Neufund’s vision is to invite everyone to join the bootstrapping of a new two-sided marketplace and an investment ecosystem, and to once and for all democratise innovation and creation.
Neufund is a community-owned fundraising platform. It acts as a bridge between the investment world and the blockchain space.
More in the whitepaper
Using our legal and technical infrastructure, startups and established companies alike can legally issue a new type of asset we call tokenized equity. Such crypto tokens reflect the value of the business operating in the real, off-chain, world and at the same time are as liquid as a currency.
We achieve this by formally linking traditional contracts with Ethereum smart contracts through mutual reference and code correspondence. Blockchain and smart contracts allow Neufund to accelerate the investment process, lower investment barriers, align interests of inventors and investors, and eliminate transaction intermediaries.
The original idea for Neufund was to build a decentralised VC fund on the blockchain. Since then, we have refined our own understanding of the token economy, and expanded all components to work in a way that the system sustained itself.
Neufund is designed to be a true token economy. Neufund Platform’s value grows when the number and the volume of investments grows, so its economy must be designed to stimulate investment and reward transacting participants. Thus the value of the platform is reflected by a protocol token called Neumark, which participants earn by committing capital. This essentially means that the community economically owns the ecosystem, and it incentivises investors to bootstrap the platform and grow it with further investments.
Neufund is a community-owned fundraising platform. Companies can use our legal and technical infrastructure to legally issue a new type of asset on our platform, which we call tokenized equity, and into which anyone can invest. The Neufund platform thus acts as a bridge between the investment world and the blockchain space.
Fifth Force is an off-chain limited liability company incorporated in Berlin. It was founded as a way to build the platform infrastructure for Neufund as a fundraising ecosystem. The idea, however, was to ultimately “tokenize the enterprise”, and melt all parts of the company into the community by distributing its ownership, and eventually becoming a DAO. Fifth Force received an initial seed investment but its ongoing operations are financed through the Neumark reward, which closely aligns its interests with those of other Neumark holders.
Neufund forms an ecosystem that addresses everyone who shares the understanding that ICOs are the future of funding, as they catalyse innovation and liquidity in unprecedented ways. On the one hand, Neufund is built for investors: its mechanisms allow VCs to strike out on a new path, and its low entry barriers also allow the greater public to own their investment decisions and to invest in projects they care about. On the other hand, Neufund is built for startups and established companies that want an easier access to funding and take part in the crypto-world by tokenizing their shares.
As a whole fundraising ecosystem, the Neufund platform offers a fundamentally innovative approach to funding projects. With us, companies can issue tokenized equity and make use of the security and cost-efficiency of smart contract applications. This opens up the investment side broadly. In addition, the platform itself is owned by the community and anyone can participate without a exceeding an arbitrary minimum ticket size. Investors are also strengthened through increased liquidity, as they can trade their tokens anytime. On the other hand, the company side is equally opened up. Our platform allows for an unprecedentedly flexibility in funding, where community participation can speed up the fundraising processes to as fast as 6 weeks. Our vision for value creation far exceeds the classical Silicon Valley trajectory. It allows for a more diverse dealflow and is inherently open to novel industries and ideas. Neufund’s platform thus acts as a bridge between the investment world and the blockchain space.
The Neufund ICO is going to take place already this autumn 2017. However, we prefer to call it the Initial Capital Building Mechanism (ICBM), because the funds committed by investors will remain at their disposal (see more information on what is ICBM below). Further information will be published very soon on commit.neufund.org.
Neufund has initiated an entire ecosystem, which is economically owned by its community, and which extends far beyond the Neufund platform. In order to promote clear guidance and participants’ protection, we initiated the issuance of the European Regulatory Report, which has led to the formation of a global Blockchain Policy Initiative (learn more). We produced the ICO Transparency Monitor as a peer-to-peer tool for the community to evaluate fundraisers (check it here). Our numerous tutorials shall help investors to be well-informed (available at Ecosystem Impact). To enhance corporate governance, Neufund developed the innovative Employee Stock Option plan (visit ESOP on-chain). By providing these instruments for free, Neufund has been taking a pro-active role in advancing the crypto-community as a whole.
The Initial Capital Building Mechanism is a process corresponding loosely to the now common ICO process employed by other blockchain projects. In our case, it kickstarts our investment ecosystem by delivering liquidity to the Neufund platform. This corresponds to commitments by participants to make investments in future Equity Token Offerings of companies on the platform. Capital Building is the only purpose; Neufund does not rely on the ICBM to fund operations. We do not even have access to funds committed by ICBM participants. Funds remain under their sole control; perhaps that’s the main difference between a typical ICO and our ICBM. Neufund’s ICBM takes place in Autumn 2017.
