Why Talent Limited Companies Cannot Raise Capital if Valued for Less Than $100,000


 
Darren Moore
Last Updated: 3 months ago

ACE uses a direct listing methodology when it comes to intital Talent Co Cap Raises, meaning the Talent Co decides their pre-money (pre-investment) valuation when setting capital raise parameters. ACE (or a 3rd party) does not valuate Talent Limited Companies before they are listed and begin their initial capital raise.

However, ACE does not allow Talent Cos with a pre-money (pre-investment) valuation less than $100,000 to be listed because:

Due the mechanics of ACE technology, minimum listing valuation thresholds must occur in multiples of 10. Meaning ACE can set minimum valuation listing thresholds at $10,000, $100,000, $1,000,000 and so on.

ACE has decided to make the threshold for listing $100,000 because at $10,000, an Investor could own 49% of a Talent Co for only investing $4,900, and the Talent Co cannot raise anymore capital due to Reason #2.

Conversely, ACE did not decide to make the minimum valuation threshold $1,000,000 because many Talent do not have a track record of existing cash flows, and it would bar many Talent Co from listing on ACE because it'd be impossible to justify their valuation, if not deterring Talent Cos outright from considering ACE.

ACE does not allow more than 49% of the SAFEs or shares of a Talent Co to be sold on ACE.

 



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