Do we (community members) want to invest long term into Shell Protocol EQUITY?

I had a great video chat with Kenny the other day and it went longer than expected. I’m excited at the synergy they have and I’m hopeful for the future of Shell Protocol.

Some takeaways from our conversation:
-They raised some money previously in a pre-seed round which got v1 launched.
-They have learned all they want from v1 now. There’s really not an incentive to promote v1 or incentivize liquidity there anymore. They don’t need liquidity–they need investment/runway to build v2 and beyond.
-Therefore, Shell is raising a seed round of a few million dollars. This will help build v2 and beyond.

Since Shell is primarily in the USA, doing a token sale and allowing investments from Americans is very tricky. It’s much less regulatory scrutiny to partner with a helpful VC.

That being said, the ultimate success of Shell depends on the COMMUNITY & USERS.
-This is probably the only reason why they are likely going to do retroactive LP rewards—not because people are adding incredible value now—but to reward help grow loyal and evangelistic users. (Post thoughts on retroactive LP rewards in this thread. Not here, please.)

When investing in equity (even if that equity represents XX% of the token supply), the realization of this profit will be in several years. I have no inside news and there are no plans but certainly other projects have locked tokens for team members and investors to prevent big dumps of the token early on.

In conclusion:
-Are you interested in investing in equity in Shell (which ultimately represents a percentage of the total token supply someday? Keep in mind that you won’t realize the profits from this investment for quite some time—this is very different from supplying liquidity in v2 which are your funds that you can withdraw.
-Are you American or International?
-Are you considered to be an accredited investor?

Would you want to invest directly (likely $50k or $100k minimums) or through a SPV with a lower minimum?

An SPV creates a single-purpose entity composed of many (oftentimes smaller) investors but ultimately shows up on Shell’s cap table as a single entity. The SPV takes the burden of paperwork and compliance and makes it easy for Shell. All things being equal, Shell would rather focus on developing than paperwork and CFO type stuff.

Investing directly or via SPV seems like the only safe and compliant options, but please post here if you have other ideas. Keep in mind it must be legal in the USA and also not so complex that it takes months of paperwork and ultimately delays v2 launch.

:point_down: :point_down: :point_down: :point_down:
What are your thoughts and ideas on investing in the development of v2 and beyond (likely long term equity investment?? (Post thoughts on retroactive LP rewards in this thread. Not here, please.)

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Thanks for the thread, i have no knowledge of the legal requirements of this but any “community members” raise which only allowed accredited investors would exclude a lot of people so might not be a good option (god accredited investor rules are the dumbest thing). I say this as a non American accredited investor who would likely qualify for any format of sale.

Also afaik, with these rounds teams are usually looking for money + whatever else you can offer. At least theoretically VC’s and funds can provide more help to the project than raising from community.

For me the main thing would be making $SEA a desirable asset to hold right from the beginning (can either buy public token sale or upon token release), this allows anyone to get in once the token is released and bet on the success of the protocol, just need to get the incentives and distribution right so early buyers dont get destroyed

Thanks Joe for the reply,

I agree the ‘accredited investor rules’ are the dumbest thing but there MAY be ways to do it more inclusively if there was a lot interest from non-accredited investors.

Since you’re not in the USA and there are no legal problems, are you interested in investing in Shell’s equity raise or do you plan to participate in the Shell ecosystem in other ways?

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Yep im certainly interested if thats the route the team decides to go :slight_smile:

The team tasked me with figuring out the will of the community. Almost certainly at this point they will go the route of the VCs—probably in the form of a lead investor, two smaller investors, and then the community IF there is enough interest. Likely the team would negotiate the terms with the lead investor, and then everyone else follows suit and agrees to the same terms.

There are two “issues”. First, to invest directly there will probably be minimums $50k or $100k OR we collectively do it as a SPV (special purpose vehicle). Second, the issue is accredited investors IF someone is within the USA. Using an SPV there are more options to relax those rules (in various LEGAL ways which I won’t get into yet.)

Regardless, we collectively need to come up with at least a few hundred thousand dollars though. The team is wanting to raise a few million. Do you have any ideas how we can collect the data on how much someone is willing to invest, if they are Americans or not, and if they are accredited investors or not? That’s the info we need to compile if we want this to happen. :slight_smile:

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I am Not American and I want to invest in the team. Maybe the team can create a google form to collect the potential interest from the community.

Thanks for the team for the considering the community.

