The article explains the relationship between Talent listings and Investors of ACE Listings and Capital Raises, and who’s responsible for what. This is what you’re agreeing to when you create or invest in a ACE Listings and Capital Raises.
ACE provides a listing and exchange platform for Talent to offer and sell digital Tokens that represent either Simple Agreement for Future Equity (“Safe”) or common non-voting stock (“Stock”), in their talent company, in effect, shareholding via shareholders.
When Talent lists, holds a capital raise (i.e. offers), and ultimately sells Token to Investors on ACE, they’re inviting other people to invest in their pursuit of success by purchasing (subscribing to) Safe(s) or Stock(s), represented by digital Tokens, of the company associated to the Talent. These Tokens are representative of real assets, Safe or Stock managed with smart contracts and maintained on a digital block chain ledger.
Prior to listing on ACE, Talent shall either 1) verify their existing Talent Co (along with any liabilities, liens, or obligations that existing), or 2) form a Talent Limited Liability Company.
Anyone who purchases the Tokens is accepting the Talent’s offer to sell the digital representation of the Safe or Stock, and then shall hold Tokens of the talent company until they are sold to others or bought back by the Talent.
By listing on ACE, the Talent Co is then unable to dilute already Safe or Stock on the ACE Platform. The Talent Co is not able to reduce the real or representative % shareholding by issuing additional shares via other means or offering. I.e. a Talent Co cannot issue additional shares or take any action or enter any agreement, reducing the pro rata shareholding of existing investors ACE from 20% to 10%, as an example.
Safe(s), Stock, or other shareholding issued via ACE survives bankruptcy, reincorporation, or new contractual obligations related to the art. ACE shareholders are ‘side-by-side’ with the Talent in their agreements, with exception to seniority in financial obligations as described on the Safe and Stock legal agreements.
Any and all revenue the Talent earns, directly or indirectly, or as a consequence of their art, may be subject to distributions back to Investors. This is commonly referred to as ‘360° income’. This may include relevant Talent income realized personally, which should be accounted for via the Talent Company. If distributions are make, Investors shall be given pro rata distributions. I.e. if investors own 20% of Talent Co, 20% of all income shall be distributed to Investors. ACE investment shall not be subject to debt, liens, or other 3rd party liabilities that preceded the investment.
With exception to seniority in financial obligations as described on the Safe and Stock legal agreements, Safe(s), Stock, or other shareholding issued via ACE shall not be subordinated to any other form of funding. Meaning, ACE Talent shareholders must be paid before any other party, which may include before the Talent, at their pro rata distribution.
ACE is not a part of the contract between the Talent Co and Investors, rather ACE is non-regulated exchange and platform — the contract is a direct legal agreement between Talent and their Investors. Here are the terms that govern that agreement:
As Tokens are sold to Investors, which represent Safe(s), Stock, or other shareholding of the Talent Co, the Talent Co must use the funds for Authorized Factors of Production (uses directly related to furthering the commercial success of the Talent Co), pursue success and income, and with the objective to provide distributions back to shareholders. The ACE platform may automate much of this distribution, accountability, and fulfillment of the Agreement, but the Talent shall make their best effort to satisfy their agreement with shareholders.
Throughout the process, Talent owes their Investors a high standard of effort, honest communication, and a dedication to further their commercial success.
Commercial Success can best be defined as earning enough financial (monetary) compensation, and then distributing pro rata returns to Investors, to then provide the Investors substantial monetary return on their investment, and in a timely manner.
At the same time, Investors must understand that when they invest in Talent by purchasing Tokens that represent Safe(s), Stock, or other shareholding in the Talent Co on ACE, they’re helping to create new levels of commercial success — not necessarily buying into existing revenue or contracts that already exist. There may be changes or delays, and there’s a chance something could happen that prevents the Talent from being able to realize commercial success as communicated or promised.
If the Talent is unable to achieve commercial success and fulfill returns on investment to Token-holders, they’ve failed to live up to the basic obligations of this agreement. To right this, they must make every reasonable effort to find another way of bringing revenue and financial returns to the best possible conclusion for Investors. Talent in this position has only remedied the situation and met their obligations to Investors if:
- they post an update that explains what work has been done, how funds were used, and what prevents them from reaching commercial success as planned;
- they work diligently and in good faith to bring commercial success, and returns on investment, in a timeframe that’s communicated to Investors;
- they’re able to demonstrate that they’ve used funds appropriately and made every reasonable effort to reach commercial success as promised;
- they’ve been honest, and have made no material misrepresentations in their communication to Investors; and
- they offer to return any remaining funds to Investors who have not received their returns (in proportion to the amounts invested), or else explain how those funds in some alternate form.