[Proposal] VSP-3 Wind down the project and protect all investors

1

Hey all

I am an angel investor in Vesta and an angel investor in multiple companies in crypto and traditional markets. I’ve also started companies and sold companies in the traditional market.

This situation happens more often than we think. Multiple co-founders having different visions and leaving or splitting. This is unfortunate but not an isolated case.

Now, I am 100% against this proposal on both side. Let me explain myself. The 2 co-founders, Atum and Midnight, are looking to “rage quit” and get paid at the same time. This proposal makes no sense and is most likely illegal.

When you start a company, a lot of people take risks. Angel investors take risk by giving you money in exchange for a potential return on investment. Founders take risk by giving their time for a potential return on investment. Normally in the traditional market, founders and investors get equity or options. These shares are worth nothing until the company sell to a bigger entity or does an IPO. In crypto, everyone is lucky. This process is accelerated with token creation.

The price of Vesta token before this proposal (which makes people buy the token, which is bad since they will lose money) was 0.14$.

The 2 co-founders are asking to leave at 0,40 for no reasonable reason. If they were in the traditional market, they would only be able to keep their equity and hope the third founder brings the company to success so that they can sell their share. We also know that 90% of companies that have founders that leave will fail. Which means the success of the company after they leave is really low and therefore they would have a really low chance of getting anything from the company.

The normal way to wind down a company is well known and fair for everyone based on the risk they took during the project. In traditional market, the founder would take the remaining cash (around 10M$ for Vesta) and send back the money to angel investors with a pro-rata of what they have invested first. The team gets nothing since their equity is valuable only if the company is successful.

Now, this is crypto and like I say above, we are lucky. The creation of a token already gives everyone a chance to get some money.

This is my proposal:

  • Burn every team unvested token and token that are not yet in circulation.
  • Return the amount of money to all angel investors. In total since the treasury is worth more then the initial investment.
  • Take the LPB snapshot and reimburse everyone the amount they invested in the LPB. LPB investors are like small angel investors that believe in the project.
  • Buy every token of the team at 0.14$ (This is the lucky part, normally team gets 0)
  • Buy the remaining token on the market at the fair market value. Create a Rage Quit page for everyone to get part of their money back.

I hope both parties will make the right choice to protect their reputation and wind down the right way.

YES : Follow the step and wind down properly.
NO : Keep discussing what is the best solution for Vesta token holders.

2

I agree with most of the reasoning around the fact that having founders leave likely means the project will fail or end up worth zero. It is a shame and the best solution must be found to wind down the project in the appropriate way. But there is no appropriate way that involves unfair or inequal treatment of all VSTA holders, and this is precisely what your proposal suggests. I don’t know how governance participants could be incentivized to vote for your proposal if it implies a significant loss of value opportunity for them.

In my opinion, there is only one way to address this wind-down and this is to treat equally all circulating VSTA tokenholders. There is no liquidity preference in this situation, and we all request equal treatment.

3

Thanks for your input.
I still think we should protect everyone. My proposal will also reward all token holders just not necessarily at 0.40$. Maybe even more since team will get out at 0.14$.
Let’s see how the governance vote.

1 Like
4

I created a topic for discussion here with the purpose to increase discussion quality.