Investment Model

This is how the community economics work. It's the engine that makes everything sustainable.

What is a "community" here? Any group of verified people who choose to pool resources together. It could be geographic (people in your city), professional (engineers, doctors, graduates), interest-based (sustainability, education), or global (investors connected across countries who share values). The platform doesn't define what a community is — people do.

The Core Loop

Members back businesses → Businesses generate revenue
                                    │
                     Returns flow back to members
                                    │
                     Members back more businesses
                                    │
                     Community thrives → more members join

Two Paths

Communities can coordinate investment in two ways. Both coexist on the platform.

Path 1 — Pooled investment (community-governed)

Members contribute to a shared pool governed by the community (not the platform). The community decides collectively which businesses to back. Members vote proportional to their stake. The pool is managed by elected community leaders, accountable to the members.

Path 2 — Direct deals (individual contracts)

A business posts a pitch. Interested members reach out directly. Contracts are signed between named individuals. No pool, no collective decision — just people choosing to back a business they believe in.

The platform facilitates both — providing contract templates, transparent record-keeping, and dispute resolution. It does not manage funds, make investment decisions, or hold capital.

Where the Money Goes (Pooled Path)

When a community chooses to pool resources:

| Allocation | Purpose | |-----------|---------| | 95% | Community businesses (vetted and backed by the community) | | 5% | Operations (legal, admin, platform fees) |

No idle cash reserve. All capital goes to work.

Liquidity: If a member wants out, they sell their position to another member on a secondary market within the platform. The pool stays fully invested. The seller finds a buyer at whatever price the market supports — no withdrawals from a reserve.

These percentages are a suggested framework. Communities can adjust within bands based on their needs.

Note: This is the allocation of member investment contributions — money people put into community-backed businesses. This is separate from platform revenue (transaction fees, certification fees, talent pool access fees), which follows a different split: 20% operations, 10% reserve, 70% shared between builders and investors. See Funding Model and Builder Compensation for details. Investor share of platform revenue is capped at 40%, non-negotiable.

Community Businesses (95%)

The majority of capital goes directly into backing businesses proposed by community members. Grocery stores, clinics, workshops, SaaS startups, tech companies — anything the community decides to back. Businesses accountable to the people who funded them.

Why this works:

• Every business is vetted by real people evaluating real plans before funding.
• The platform provides built-in demand signals. You can see whether buyers exist before the business launches.
• The community IS the customer base. A business funded by 500 people has 500 people with reason to buy from it.
• Returns stay within the community rather than flowing to distant corporations.

Risk is managed through diversification across many businesses. Community vetting and built-in demand validation help, but startup risk is real — not every business will succeed. Diversification means no single failure is catastrophic.

How businesses get funded

Through a pool — Community members coordinate, vet proposals together, select businesses from a shared pool. More structured, shared due diligence. Works well for larger investments where the community governs the capital collectively.

Through direct deals — A business posts a pitch with a target amount. Interested people commit individually via contracts with the business. More organic, lower barrier. Works well for smaller businesses or when individuals want to choose their own deals.

Both coexist. Early stage will likely be mostly direct deals. As communities grow and build trust, pooled investment becomes possible.

How it works

1. A member (or group) has a business idea.
2. They present their plan on the platform — what they're building, capital needed, projected revenue. This is a pitch, not a solicitation. The platform never says "invest here."
3. Community members who are interested reach out. They ask questions, evaluate, poke holes.
4. Interested parties enter a binding contract with the pitcher — directly, between named individuals. The platform provides the contract template and facilitates signing, but is not a party to the deal.
5. Capital flows directly between parties per the contract.
6. The contract specifies one of three deal structures (see below).

The platform is a contract facilitation layer, not a fund manager. It provides templates, digital signatures, transparent record-keeping, and dispute resolution infrastructure. It does not hold funds, make investment decisions, or recommend deals.

Deal structures

The business chooses what to offer. Investors choose what they want.

Tier 1 — Revenue share (default)

Business pays X% of revenue for Y years, capped at Z total return. No ownership changes hands. Simple, low legal complexity. Works for most small businesses — a shop, a service, a restaurant. Available everywhere from day one.

After the agreement period ends, the business is fully independent.

Tier 2 — Equity (opt-in)

Business offers actual ownership to the community. The people who funded it own a piece of it. If the business grows, they grow with it.

This requires: proper valuation (community-nominated evaluators assess), legal structuring per jurisdiction, minimum investment threshold to keep the cap table manageable, and a buyback/exit mechanism (the business or the platform facilitates resale to other community members).

More complex. More upside. Available where local law allows.

Tier 3 — Convertible (hybrid)

Start with revenue share. If the business hits agreed milestones (revenue target, years in operation, community satisfaction), the revenue share converts to equity at a pre-agreed valuation. The community gets to see the business prove itself before taking ownership. The founder gets simpler terms early on and gives up equity only when the business is stable enough to support shareholders.

