will have investments in a minimum of 500 projects and (potentially) 900+
What is the worst case outcome for me? Your capital is at risk in the normal way. For the gDAO, 100% of your money is held within the gDAO Treasury until it can be invested after which time it is "spent" and you have the internal Fund Tokens (FT) in your wallet at all times. The token does have a market value, although that market value may be less than the value of the investment initially. There are no guarantees as with any investment, although we have sought to mitigate all downside risk. This is far more risk averse and risk mitigated than a normal Angel or VC fund.
What makes you think that your approach is better than a standard Angel approach? It is well documented and well known that angel investing and to a slightly lesser extent VC investing generates poor returns and that both rely on the mitigation of principle risk to generate their 2.5x and 2.6x ROI respectfully. In fact these kind of investments lose 90% of the time. However, by focusing on the quality and quantity of projects using the unique PIPE QED process, increasing the overall due diligence on projects from < 20 hours to > 90 hours AND by focusing specifically on university and research group derived projects, the PIPE outcomes are significantly improved. All of these facts are publicly available.
What sort of projects could I invest in? This is actually one of the harder questions to answer, as no one has a crystal ball that can predict accurately what will arise. What we can say is that projects will be coming out of some of the worlds finest universities with a range of ideas and innovations from AI to Zoology and everything in between. Every wave of projects will be influenced by what has been developed beforehand and by the 3rd iteration of a project that has been developed on the back of a project that was developed on the back of ... well the subject of that project is beyond the forecast horizon of our crystal ball! It is not unreasonable to expect that projects coming through the system in the next 5 to 10 years will be performing feats that may be indistinguishable from magic from our current viewpoint. We are involved in making the magic mundane.
What types of project will you NOT handle? Certain types of project which would be considered to be unethical, harmful, discriminatory or unjust are unlikely to achieve a listing on the Exchange, as they will not get past the IIC.
Why must I undergo AML / KYC? Anyone who is involved in investment within the PIPE Platform and PIPExchange must undergo Anti-Money Laundering (AML) checks. The Know Your Customer (KYC) checks are a part of the registration of a PAN member and give meaning to the NDAs and other agreements and arrangements that they may enter into.
Your paper states that PIPE secures a stake in ALL Protégé Companies on behalf of the PGF, how large is this position? The Minimum equity held in any/all projects is 25%, although this is often much higher.
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