The provision of funding for startups and other new projects is undergoing widespread growth, commodification through established networks, associations, and platforms, and change due to new frameworks for providing funds and technologies that empower entrepreneurs.
The purpose of the Accord Venture and Token Working Group is to produce specifications and open source tools to improve the practice and options available for startup funding and to the benefit of founders, investors, and the broader entrepreneurial ecosystem. Key to this end is to make investment documents “smart” and supporting frameworks for digital token sales. Investment documents subject to being digitized and automated throughout the lifecycle of a deal include term sheets, stock purchase agreements, investor rights agreement, and certificates of incorporation.
Crowd sales of digital tokens to fund companies using blockchain networks has newly enabled nascent companies and projects with no products, established network, or revenue, to raise amounts of funds traditionally out of reach and rivaling that of established venture capital. Numerous different approaches have emerged, both from an internal practice, structuring, and governance framework, for token sales as well as for regulatory compliance within and across jurisdictions. Likewise, regulators across the globe have made announcements regarding the applicability of securities laws to token sales, typically without definitive answers or bright line rules. The Venture and Token Sales Working Group will seek to establish open source tools, innovative use cases, and a coherent framework for the different approaches to token sales to promote the potentially significant benefits of widespread tokenization throughout the global economy.