# Governance and Voting Mechanism

**Last updated:** 2025-01-27  
**Version:** 1.0

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**🧭 Navigation:**
- [← Back to Contents](../profile/README.md)
- [← For Investors](for-investors.md)
- [📊 Business Model](business-model.md) →
- [💰 Financial Calculations](financial-calculations.md) →

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## 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

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## 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

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## 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

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## 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

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## 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

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## 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

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## 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)

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**Last updated:** 2025-01-27  
**Version:** 1.0

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**🧭 Navigation:**
- [← Back to Contents](../profile/README.md)
- [← For Investors](for-investors.md)
- [📊 Business Model](business-model.md) →
- [💰 Financial Calculations](financial-calculations.md) →