Most Commonly asked questions
If you have any additional question, please don't hesitate on reaching out at contact@venturemachine.xyz
Can non-crypto companies use 10e53?
Yes! The first company that used the 10e53 was an Agro-tech company
How does the 10e53 compare to other popular fundraising tools?
Venture Machine + the 10e53 are the only set of tools that allows founders and investors to keep all financial components of their fundraise on chain.
Why wouldn’t we just raise using a standard SPVs? How does this benefit us?
10e53 benefits founders because it’s more attractive to any investor who wants to keep their funds in crypto
Investors can stay 100% in crypto when they invest AND when they get paid out on exit. All proceeds from liquidity events are paid out on chain via smart contracts.
10e53 allows DAOs and token-only funds to walk away from an investment with a tangible asset (the interest tokens in their ETH wallet) and bring private equity on chain
And, because 10e53 interest tokens are tradable and more liquid than a promise of a portion of a SAFE, for instance, founders should be able to raise funds at a higher valuation (see liquidity premium)
We’re doing a normal round and we don’t plan on ever selling tokens. Can we still use 10e53?
Yes! 10e53 is like a normal SPV in that way - you’re raising money in exchange for future equity. The main difference is that investors get pay / get paid out on chain, or even on fiat but using blockchain infrastructure for settlements.
Can 10e53 be used alongside normal SAFEs, warrants, or a normal priced round?
Yes! It can be used alongside any other method of fundraising with no issues. It’s a totally separate contractual agreement, like a new SPV.
What would you say to someone who was hesitant to use 10e53 because it’s new?
10e53 was created in collaboration with both Latham & Watkins and Cooley, two of the most reputable law firms in the country.
It also relies on a lot of the same legal precedents as the SAFE. The two documents are only minimally different.
There’s a DAO that wants to invest in us, but they’re worried they might not be able to enforce the contract and get paid out on exit
10e53 rests on the same enforcement mechanisms as the SAFE
No one gets paid via the Venture Machine smart contract unless EVERYONE gets paid. That means any of the angels or investment DAOs who invest through 10e53 (aka the investment token holders) can take a founder to court and EVERYONE benefits.
Any representative of the DAO or third party can use the physical 10e53 document to take a founder to court and ensure the smart contract is paid out with exit liquidity, just like it’s stated in the document
What are the KYC requirements for investors?
Investors only need to provide their name and accreditation status
What countries can startups use 10e53 in?
International investors can invest in any US company using 10e53, but only US and BVI based entities can raise via the 10e53 (at the moment). More jurisdictions to come (Israel, UK, Switzerland are next).
Where does the money that I raise go?
When you spin up a 10e53 “SPV”, you’ll be asked to connect a metamask wallet for your company. The funds from the investor are sent directly to that wallet (we are not in the flow of funds at all).
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