= Coopshares. A new faircoop startup to develop everything : P2P equity crowdfunding, liquidity fund, coop investments fund and FairCoop developements funding
Draft document before the launch of the project. v. 0.5 2015. May 7
1. The Vision
Our plan is to create Coopshares, a descentralized cooperative destinated to provide faircoop and the global open cooperative ecosystem with sources for get funding and liquidity to make easier and less riskful for everyone to be involved in the transition to the new and social economy that is coming after capitalism.
Coopshares will be a key resource for the Fairstarts plan, to build a network of incubators and accelerators focused in open cooperativism and p2p commons production. (see: https://fair.coop/fairstarts-a-network-of-incubators-for-a-collaborative-economy-and-p2p-production/ )
2. The problems that Coopshares could solve
Acces to investments and different ways of funding is most probably the bigger problem that cooperatives, social enterprises and peer to peer production projects has faced always.
The legal difficulty to invest in a coop if you are not a member, the few tools existing to do it, or the vision of most of the investors that a coop or a social enterprise in not a good way to make money., are some of the difficults that coop enterpreneurs have in their way.
The ethical and cooperative banks are helping to have a way in this area, but they dont invest in riskful projects that are just beginning, or they loan only small amounts that makes possible to do only small projects, and this is one of the causes that corporations dominates the global economy, yet that every day more people prefer cooperatives.
There are tons of discussion around innovation related p2p, descentralization, funding,.. But this innovations have not yet arrived, to create a functional way to invest in innovative coops and not profit enterprises that will to change the world.
FairCoop as open global cooperative that focus in use p2p money to build a new economical system seems the logical agent to lead -amongst others- the solution of this big problem and Coopshares is a key proposal to put on the table to make it possible.
3. Functions of Coopshares. - Liquidity provider for monetary markets based in faircoin. The aim is to bring liquidity and stability to the faircoin open markets and make easier for investors to get in and get out of faircoin and related tokens. - Liquidity provider for cashout services creating resilence for cashin and cashout faircoin, in projects like fairtoearth.fairmarket and coopshares itself. - Develop and sustain a crowdfunding cryptoequity for faircoop ecosystem as a key resource of fairstarts project - Create a Cooperative Investment Fund for projects present at coopshares. - Provide funding for develop FairCoop ecosystem in a way that investors have big possibilities to recover, and yet get profit from this expenses.
4. FairCoop developements to be funded.
This funding aims to have the key for the FairCoop developements on the next 12 months
FairCoin 2.0. it will be an important blockchain innovation to make Faircoin blockchain work secured with proof of cooperation and bring to the world a really functional alternative to the current unfair systems that are based in node competitions, proof of work and proof of stake.
(A link to the white paper of this project will be added )
Coopshares Platform The platform would be able to use the better of some already existing cryptoequity platforms, to rebuild linked to the faircoin blockchain and support the new model of coop p2p equity explained here in the point 5.
Fairstarts developement With Coopshares other tools for sharing skills and knowledge will need to be build, and also the direct support and collaboration with local incubators will be a key to develop the Fairstarts network. Some expertise in coordination and developement will be important to make it possible. A short presentation of the project is here: https://fair.coop/fairstarts-a-network-of-incubators-for-a-collaborative-economy-and-p2p-production/
Fairmarket consolidation Fairmarket already has launched the alpha testing version. See here http://market.fair.coop After will come the beta that will be already functional. The way to the productive version to the full featured marketplace to build the postcapitalist economy network that all of us deserves.
FairCoop ecosystem developements There are endless work, to continue updating faircoop, extending the network, making new connections, improving the existing tools and dinamizing the participatory process until becames strong enough to launch the fairfunds. Improve a lot of tools... Sustain and take care of all the ecosystem, extend and promote local nodes around all the world... This work also deserves some funding.
