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# Governance and Voting Mechanism
**Last updated:** 2025-01-27
**Version:** 1.0
---
## Governance Token Distribution
### Ownership Structure
- **Founder:** 70% of tokens (2,100,000 tokens)
- **Investors (LP):** up to 30% of tokens (900,000 tokens)
- **Total tokens:** 3,000,000
### Model Feature
- LP investors receive governance tokens → effectively become GPs with voting rights
- Investors (30%) have real governance rights, not just dividend rights
---
## Quorum and Voting Mechanism
### Quorum for Decision-Making
- **Initial quorum:** 51% of all governance tokens
- **Dynamic change:** Quorum is determined by token holders through voting
- **Protection against single control:** Quorum can be increased from 51% to 70% to exclude the risk of single control of the treasury
### How the Quorum Mechanism Works
1. Token holders can propose quorum changes through the voting system
2. Changing the quorum requires voting with the current quorum (51% or higher)
3. Quorum can be increased to 70%, meaning the founder (70%) cannot make decisions unilaterally
4. This protects investor interests (30%) and prevents abuse of control
### Technical Implementation
- On-chain voting through smart contracts
- Transparent vote counting system
- Each token = one vote
- Voting results are recorded in the blockchain and available for verification
---
## On-Chain Voting Procedure
### Who Can Create Proposals
- All governance token holders (founder and investors)
- Ability to create proposals for voting
### Voting Process
1. **Proposal creation:** Any token holder can create a proposal
2. **Discussion period:** Proposal is put up for discussion
3. **Voting:** Token holders vote for or against the proposal
4. **Vote counting:** Votes are counted proportionally to the number of tokens
5. **Decision-making:** Decision is made if ≥ quorum voted for it (51% or higher, depending on current value)
### Types of Decisions Requiring Voting
- Quorum changes (51% → 70% or vice versa)
- Fund strategic decisions
- Changes to profit distribution rules (15% / 15% / 70%)
- Large investments in portfolio companies
- Governance structure changes
- Other critical decisions affecting the fund
---
## Balance of Founder (70%) and Investor (30%) Rights
### Founder Rights (70%)
- Strategic leadership and fund development
- Technical support and platform development
- Participation in voting with 70% weight
- Creating proposals for voting
### Investor Rights (30%)
- Participation in voting with up to 30% weight (depending on ownership share)
- Creating proposals for voting
- Ability to block decisions if quorum is increased to 70%
- Information rights (access to reports, financial data)
- Access to accelerator projects by selected business activity types
- Co-investment opportunities in deals
### Minority Protection Mechanisms (30%)
1. **Increasing quorum to 70%:** Investors can vote to increase the quorum, preventing unilateral decision-making by the founder
2. **Right to create proposals:** Investors can initiate voting on important issues
3. **Information rights:** Transparent access to financial reports and fund metrics
4. **Transparency:** All decisions are recorded in the blockchain and available for verification
### Can the Founder (70%) Make Decisions Unilaterally?
- **With 51% quorum:** Founder can make decisions unilaterally, as 70% > 51%
- **With 70% quorum:** Founder cannot make decisions unilaterally, investor consent is required
- Investors can vote to increase the quorum to 70% to protect their interests
---
## Information and Reporting Rights
### Investor Information Rights
- Access to fund financial reports
- Information about portfolio companies and their development
- Metrics and analytics by selected business activity types
- Transparent governance system through blockchain
### Reporting Frequency
- Regular reports on treasury receipts
- Information on profit distribution (dividends, expenses, investments)
- Portfolio company reports
- Transparency of all transactions through blockchain
---
## Voting Mechanism Usage Examples
### Example 1: Increasing Quorum to 70%
- Investors create a proposal to increase quorum from 51% to 70%
- Voting takes place with current quorum of 51%
- If the proposal is approved, quorum increases to 70%
- Now the founder (70%) cannot make decisions unilaterally
### Example 2: Strategic Decision
- Founder or investors create a proposal for a large investment
- Voting takes place with 51% quorum (or 70% if increased)
- Decision is made if ≥ quorum voted for it
### Example 3: Changing Profit Distribution Rules
- Proposal to change distribution (e.g., 20% / 15% / 65%)
- Voting with 51% or higher quorum is required
- Decision is made by majority vote
---
## Additional Materials
- **Investment proposal:** [for-investors.md](for-investors.md)
- **Business model:** [business-model.md](business-model.md)
- **Glossary of terms:** [GLOSSARY.md](GLOSSARY.md)
---
**Last updated:** 2025-01-27
**Version:** 1.0