Legal structure

This is not a securities offering. Here's why:

• Pitches are only visible to verified community members, not the public.
• No guaranteed returns are promised in any pitch. No "invest X and earn Y%" language.
• Contracts are between specific named individuals — not between an entity and the public.
• The platform facilitates but doesn't manage funds or recommend deals.
• Interested parties initiate the contract, not the pitcher.

This is how angel networks and syndicates already work legally — a founder presents, interested parties self-select, contracts happen privately.

Recommended structure by group size:

| Pool size | Recommended structure | |-----------|---------------------| | 2-10 people | Simple revenue share contract or partnership agreement | | 10-50 people | LLP or structured multi-party contract | | 50-200 people | Private placement rules apply — needs specific legal formatting per jurisdiction | | 200+ people | Restructure into smaller groups, or seek legal counsel for compliance |

The platform recommends appropriate contract templates based on pool size, capital amount, and jurisdiction. All contracts are transparent, auditable, and legally enforceable.

Why equity is harder than revenue share

Equity sounds simple — you fund it, you own a piece. But:

• How do you value a coffee shop? There's no VC-style valuation framework for small businesses.
• 200 people own 30% of a bakery. One person wants out. Who buys their 0.15%?
• Small amounts create impractical ownership. ₹500 invested = 0.001% ownership.
• Equity requires audited financials, annual reports, shareholder rights. Most small businesses don't have that infrastructure.

Revenue share avoids all of this. The convertible model bridges the gap — start simple, convert to equity only when the business is stable enough to support shareholders.

Examples

A local carpenter needs ₹2 lakh for better equipment. Revenue share — 5% for 3 years. Simple. Done.

A group wants to start a community grocery store. Equity — 200 people each put in ₹10,000, collectively own 40%. They vote on store decisions proportional to their stake.

A tech startup comes out of the community. Starts with revenue share, proves product-market fit, then converts to equity for early backers at a pre-agreed price. Early risk = early reward.

If the business fails

The loss is absorbed by the pool (pooled model) or by the individual investors who signed the contract (direct deal model). Diversified across many businesses, so no single failure is catastrophic. No debt to the founder. They tried, it didn't work, the investors took that risk knowingly.

If the business succeeds and refuses to honor the agreement

Social accountability first (public discussion, reputation impact). If that fails — the agreement is a signed contract, enforceable through community arbitration or, as a last resort, the legal system.

Important distinction

The platform itself has no equity. Nobody owns it. It's a utility — open-source, community-governed.

Businesses funded by the community are different. If people pooled their money to build something, they have every right to own a piece of it. That's not the same as owning the platform — it's owning the things the platform helped create.

Voting on Investment Decisions

For pooled investments, decisions — which businesses to back, allocation changes, pool governance — use stake-weighted voting. Your vote is proportional to your contribution. For direct deals, each person makes their own decision.

This is different from governance. Leadership elections, platform decisions, political coordination — those are one person, one vote regardless of wealth.

Why the split: if you have ₹5 lakh at stake and someone has ₹500, it's not fair for them to have equal say over how your money is deployed. But it's also not fair for wealth to buy political or social power. So financial decisions are stake-weighted. Everything else is democratic.

| Decision type | Voting rule | |---------------|------------| | Which businesses to back (pooled) | Proportional to stake | | Pool allocation changes | Proportional to stake | | Leadership elections | One person, one vote | | Platform governance | One person, one vote | | Political endorsements | One person, one vote | | No-confidence motions | One person, one vote |

Member Contributions

• No fixed amount. Invest what you can, when you can.
• No minimum that prices people out. Whether it's 500 rupees or 50,000 — you're a member with equal voice.
• Exit: Sell your position to another member on the secondary market. No withdrawals from the pool — your money is invested, not sitting in a vault. You find a buyer, you're out.
• Returns: Distributed periodically (quarterly or annually — community decides). Proportional to your contribution.

Risk Disclosure

This is investment. Real investment carries real risk.

• Community businesses can fail. Not all of them will succeed.
• Returns depend on the businesses the community chooses to back.
• Regulatory changes in any country could limit or alter operations.

We mitigate through: backing many businesses (not putting everything in one), rigorous community vetting before funding, built-in demand validation through the platform, and democratic oversight of all investment decisions. But risk is never zero. Every member should understand this.

Legal Structure (India — Proposed, Unvalidated)

We are exploring:

• Cooperative Society (Multi-State Cooperative Societies Act, 2002) for governance
• Nidhi Company (Companies Act 2013, Section 406) for the financial engine — accepts deposits from members, lends to members, no RBI license required
• Both entities interlinked — members of one are members of the other

This is a proposal, not a commitment. Legal validation is needed before any of this is final. If you're a lawyer who knows Indian cooperative or securities law — this is one of the highest-value contributions you can make right now.

Legal Structure (Other Countries)

Open questions. We need people in each jurisdiction to research:

• What entity can legally pool member capital and invest it?
• What securities regulations apply?
• What cooperative/mutual frameworks exist?
• What tax implications do members face?

If you're a lawyer anywhere in the world — pick your country, research this, and contribute to the docs. This is one of the highest-value contributions possible right now.