Foundance is the only tool that lets you work on an agreement and use tokenized cap table in this trustless manner. You and your team are the masters of your startup and the way it works, and we provide you with even more flexibility, so the work can go smoothly. 

Business partnerships are incredibly powerful. Why? Because when people share a dream, vision, or purpose, it’s one of the most influential things they can do. As humans, we’re wired to be social and collaborative, and studies in psychology, sociology, and anthropology all confirm this. When business partners join forces, they’re creating something that’s bigger than just their individual contributions. They’re pooling resources and sharing risks to create something new and exciting. Different sources state that partnerships have a higher chance of creating sustainable, innovative, and creative companies that grow faster and are more stable and resourceful [1]

Martin A. Nowak and Karl Sigmund have studied the phenomenon of cooperation and indirect reciprocity (which confers no immediate benefit to the one doing the helping) in humans for many years and came up with a thoughtful conclusion that

humans are the champions of reciprocity. Experiments and everyday experience alike show that what Adam Smith called ‘our instinct to trade, barter and truck’ relies to a considerable extent on the widespread tendency to return helpful and harmful acts in kind. We do so even if these acts have been directed not to us but to others. [2]

Which such a concept we can imagine how impactful a flywheel of great partnership can be – where one person always motivates the other with their hard work and dedication and vice versa.

Finding the right co-founders for your business is crucial for success, but it’s not an easy task. In fact, entering a business relationship as co-founders can be quite challenging (don’t worry, we’ll dive into that in another article!). It requires a team with great Hard Skills, Strong Leadership, and a Commitment to the Vision and Purpose of the company. Communication is key, as is the ability to be quick learners and open-minded, always striving for the best possible outcome. It may seem like a lot, but with the right mix of skills and traits, co-founders can work together to overcome any obstacle and lead their company toward success!

The whole process is also very often compared to getting married, and I also like the comparison of team building to dating. You spend so much time with your co-founders day in and day out. You spend a lot of time with your co-founder, just like you would with a significant other. And like any relationship, it requires learning how to communicate effectively, sharing finances, accepting each other’s flaws, giving constructive criticism, managing employees, prioritizing each other’s needs, and most importantly, building unconditional trust. You can also see the product you design as your baby and the investor as your parent or guardian. You can imagine how complex the situation can become!

Having a founding team with diverse interests and skills is crucial for success in your business. Ideally, you and your co-founders should be working on different aspects of your business, so it’s important to find individuals whose skills complement yours. For example, if you enjoy coding software but dislike sales, finding a co-founder who shares your love for coding and also dislikes sales may seem ideal at first. However, it would be more beneficial to find a co-founder who excels in sales and dislikes coding because this would provide a better balance of skills within the team.

It’s important not to rush into finding a co-founder and to take the time to find the right fit for your team. At Foundance, we understand the importance of finding the right co-founder, and we’re here to support you throughout the process. With our trustless partnership model, you can take the time you need to find the perfect co-founder without worrying about the risks involved. We’ll cover more about this in a moment, so stay tuned.

In the fast-paced and ever-changing world of venture capital, a new trend has emerged: the rise of Y-Combinator-like accelerators that promise participants the best of both worlds. These accelerators offer a unique opportunity for entrepreneurs to receive both income and equity in a start-up simultaneously. Typically, these accelerators work in cohorts, bringing together 50-100 people for a period of several weeks. During this time, participants engage in a rigorous program designed to help them refine their ideas, develop their business plans, and prepare for launch.

One of the most exciting aspects of these accelerators is the opportunity to select a co-founder from within the cohort. By spending several weeks together, participants can get a sense of who they work well with and who they could see themselves building a company with. But, as with any whirlwind romance, it’s important to take a step back and consider the long-term implications of partnering with someone after just a few weeks. While these accelerators provide an incredible platform for networking and collaboration, they shouldn’t be mistaken for a matchmaking service (or worse, as a bad match making service!).

Ultimately, the success of any start-up hinges on the strength of the team behind it. So while accelerators can provide a valuable launch pad for new businesses, it’s important to remember that the most important factor in a start-up’s success is the quality of the people involved. Here comes our concept of trustless team building we have provided at Foundance.

The Trustless team-building concept is a strategy where team members can collaborate and work towards a common goal without the need for trust in centralized authority and with minimized trust in each other. We achieved this approach through the use of dynamic equity allocation with the use of tokens, which ensures fairness and equitability among co-founders and helps them reach a consensus when it’s needed. 

The broad understanding of underlying tech and how you can use it will be covered in another post, but to let you know what new possibilities can be open to you thanks to Foundance let me use one example. You have found your co-founder and started working on your idea. In normal circumstances, you will be tied together by some type of contract, which typically involves sharing equity in your startup with help of cliffs and vesting – which is not always good for reaching a consensus and can make some trouble if you split and go opposite directions. 

Equity arrangements must be structured in a way that is both fair and dynamic. That means building in mechanisms for equity redistribution that take into account changes in the company’s structure, team, and performance. [3]

The Foundance answer is Dynamic Equity allocation via a token. A simple, equitable, legal, on-chain agreement as to how equity is distributed each week, and how decisions get made.

Every week that you and your co-founders have worked on a project, all of you will receive project tokens sent to your wallet based on the contributions that each of you has made. The model is built so that you can tune it to remunerate cash and time inputs equally, or to favor one over the other. In this way, you can guarantee a fair distribution of the equity without the need for cliffs or vesting periods, a distribution that is built around the value that is contributed to the project at the time that it is contributed rather than anything more arbitrary.

Because of this weekly cycle, it is possible at any point for the cofounders to decide that parts of the relationship are not working; if there are parts that are not then the rules of the agreement can be followed, new cofounders introduced, and others leaving. Anyone leaving the project keeps the tokens that represent the value that they contributed for the time period that they were engaged.

When building a co-founder team, it’s important to think about the long-term and how the contributions of each team member will change over time. The Slicing Pie model provides a framework for fairly dividing equity based on these changes. [4]

Usually, equity in start-ups is distributed after six months of collaboration at the earliest. In a trustless environment, you can get your token immediately and be fairly compensated for your work in real-time!

In a tokenized world there is also no issue with founders keeping their token after leaving a project, and even maintaining the governance rights that these tokens may represent. In an incorporated startup world, this would be seen as a big problem.

Foundance is the only tool that lets you work on an agreement and use tokenized cap table in this trustless manner. You and your team are the masters of your startup and the way it works, and we provide you with even more flexibility, so the work can go smoothly.