In principle, Neufund empowers any kind of company from anywhere in the world to tokenise their shares. They may be on- or off-chain, at seed or later stage, and operating in any possible industry. As Neufund is an equity trading platform, however, projects which would like to instead promise goods or stake in services as an exchange for token ownership do consequently not qualify for our platform. A committee comprised of members of Neufund and the community approves all applying projects for the sake of due diligence. While the projects supported by our platform stand out through their diversity, they all have in common that they create value. This definition is broadened extensively, however, due to the flexibility in funding that our blockchain-based investment ecosystem allows for in comparison to a conventional VC fund.
Startups and established companies will be able to apply for funding after we will have launched our platform starting from next year. In the meantime, please contact us at [email protected]
During Neufund’s Initial Capital Building Mechanism (→ICBM), you will be able to commit Ether (ETH) as the native token of the Ethereum blockchain. On the Neufund platform as the following step coming up next year, it will be possible to invest in equity tokens in both ETH and EUR. For EUR committed to the platform we will provide Euro Token (EURT) as an internal stable coin that is pegged 1:1 to EUR and thus allows to be independent from cryptocurrency volatility.
Neumarks are Neufund’s protocol tokens which participants earn by committing capital to the platform. They entitle their holders to revenues from platform fees for ETOs (Equity Token Offerings) taking place on Neufund, as well as economic benefit from a platform portfolio pool holding a small amount of every ETO ever conducted. The amount of Neumarks held represents the individual share of the Neufund ecosystem. In total, they thus represent the value of Neufund’s entire token economy. As an attractive asset, they are apt for secondary trading and can easily be transferred among users.
Neumarks are not being purchased in the first place. Contributors receive Neumarks as a reward for contributing to the ecosystem. For every successful investment in a company on our platform one will receive Neumarks until the total supply of € 1.5 b is reached.
Neumarks are received after funds have been committed in Neufund’s Initial Capital Building Mechanism (→ICBM), or when investing on the Neufund platform at a later stage.
No, Neumark is not a security. This conclusion is the outcome of extensive legal analysis of the German law conducted by professional attorneys. Neufund is aware that questions regarding the regulatory status of Neumarks in other jurisdictions will be discussed. Since we cannot exclude different regulatory treatment of Neumarks in all jurisdictions, participants from the US, and potentially also other non-supported countries, will not be able to take part in the ICBM event.
The value of Neumarks results from fees and participation in a platform pool of equity tokens, and thus gives economic ownership of the network to its holders: (1) With each successful Equity Token Offering, a small fee is deducted from the invested amount. This platform fee is then distributed to Neumark holders pro rata. (2) Within the same Equity Token Offering, a small fee in form of company equity tokens is deducted from the total tokens that were acquired. This token participation fee is added to a platform portfolio of all companies ever to conduct a token sale on the platform.
Equity tokens represent equity (shares) in startups (off-chain companies that raise capital on the Neufund Platform). Equity tokens can be acquired by investors who are additionally rewarded with Neumarks. Generally speaking, equity tokens are technologically enhanced equivalents to shares that aim to be as liquid as cryptocurrency.
Yes. Equity tokens will be issued as securities under relevant EU laws.
At the time of Neufund’s Initial Capital Building Mechanism (→ICBM), Neumarks can be acquired through Ether (ETH) without going through the so called ‘Know Your Customer’ process. However, in order to get access to the Neufund Platform, investors need to go through an short authorisation process before their first investment. We will require your full name and ID scan. As a company, you additionally have to send us a copy of your company’s excerpt from the registry and a list of management board members.
Anybody can participate in Neufund’s Initial Capital Building Mechanism (→ICBM), given that she is not based in the US or has a US citizenship. Neufund tokens themselves are not securities, commodities, swaps on either securities or commodities, or similar financial instruments. Nevertheless, it was decided that US citizens, residents and entities should be excluded from reserving funds to invest on the Neufund platform. This is mainly due to the logistical challenges that come with respective regulations. With the platform launch, we will ask you to go through an authorisation process for both your and our safety.
Germany offers a sound legal ground for ambitious projects. We remain open for developments in other jurisdictions that may prove advantageous for Neufund in the future. However, we are already able to do our business globally thanks to our innovative legal structure built under German law.
Neufund ensures that the data and funds on its platform are protected against the kind of threats that compromised TheDAO. We will keep all our assets in cold storage, i.e. hardware wallets through proper procedures. By way of contrast, TheDAO was hacked because the related Ether (ETH) were kept in smart contracts. On top of this built-in security, we will both offer education to our users and open source our critical code for audits from the community.
Ethereum is the most advanced public blockchain which excels through its high programmability. It facilitates the involvement of smart contracts, which offer self-enforceable mechanisms enshrined in code. This allows to accommodate the construction of complex applications, so called Decentralised Applications (DApps). Ethereum has thus proved to be a highly valuable and sustainable project to which we contribute gladly.