Fluid equity

From Value Network
Jump to: navigation, search

Individual contributions to projects within the open value network (OVN) are transferred into fluid equity using the contribution accounting system. Contributions are considered as "investment". They can be of different types: time, financial, material (equipment, tools, consumables, space), social capital, etc..

The fluid equity distribution for a particular project is presented as a piechart. We call this form of equity "fluid" because within the context of one project everyone's equity is continuously diluted as other affiliates contribute to the project.

Legal issues

Crowdfunding for equity

In most countries today, crowdfunding for equity is still illegal. Some people have raised the concern that projects of an OVN may not be able to get microcontributions in cash from people, because that would be considered crowdfunding for equity. But the law applies to companies that are closed organizations, which don't give access to internal processes to investors, but only some limited access to information. The OVN is an open organization, meaning that it provides free access to innovation and production processes. The individual who contributes cash for a project becomes an affiliate, a member of a non-registered association, has access to all the processes that make up the project, and can influence all these processes.

Secondary markets

Some individuals have proposed to make OVN fluid equity transferable. In other words, to allow individuals to sell their accumulated equity in projects even before the project generates revenue. This subject has been discussed at length within the Sensorica community.

Reasons in favor of it:

  • Individuals can get some currency for their past efforts, offloading some risk and use it for their immediate needs.

Reasons against it:

  • Creating a secondary market for OVN fluid equity might drive those who are close to projects to inflate the potential of the project, according to some exit strategy that they might have. Since OVN projects are open, it would be much more difficult in the OVN context to inflate projects than in the current economic context and markets.