Faircredit Faircredit is the most anticipated monetary tool of FairCoop ecosystem We have in hands a very complex developement to get the excellence building an innovative descentralized monetary system not only for the faircoop ecosystem, but also an example practical about how we could recover the sovereigny of the people in accesing to credit as a common. We need a commited team with big expertise to make this aim possible Yet is still current text http://www.fair.coop/faircredit but a new one will be done when we get the means to make this possible
5. The P2p equity crowdinvestment platform
One of the two main aims is to create a p2p equity (aka crypto equity) crowdinvestment platform focused in cooperatives, Social enterpresises, and p2p production projects. It will be endorsed by Faircoop and based in Faircoin.
This is an opportunity to give a new potent tool to groups that are engaged for build a better world and usually have problems to acces to investors and venture capital.
This p2p equity could confirm two ways of promoting investments depending if each coop/social startup is able to get incomes and share dividends or not.
There will be this two options:
A. If is a coop “for benefit” and have incomes
– The crypto equity could share dividends to the coop investors
B. If the startup is only for the commons and dont have incomes from goods or services.
– The crypto equity could share reputation to the coop investors. So in this second case it would be related to the open value system based on reputation that is going to be created (exists other social startups and research networks working in this stuff)
At the same time this cryptoequity could facilitate descentralized governance if the projects wants to be organized by this way
Faircoop could make a different, related other cryptoequity options, creating the possibility to invest in coop projects without the gambling component of the assets trading that exist in the crypto currencies environment.
The way choosed to do that could be to make cashin and cashout of every equity linked to grow and decrease of number of shares instead of value of every share. So, in a equity market people could:
– buy shares and the equity receive faircoin
– sell shares, and the equity needs to pay faircoin
– If you want to sell but there are someone aiming to buy, you can trade so the equity not needs to change the number of shares.
Therefore the number of faircoin that have the equity (their marketcap in faircoin, changes directly depending of people that is willing to buy or to sell.
Because the coop needs to have a reserve for rebuying shares the plan would be to save about the 10% of reserve in hands of the p2p equity crowdfunding platorm . Also the liquidity fund, explained in next point, will help to cover that adding additional reserves if needed.
In this mechanism the investors profit could come from the growing of the faircoin value, and could come also from dividends if the coop have profit. And, when the coops not distribute dividends they could recive reputation, for making meaningful the investment in this kind of projects
6. Liquidity Fund
For making faircoin a suitable tool for savings and payments in internet is a must to have easy ways to get faircoins and withdrawal to fiat currencies.
Resources like Fairtoearth, Fairmarket, extension in local shop,s etc will have dependency of this liquidity. At the same time because the tokens on the p2p equity will be based on faircoin, is important for this project itself to count with an important amount of liquidity.
The confidence for ethical shops coming to the fairmarket or for users able to change in Fairtoearth when they need, will depend to have that services working 100% in every time that they need.
Also the liquidity fund, will help for getting and stable market of faircoins in the open trading exchanges like bittrex, helping to faircoop and getfaircoin.net on bringing stability of the price, which is an important feature, for using Fairmarket for selling goods or services, and also for trading equities in Coopshares.
Finally, liquidity can be a source of profit for Coopshares because of trading, credit loans, and others..
7. Coopshares Investment fund (CIF)
We will build an investment fund that will distribute funds and the risk associated between a big portion of the projects that will crowdinvest themselves in Coopshares p2p equity platform.
This will be a way to secure that the interesting projects will have some investment for the fact to choose and be accepted in Coopshares. Also the distribution made by the CIF will make lower the risk by promoting at the same time a long number of projects in a similar way that how Investment funds works in the official financial system but adapted to the commons based open cooperative projects.
The member of Coopshares will be able to decite together by a democratic system which projects will be funded.
Some rules will be done to manage the risk, for example dont invest more than 5% of the fund to one project.
8. Crowd investment Coopshares campaign
Will create different batch of open investment round campaigns, and people will be able to invest as many money as they want.
