Fund 1 will maintain its assets locked in its Fund Contract, which are invested (or exited) per input from the Stacker Ventures DAO, the community, and fund investors. The following is an overview of key functions built into the Fund Contract.
All funds deposited as Soft Commits will be fully refunded upon request as long as the request is made before the fund’s Close Date.
Fund 1 maintain its contributed capital in Interest Bearing ETH (ibETH) during the contribution phase and will maintain its univested capital in stackETH throughout the course of its lifetime. The fund will measure return according to both ETH and USD benchmarks.
If 30% of SVC001 tokens stake to pause Fund 1, all buying and selling of tokens will be disabled until the number of staked SVC001 tokens drops below the threshold. This gives investors ultimate collective control and is intended to permit for communication between the Stacker Ventures DAO and investors without dissolving the fund if significant questions or concerns arise.
If 50% of fund ownership tokens move to activate an early fund dissolution, no more investments or exits can be approved by the Stacker Ventures DAO and all ERC20 tokens and stackETH in the Fund Contract will become claimable by investors. The fund will be irreversibly closed.
Fund 1's capital will be secured in its Fund Contract and subject to fund parameters and capital controls. Fund 1 will restrict the initiation of investments to 20% of the total fund’s capital per month. In this case, the total “management risk” to investors is significantly reduced.
Investments, subject to the above capital controls, will be conducted through a built-in escrow function in the Fund Contract.
When an Investment Lead (member of the Stacker Ventures DAO that leads the due diligence on an applicant project) believes that a project qualifies for investment, he or she can move to initiate an investment. The DAO Council will initiate a vote, and if approved, an escrow contract will be set up to accept the potential portfolio project’s tokens in return for an ETH investment. If the portfolio project deposits their tokens, the deal will be completed automatically, with the invested assets going directly into the Fund 1 Contract.
Many investments will likely not be exited due to Fund 1’s one-year lifespan, so investors in Fund 1 can expect to claim their share of fund returns as a basket of tokens at the dissolution of the fund. However, an escrow sell function to partially or fully exit an investment has been built into the Fund Contract, and can be called at any time during Fund 1’s lifespan by the Stacker Ventures DAO.
Fund 1 will dissolve automatically 1 year after the close of the contribution period.
At this point, all ERC20 tokens and any remaining stackETH balance will become claimable by SVC001 token holders, proportional to the number of SVC001 tokens each investor holds. If significant gas costs affect claims, it is to be noted that investors can still sell their SVC001 tokens on Uniswap (and arbitrageurs can fulfill the claim function in bulk).