Invest in OpenGrants: Introducing Our Continuous Securities Offering

TL;DR: Help us build modern, equitable funding! We just launched our Continuous Securities Offering, a new way of funding startups. This structure lets us share the upside of OpenGrants with people who care about our mission.

The Fundraise

The CAFE (Continuous Agreement for Future Equity) enables OpenGrants to align our financial success with that of our stakeholders. We are thrilled to offer you the ability to experience the outsized returns that are generated by your patronage, indirect contributions, and direct work.

The CAFE Offering—purchase $GRANT

As investors, entrepreneurs, taxpayers, stakeholders, consultants, and users of OpenGrants, you represent important parts of our ecosystem. We want to ensure that you benefit from the value you create for this company on a regular basis.

Features of This Offering:

  • $GRANT initial offering will be $10.00 USD per $GRANT
  • Highly liquid. Single year lockup with access to secondary market trading
  • Converts to shares with 1x liquidation preference on exit event (acquisition or IPO)

RAISE DETAILS

  • Company Valuation: $5,000,000 USD
  • $GRANT Price: $10 USD
  • Minimum Investment: $500 USD
  • Equity Allocation: 10%
  • Lock Up Period: 12 Months
  • Website to Invest: Click Here to Invest

See the Investor FAQ section below for all of the details. If you are interested in investing, please click here.

About OpenGrants

OpenGrants is on a mission to enable and power intelligent funding distribution for the world. We are creating a system that is transparent, accessible, and equitable. The OpenGrants software platform and network of users—and the data generated by them—unlocks new levels of communication, insight, and targeted action between multiple layers of funders and applicants. We’re organizing public entities, private organizations, and individuals in new ways to create solutions that allow our society to be strengthened by technological change, rather than crumble beneath it.

Metrics

OpenGrants is now profitable. Although we now have an infinite runway, we want to do more, and do it quickly. Read our memo for more details on our future plans.

  • MRR Growth 2020 Q3 – Q4: +1,053.5% (from $1.7k to $19.8K)
  • Customer (paying) Growth 2020 Q3 – Q4: +356.5% (from 47 to 210)
  • User Growth 2020 Q3 – Q4: 431% (from 640 to 1.6K)
  • Total Transaction Volume 2020 Q3 – Q4: +387% (from $10.9K to $67.4K)

More OpenGrants Info

OpenGrants CAFE Presentation

OpenGrants CAFE

Investment Memo

OpenGrants Investment Memo

Investor FAQ’s

Why is the CAFE good for investors?

  • Liquidity. First and foremost, the CAFE gives investors a clearer path to liquidity. Unlike traditional equity which is notoriously illiquid, the CAFE is a standardized digital security and its liquidity can be more easily orchestrated by leveraging the decentralized finance infrastructure and AMMs in particular.
  • Access. The CAFE opens a new market for investors, especially angel investors, as they can now permissionlessly invest in growth oriented companies at stages that they could not access before.
  • Upside. The CAFE offering being naturally anti-dilutive, CAFE holders are more likely to capture their fair upside than if they were holding other equity instruments.

What type of shares does a CAFE convert to?

By default, the CAFE converts to preferred non-voting shares, which benefit from a 1x liquidation preference and share the same seniority as most SAFEs. However, each Company may have different considerations or other securities that may impact how its particular CAFE is treated.

If you are not familiar with the term liquidation preference, it gives investors the option to get their initial investment back (if at all possible) in case the equity conversion would result in them getting less than their initial investment. It’s a very standard practice to give investors some downside protection.

When will a CAFE convert to equity?

By default, the CAFE converts to equity when a triggering event occurs: IPO of the company, sale of the company or bankruptcy filing. When a triggering event occurs, CAFE investors will collectively receive the equity allocation decided by the company at the start when they decided to start issuing CAFEs. It is important to note that the equity allocation is being calculated at the triggering event which means that the equity allocation decided by the company is not diluted by subsequent financing rounds.

Can I sell a CAFE before it converts to equity?

Yes, subject to any applicable laws. As CAFEs are standard fully digital securities registered on the Ethereum blockchain, they are more easily tradable as they can leverage the decentralized finance infrastructure (like AMMs) in a compliant way. This CAFE is issued under a Reg D 506(c) exemption and has a 1 year lockup period.

When can I sell a CAFE?

There is a one year lockup period. After a year passes, you are free to sell your CAFE.

Do CAFE all have the same price?

No. The price of the CAFE rises with the number of CAFEs issued, similar to how valuation caps may arise over time with convertible instruments like SAFEs. So, the earlier you invest, the greater number of shares your CAFE will ultimately convert to due to a lower effective price per share.

This mechanism helps the company break the sort of deadlock that happens when investors all wait to see who else is going to invest. With the CAFE, investors can always wait, but the price increases every time someone invests and the larger the investment, the larger the price increase.

How is the price of a CAFE determined?

The price of a CAFE is proportional to the number of CAFE already issued. The price of a CAFE is a function of the number of CAFE already issued to investors. When the CAFE issuance begins, the price per CAFE is fixed until a certain amount of CAFE is sold. The initial price is determined by the valuation floor of the CAFE.

Example: a CAFE with an equity allocation target of 10% and a company valuation floor of $1M (set by the company) will start at a fixed price of $1 until the total amount invested reaches $100,000. Once the CAFE issuance reaches the valuation floor, the price of CAFE starts to increase proportionally to the number of CAFE issued to investors.

Does the CAFE provide voting rights?

No. By default, the CAFE does not provide its holder any governance rights.

Where is my CAFE recorded?

Proof of participation in a CAFE is recorded on the Ethereum blockchain. That’s one of the great things about the CAFE: it is a fully digital security and uses the Ethereum blockchain as an open & global system of record. So, the “fairtable” (this is what we call the capitalization table of the CAFE holders) of the company is always available.

However, we also recognize that privacy is important. As such, while CAFE records are stored on chain, personally identifiable information is not required to be held on chain and can be stored by the Company. Our CAFE offering is powered by Fairmint. Fairmint’s technology is able to reference hashes of certain data to ensure compliance with applicable KYC/AML and securities laws.

Can the company modify its equity allocation?

Yes, but by default, only to the advantage of CAFE holders. In the default form of CAFE, at any time, the company can decide to increase the equity allocation of the CAFE offering, but it can never decrease it. Also, at any time, current shareholders can work with the company and their legal counsel to create a conversion plan to convert part or all of their equity into CAFE which will also increase the equity allocated to the CAFE offering.

Why the CAFE and not a SAFE?

OpenGrants believes in the future of stakeholder capitalism. We want to open up the opportunity to invest for everyone involved in paying taxes, applying for grants, writing grants, and all other users, super-fans and professional investors.

The following outlines the advantages and differences between the SAFE and the CAFE. You can see how the features outlined below correspond to our goals and vision for the future.

CAFE vs SAFE

The CAFE is the perfect combination between the SAFE and Decentralized Finance (DeFi). Using the CAFE, companies can get the most value out of their equity by aligning the financial interest of founders, investors and stakeholders at large to the financial success of the company. The CAFE is a win for everyone:

CAFE Benefits

Ready to invest? Do you have more questions? Click on the Link Below 👇

Invest in the OpenGrants CAFE

DISCLAIMER: This is not investment advice. Talk to your own lawyer/advisor. Financial projections are forward looking statements and should not be relied upon when making decisions.