Frequently Asked Questions

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Investment Questions

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How can I profit as an investor?

There are two main ways to profit from investing in personal tokens:

1. Sell equity at a higher price - Through secondary sales at a greater price than what you bought it for. This happens when the market values someone’s potential more (maybe because they launched something recently or demonstrated success).

2. Receive dividends - Get a proportional share of a personal token owner’s capital gains when they sell equity in an asset (company or personal token). The dividend amount is proportional to your equity stake in their personal token.

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Why invest in someone’s personal token instead of their company?

Investing in a personal token is different from investing in their company because you can:

1. Invest in them earlier - Even before they may have an idea for a company to start or join.

2. Bet on an individual more broadly - Across all of their investments and creations as opposed to a single idea.

3. Bet on an individual over the course of their lives - Not just for the duration of a single idea, but across their entire career journey.

This creates a unique opportunity to invest in human potential rather than just specific business ventures.

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Valuation Questions

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How is a personal token valued?

Personal token valuation is part art, part science, part convention:

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The “Art”

The narrative you build around yourself — your track record, potential, credibility, and influence within the Network. Just like startups, people can be early bets or proven value, and investors weigh things like vision, talent, and social capital when deciding what you’re worth.

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The “Science”

Looking at your portfolio: your equities in companies and other personal tokens, your investment history. Investors may model your growth based on the performance of your assets and your track record in the Network — like a personal balance sheet in motion.

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The “Convention”

Whatever the Network agrees to treat as valuable. There’s no universal formula, so norms evolve: some tokens might trade based on recent wins, others on reputation or how diversified your holdings are.

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Obligations and Rights

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What are my obligations to my personal token shareholders?

Your obligations are designed to be clear and limited:

What shareholders CAN receive:

• Proportional capital gains when you sell equity in companies and other personal tokens
• Information about upcoming fundraising rounds (7-day advance notice)
• Pro rata rights to participate in future rounds
• Transparency about your major transactions and performance

What shareholders CANNOT do:

• Vote on your life decisions
• Have ownership over “you” as a person
• Control the assets you hold equity in
• Force you to make specific investments or decisions

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What rights do I have as an investor?

When you invest in someone’s personal token, you receive several important rights:

Pro Rata Rights:

• Right (but not obligation) to participate in future fundraising rounds
• Maintain your ownership percentage by investing proportionally
• Protect against dilution from new investors

Information Rights:

• 7-day advance notice of upcoming fundraising rounds
• Access to basic information about the token owner’s performance
• Transparency about major transactions affecting your investment

Anti-Dilution Protection:

• Automatic protection against “down rounds” (lower valuations)
• Weighted-average adjustment similar to traditional VC structures
• Prevents severe dilution from unfavorable fundraising terms

Secondary Market Rights:

• Right of first refusal priority (after token owner)
• Ability to sell your shares on the secondary market
• Liquidity options when you want to exit

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Risk and Strategy Questions

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What are the main risks of investing in personal tokens?

Individual Performance Risk:

• The person may not achieve expected success
• Their career trajectory may change unexpectedly
• Market conditions may affect their opportunities

Liquidity Risk:

• May be difficult to sell shares quickly
• Secondary market may have limited demand
• Token owner approval required for new buyers

Concentration Risk:

• Over-investment in a single person or token
• Lack of diversification across the portfolio
• Dependency on individual rather than systemic success

Market Risk:

• Overall Network conditions may decline
• Regulatory changes could affect the ecosystem
• Technology or platform risks

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How should I approach portfolio construction?

Diversification Strategies:

• Invest in multiple personal tokens (10-20 for meaningful diversification)
• Mix early-stage and proven performers
• Spread across different industries and backgrounds
• Include various career stages and risk profiles

Due Diligence Process:

• Review track record and achievements
• Analyze current portfolio and assets
• Evaluate professional network and influence
• Assess reputation and reporting history
• Consider growth potential and strategy

Investment Sizing:

• Only invest amounts you can afford to lose
• Start with smaller positions to learn the market
• Increase position sizes as you gain experience
• Balance high-risk/high-reward with stable investments

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Technical Questions

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How does dividend distribution work technically?

For Personal Token Sales (Automatic):

• Capital gains calculated instantly by the Network
• Dividends distributed immediately to all shareholders
• Proportional allocation based on exact ownership percentages
• No manual intervention required

For Company Equity Sales (Manual Reporting):

• Token owner reports sales annually by tax deadline
• Network calculates capital gains and dividend amounts
• Token owner deposits dividend funds to personal token wallet
• Network automatically distributes to shareholders proportionally

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What happens if someone doesn’t report their company sales?

Reputation Impact:

• Reputation score decreases, visible to all users
• May affect ability to raise capital in future rounds
• Reduces attractiveness to potential investors
• Could impact secondary market pricing

Compliance Measures:

• Verification processes for large transactions
• Temporary escrow of funds pending verification
• Dispute resolution mechanisms
• Potential restrictions on Network activities

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Getting Started Questions

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How do I create my first personal token?

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Should I raise capital immediately or wait?

Consider these factors when timing your first fundraising round:

Raise Early If:

• You have a clear plan for using the capital
• You want to build relationships with strategic investors
• You have immediate investment opportunities
• You’re comfortable with the dilution at current valuation

Wait If:

• You want to build more track record first
• Current market conditions aren’t favorable
• You don’t have immediate capital needs
• You believe your valuation will improve significantly

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How much should I invest in other personal tokens?

Conservative Approach (Recommended for beginners):

• Start with 5-10% of your available capital
• Make small investments ($1,000-$5,000 each) to learn
• Focus on people you know and understand
• Gradually increase as you gain experience

Aggressive Approach (For experienced investors):

• Up to 20-30% of available capital
• Larger individual investments ($10,000+ each)
• Broader diversification across unknown parties
• Active secondary market participation

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Advanced Questions

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How do pro rata rights work in practice?

When a token owner starts a new fundraising round:

1. Notification - All existing shareholders receive 7-day advance notice
2. Calculation - Your pro rata share = (your ownership %) × (new shares available)
3. Decision - You choose to exercise fully, partially, or not at all
4. Investment - Submit your investment amount during the round
5. Allocation - Receive shares proportional to your investment

Example: You own 2% of a token raising $1M by selling 500,000 shares. Your pro rata allocation is 10,000 shares. You can invest$20,000 (at $2/share) to maintain your 2% ownership.

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What happens in a “down round”?

A down round occurs when a token owner raises capital at a lower valuation than previous rounds. Anti-dilution provisions automatically protect early investors:

Weighted-Average Adjustment:

• Early investors receive additional shares to compensate
• Adjustment calculation considers both price and quantity
• Protection varies based on severity of down round
• Automatic implementation by Network smart contracts

Example: If you invested at $5/share and the new round is at$2/share, you would receive additional shares to partially offset the valuation decrease.