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Thanks for the elaboration, sounds like it could be a good balance. Im pretty certain there is more than $3m the community would like to invest, so it becomes more of an issue of how to split it and if there are any minimums. Google form sounds like a great idea

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I’d like to invest as well. Non-American. Direct or through an SPV.

Allowing only ‘Accredited investors’ might seem like a stupid rule but it’s there for a reason and will protect the team from any trouble down the road

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Would be interested as well, but US citizen/non-accredited (though no longer based in the US if that makes any difference, probably not). SPV preferred. Even if it doesn’t work amazing that this is being thought of and much appreciated!

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Reading over these comments I can’t help but gawk at the glaring and broken process that is Equity Investment in the USA.

  • The paperwork
  • The legal and KYC framework
  • The kneecap requirements to be deemed an accredited investor

It is enough to block more than half the people I believe would be eager to back this awesome project! People who want to be a part of this.

What if the raise was done as a fractionalized NFT? Could that leapfrog all the conundrums of raising the traditional way?

People who interacted with the protocol pre-snapshot could be given first dibs on investing (with a cap of course)?

These NFT tokens could be imbued with value add properties within the SHELL ecosystem.

Yield Boosters, VIP liquidity pools, savings on fees, or special access come to mind. Maybe I am completely out of line here, just trying to be creative.

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Those are all very good thoughts. As far as I understand it the team is really set on equity. It’s safer for them. The option for us is through a SPV (legal entity). You can hire 3rd parties for that or if I was the one to lead the charge and create it (I have a background in this generally and am a bit of a compliance and paperwork nerd), I have thought about tokenizing the equity of the membership units of the SPV. It would be cool but also very transparent. I don’t think the equity can trade as there are probably legal restrictions on that.

I want the $SEA token, we all want the $SEA token, but my understanding is that the team really doesn’t want to launch a token now—it will be in ~4-6 months when v2 is released. I don’t know that the team is considering anything other than buying straight equity (which ultimately represents SEA tokens as the business and investors would retain XX%.)

Keep the thoughts coming everyone!

As a Non-US accredited I would be very interesting in investing as an individual. In general I do think having things done properly may be safer, but would be pretty happy with non-accredited being allowed since I do think this stupid in general, especially in the context of crypto.

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Thanks for the reply. No matter what it needs to be legally compliant—but there are legal ways to involve non-accredited investors, especially with a SPV. I don’t know if it’s worth the time or costs considering it’s only for Americans anyway.

It seems there are a lot of non-USA people in this community so that makes everything so much easier. :slight_smile:

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I am an accredited investor in the US. I would be interested in participating in your next round of financing.

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probably would be good to make sure people are actually community members (ie. LP’s) rather than just here for a good deal

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I should probably clarify a few things about the raise:

  1. The SEA token will not be available until after Shell v2 ships. We are aiming to have that ready this summer.

  2. We are not selling tokens at this time. Instead, we are selling equity in Cowri Labs, a Delaware C-corp. Cowri Labs is effectively a sub-contractor for the Shell Protocol. The plan is to allocate some portion of the tokens to Cowri Labs in return for building out the core infrastructure.

  3. Token allocations have not been decided yet

I find the prospect of a community-driven investment vehicle extremely exciting. Something worth pursuing. With that said, I’m not a lawyer and have no idea how feasible this will be in practice. There is a considerable amount of procedural uncertainty at the moment.

I think the next step is to come up with a tentative list of people who might be interested? Perhaps we should also find a point person (or a group of people) who can take the lead on this? Myfrogger has been leading the charge so far. And Joe has been an active member since day 1 of Shell. But this is a community effort and the community should weigh in.

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myfrogger seems to know what he’s talking about, do you want to set up a google form so we can get more detailed info about participants? Im happy to help wherever i can too

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I think the community are here ready to support the project and the efforts of Myfrogger and Joe!

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I’m very happy to see what the team thinks about the community. It is very cool.

It’s cool that in the summer we will most likely see version 2. I am very excited!

About quiestions:
I am very interested in investing in Cowri Labs (we see that team is working hard and know how to deliver).
I am international invester, but i am accredited investor in United States.
Prefer to invest directly, but SPV is ok too.

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Ok— here is the google form I typed up and Joe reviewed. We’re collecting interest initially to see how serious everyone is and how much money the community might want to invest. My personal desire is that anyone could invest and any amount so honestly share what you’re thinking. This is our (the community’s) way of collectively telling the team that we can bring X to the table for their planned equity fundraise of a few million dollars.

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