Tokens will be distributed parri passu among STO investors so the total number issued will be directly proportional to the funding received, up to The PIPE Fund hard cap, currently €200m.
The funds are then invested into the portfolio of spinout companies at c.100 companies at c.€2m per annum (up to).
All positions will be exited within five years and the profits distributed to Token holders, paid pro rata with their percentage holding in The PIPE Fund (i.e. percentage of the total market cap).
When the tokenised equity of portfolio companies has been listed on the PIPE, AP’s will be able to redeem their Tokens for the relative portion of equity being held by The PIPE Fund. This will be implemented as a trading pair on the PIPE, between Company Tokens and the portfolio company Security Token.
The Financial Model projects that the first portfolio company will reach this stage in Q3/4 2021 so the redemption smart contract will need to be developed, audited and ready to execute before then.
VALUE & GROWTH
The PTK market cap will therefore be pegged to the Net Asset Value (NAV) of the Fund.
As the portfolio of spinout companies grows in value, so too should the market cap. Given the capped supply from the STO issuance (20% total each year for five-years), the result will be an increase in price and ROI for the Token holders.
Token Price = Market Cap = NAV {Eq.1} STO Supply [fixed]
The Token Price will be supported at the NAV through the natural free market mechanism. For example, if the Market Cap falls below the NAV and is trading at a discount, the AP’s will buy PTK on the PIPE exchange and other established markets, so that they can redeem them for equity held by The PIPE Fund.
The increased demand of the buy orders and decreased supply caused by the redemption will cause the Token Price to increase, thus bringing it closer to the NAV of the Fund portfolio.
