A Venture Bond is a structured financial product designed to do the following:
- Enable startups/SMEs to issue a bond accessible to retail
- Deploy money collected from bond purchasers to generate interest on principal
- Swap interest for tokens: the interest generated by the bond is given as funding to startups, while the retail purchasers of the bond earn tokens
While the bonds may generate just 8% to 15% in interest, which as mentioned above is nothing special, the early-stage equity or tokens they are swapped for could 100x or even 1,000x.
With the bond, retail only captures 15% of the growth in the swapped equity or tokens. So a 100x translates to 1,000% nor 10,000%. Even then, 1,000% is far, far more exciting than 10%, yet it does not risk principal funds.
Of course, the swapped tokens may go to 0, which is the key reason retail has been aversive to venture investments to begin with. However, with the Venture Bond, the principal was never exposed to early-stage equity or tokens. So even if a swapped token or equity reaches -100%, the net return in fact leads is a 1x return, essentially no change in portfolio.
- 1.Personal finance is growing rapidly
- 2.Retail is becoming actively involved in personal portfolio management
- 3.CeFi and DeFi provide stable return on principal, for startups and early ventures
- 4.The possible upside of early-stage ventures is incredibly exciting
- 5.VRTBs largely remove the risk factor in venture funding
NEPRI FINANCE will launch Venture Risk Tokenized Bonds as its product. A constant focus of the company’s product line will be to increase retail involvement and safety within the space, be it through increased control within projects or refundable offerings.
VRTBs as a product has incredible potential, and they are qualified to target both early-stage equity and early-stage tokens.
VRTBs as a product will provide startups with compliant funding, sourced from retail. The structured state of VRTBs will ensure startups can confidently receive the funding that has been committed to them. Simultaneously, it ensures to retail the delivery of their swapped tokens and equity, without startups themselves acquiring the principal funds.
Fiat on-ramps to the platform must be built powered by the NEPRI Clearer, A community deployed DApp which provides a borderless, peer-to-peer, fiat-to-crypto ‘Clearer Network' that allows Stakeholders to find nearby users to exchange their cash for nYUSD and currency. nYUSD is required to become a seller in the network.
While the Venture Risk Tokenized Bond is a pivotal aspect of the development, future products are a part of the platform. The added expansionary aspect is to plug into not just tokens, but also early-stage equity.
The Venture Risk Tokenized Bond is a product we will launch to create nearly zero-risk venture investments. First, startups issue bonds, then retail purchases these bonds, and then the principal money collected from retail generates interest on insured and overcollateralized margin lending.
The generated interest is given to startups, who in return give equity or tokens. At bond maturity, the principal funds are returned to retail. So, retail ends up with their initial money back, plus tokens or equity in a startup.
Fees will be collected from a portion of funding generated by startups, and from a portion of tokens or equity received by Venture Risk Tokenized Bond holders.
The Venture Risk Tokenized Bond is an asset class native to the NEPRI platform. It will need liquidity, and the platform will also facilitate that.
To clarify, a Venture Risk Tokenized Bond, like any bond, locks funds and returns them after a maturity date (like an expiry date). Only at maturity date, the funds are unlocked from the Venture Risk Tokenized Bond. It’s likely that some (or many) people may want to exit their position before a Venture Risk Tokenized Bond’s expiry date. The Venture Risk Tokenized Bond Exchange facilitates this demand.
There will be trading fees.
The VRTB Exchange will be open to all for trading Bonds of tokens, it will be open to only accredited investors, due to legal requirements.