There will be two crowd investment products
A) Faircoin euro hybrid Investment Fund (Fehif )
If you invest in $ / € / Bitcoin, etc... your investment will be tied 50% to € and 50% to FAIR value
Related the objectives, this investments will be distributed like this - 10% will be spend in developements. - 10% will be focused for an investment fund in projects that promote themselves in the Coopshares platform. The Coopshares Investment fund already explained in the previous post - 80% will be used for the liquidity fund
B) Faircoin Investment Fund (FIF)
If you invest in Faircoin your investment will be tied 100% in FAIR
Related the objectives this investments will be distributed like this - 10% will be spend in developements. - 40% will be focused for an investment fund in projects that are promote in the Coopshares platform. The Coopshares Investment fund already explained in the previous post - 50% will be used for the liquidity fund
The goal of the first campaign that will be launched with the Ouishare Fest will be setup Faircoin and FairCoop in the next stage of developement getting at least
100000 € for Faircoop developements
200000 € for Coopshares investments Fund
700000 € For a liquidity fund to secure the FairCoop economical System.
And putting FairCoin bigger than 5 M $ in marketcap, thta means a value of 1 M $ for the fairfunds and as a part of that 100000 $ for the pooled fund.
Every year if needed a new crowdinvestment campaign would be launched.
9. Get Faircoin for the Faircoin euro hybrid Investment Fund (Fehif )
For this first crowdinvestment campaign, all the investment will be called 50% in faircoin and 50% Euros. This means that 50% of the funds will be converted to FairCoin. Because the market for selling faircoin has low volume, so this needs to be organized in a way that dont became a problem for FairCoop neither for the investors.
To make this possible. The process will be like this.
1. Someone invest with their local currency 2. 50% funds converted to bitcoin to buy faircoin. Other 50% remain in euros. 3. After buying faircoin we will notice you which has been the number of faircoin bought with your offer.
The amount determined of faircoin will depend of the faircoin price but the crowd investment campaign will setup a garantee of upper price possible, that can be garanteed. This value will be defined before the launch.
The propose that we are thinking is like this: today the price is 1 eur = 60 Fair, but gived the demand expected for Coopshares we only can garanty the price of 1 eur = 30 Fair. This means that we will put to the campaign fund for as lower price as possible but not more expensive than 1 = 20 Fair This limit equal or lower than 1 € = 20 Fair, will be garanteed until a limited amount of investment, for example 200000 EUR
If this amount is covered we will setup a new limit after that depending of how the market has evolved.
10. Building Coopshares platform
We will constitute the Coopshares cryptoequity platform where all the funds are connected to one token each. The Coopshares funds products will be traded both there: FEHIF and FIF
FEHIF shares value will be the middle of the Euro and Faircoin value, meanwhile Fif value will be tied to faircoin.
The Scheduled time to build this platform and begin to operate will be november 2015. Therefore the funds invested in this first campaign needs to remain in Coopshares, at least until setting up the platform.
11. Coopshares dividends and losses
Coopshares will be the tool used to distribute dividends.
After taking in account incomes and expenses. the profits or losses of this investment fund will be distributed to the tokens holders as a dividend in monthly bases. The first time will be at the launch of Coopshares platform,. After that it will be distributed again every month.
The incomes coming from the growth of faircoin not will be included as a dividend because the token will be related faircoin, So you notice the growing of this value when cashout.
The sources of losses and incomes will be.
a- Loses for expenses in the faircoop developement (1/10 of total investment)
b – Profit or losses by trading on the money market doing the function of market stability.
c – Profit by lending liquidity to the projects that need it (for example fairtoearth)
d – Profit or loses coming from Coops funded in Coopshares.
12. The human part. How this p2p startup will be organized
Coopshares could have a developement team leaded by Enric Duran, and formed by developement and management forces working already in FairCoop. This team will be extended through different contacts and partners, and specially with the funding coming from this crowdinvestment campaign
For the management of coophsares, a system of descentralized governance will be implement which will mix voting based in the cooperative values of 1 person - 1 vote, with some ways to take in account the amount that everyone has invested when the decitions are related economical choises.
The voting system could be used to decide about things like estrategical partnerships, new cryptoequities, key economical decitions etc..
A model that we can use to be adpated for Coopshares is the Swarm -Standford document https://fair.coop/?get_group_doc=50/1430309418-SWARMSTANFORDModelDCOTemplate.pdf
13. Platforms for the crowdinvestment and legal cover.
We are yet working on that and will update for the final version of the document.