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Fairmint

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Run and manage a Rolling SAFE offering to let employees and supporters continuously buy and earn equity

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Founder(s):  
Thibauld Favre
Joris Delanoue
This post was written by 
Justine Humenansky
and edited by 
Justine Humenansky
 & 

Overview

What is it?

Fairmint provides your company with a full-featured stakeholder backend to run and manage a Rolling SAFE offering. Fairmint’s rolling agreement for future equity is an innovation on the classic SAFE created by Y Combinator 10 years ago. SAFE stands for Simple Agreement for Future Equity and is an agreement between an investor and a company that provides the investor with rights to future equity in the company without determining a specific price per share at the time of the initial investment. The Rolling SAFE is similar but allows for investment in a company at any time, with an implied valuation that grows automatically as more funds are raised. As of September 2021, Fairmint has raised $5.8M on a rolling basis (representing 32% equity) since September, 2020 using their own product.

What problem does it solve?

Unlike traditional equity fundraising, a rolling SAFE allows qualified investors to invest in a company at any time. This allows founders to spend their time building instead of fundraising and to link valuation more closely to current business momentum. Since rolling SAFEs provide investors with financial rights, but not governance rights, founders also maintain more control over their companies relative to traditional funding options. 

Since these offerings occur on the Ethereum blockchain, compliance can be enforced on-chain (lock-up period, transfer restrictions, investor eligibility, etc.) and ERC-20 compatibility allows investors to access immediate liquidity via integration with DeFi protocols. 

This structure enables companies to build more support among their communities by granting them access to wealth-building financial products. 

Rolling SAFEs can also replace ESOPs or be used to create an automated stakeholders incentivization plan. 

How does it work?

Fairmint provides an annotated legal template that can be easily reviewed and adapted by your company’s legal counsel. 

In Fairmint’s Rolling SAFE offerings, stakeholders receive an equity security that represents a right to future equity in the company and which will be converted into company stock when a liquidity event (IPO or sale) occurs.

Fairmint fundraises run on top of the Ethereum blockchain and are ERC-20 compatible. 

Fairmint offers a full-featured stakeholder management back-end, available on a tiered pricing model, to manage continuous raises. 

When fully subscribed, founders can manually allocate more equity and increase the company valuation. 

Previous investors can upgrade their SAFE, convertible notes, or shares to a Rolling SAFE offering. 

The onboarding process is as follows:

  • Decide on equity allocation (and initial valuation) 
  • Draft the fundraising agreement using Fairmint’s template, consulting your legal counsel 
  • Send elements of brand identity to customize stakeholder management backend
  • Place “Invest now” or similar call-to-action button on website

How do I use it?

DAO Masters Insights

Why it's cool:

Fairmint allows for continuous fundraising and immediate liquidity while enabling a company’s core supporters to participate in the company’s upside. 

Challenges:

Due to regulatory complexity, Fairmint only serves companies headquartered in the U.S. 

For now, Fairmint is now mostly working with web2 companies, but they’re seeing more interest from DAOs that are exploring setting up a U.S. legal entity.

Words of advice:

Expected future updates:

As of today, Fairmint doesn’t have an offering for 100% crypto-native organizations. However, given their current tech, it doesn’t seem that it would be too complicated to serve crypto-native organizations in the future if the demand is there. 

Getting Started

Fill out a short form to request early access and schedule a demo. You can also invest in Fairmint itself.

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