So I'm really interested in your project. Can you provide more details about how exactly equity can become flexible when on blockchain? Will it be the same no matter which country you are in? Or can your protocol adapt to each new location? Super cool idea!
Extracted from our
white paper:
For startups, 92% of new ventures fail within the first three years. This is in spite of increasing venture capital - average deals for angel, seed, and early-stage rounds have grown to $1-5 M in 2017. This stressful phase all startups must survive as they compete for growth financing, is often referred to as the “Valley of Death."
Companies address the “valley” by bootstrapping to stronger business cases. With no money, ownership equity or shares/stock options are used to incentivize key talent (co-founders, advisors, labor, etc.) early; risk is high, but so is potential for returns in cases of success. Vesting clauses are used to keep workers accountable, distributing equity over time to those who stay. It’s an expensive and long process usually limited to retain executive talent. There’s no flexibility for workers to earn based on actual contributions; and no protection for companies from giving up unearned compensation due to unanticipated fluctuations in valuations. Accordingly, this doesn’t resolve a company’s cash situation as vesting clauses don’t bring any additional liquidity.
Today there’s high distrust between companies and labor; frequently drafting vesting clauses is beyond the financial capabilities of most startups. Manual calculation and distribution is possible, but tedious and highly inadvisable without legal counsel. A decentralized application ensures security, due to a hash-based proof-of-work chain; transparency, as all records are on a public distributed ledger; and efficiency, as it doesn’t deviate from proven practices.
Quidli enables companies to “unlock” equity to build flexibility into compensation and to increase inclusivity in employment models, in order to accelerate without immediately needing to have cash on hand. As such, it increases liquidity, disrupting dependencies on external funding, services, and on inflexible compensation plans.