FAQ
How we Established

This section contains frequently asked questions in relation to how NEM Ventures came into being.

Useful Links:

We will post updates to the NEM Ventures Next Steps forum post and try to publish this across the social media channels above, Telegram is likely to be the more active of these.

We are incorporating a capital fund based on XEM, this is something that has never been done before. We are taking advice currently, and anticipate that the structure will be up and running in 2-3 months, in line with the milestones listed in the proposal, as soon as a more precise date is known this will be released.

Proposals accepted will not be able to be funded until the legal entities are incorporated

EDIT: The group structure has now been incorporated in Gibraltar and is below, we are also now open for new proposals:

  • NEM Community Trust (NCT) – a for purpose trust that lives in perpetuity for the good of NEM
  • NEM Holdings Ltd (NHL) – a Company Limited by Guarantee, with one member (NCT) that exists to provide governance and a budget conduit
  • NEM Ventures Ltd (NVL) – Company Limited by Shares, owned by NHL. Controls the investment budget and process.

There are 24 projects that were submitted before the conclusion of the NEM Ventures public vote. We have committed to review all of them as soon as possible and in parallel to the set up of the entity. A full list of these is available on the forum post above

All projects will be communicated with directly explaining this process; initial communications will go out in the next week. We will assess projects on their current state, longevity, the management team, and scalability. KYC will be part of this process and we are bringing a service in at present before we can start reviewing, we expect to commence reviews in the next 2-4 weeks.

Proposal may be accepted or rejected, or we may work with the teams to alter the business model to give it the best chance of success. Where proposals are better suited to the Not For Profit entity, the process for this will be explained to those projects.

EDIT: The backlog has now been completely reviewed and a majority of decisions have been made, first investments are being negotiated at present and will be communicated when appropriate

As part of the review process, we will give all projects a chance to review and update proposal documentation that has been submitted, we will also ask each project to complete a brief form to help us get control of the process.

All projects that have been approved for NCF funding, will continue to be managed by the existing NCF Committee through to completion, the process will not change nor will the contact people for each project. Where the committee would like support, NEM Ventures will provide it in the form of reviews, guidance and recommendations but decisions and fund distribution will be made by the committee.

No, Nem Ventures will provide expertise in relevant areas where needed, as well as incentivise the open sourcing of non commercially sensitive software which should be of benefit to the creativity, productivity and accessibility of other projects in the nem ecosystem as a whole.

In some cases, if there is not a large enough level of agreement within management team, public vote may be utilised to decide if a project will be funded, however this is expected to be a rare case. Additionally, infrastructural level projects akin to NEM Ventures that seek over $750k USD in funding will go to public vote.

Outside the main forum post, there was a very supportive blog post made: By a project seeking funding at present

FAQ
The Investment Process

This sections has been created to try and provide a central repository of information about NEM Ventures, questions that have come up which we feel would be useful to be available are added here as they come up.

Send your pitch deck and other materials to info@nemventures.io in due course we will create an online application process. Please note, no new proposals will be considered until the current backlog has been processed, this may take a couple of months. We encourage projects to contact us and submit proposals, the review will have to wait until the backlog above is cleared.

 

A pitch deck is a condensed view of the business plan, typically 10-15 slides that you could talk through in 10-15 mins. It explains what the problem is, what opportunities gained by or threats to being to solving it, how you intend to solve it, who else it trying to solve it and what you need to make it happen before them. It should contain some tech, but is primarily commercially focused – if technology makes up half your pitch deck, its probably got the wrong focus. The tech explanation will come separately, but it is not what investors are really interested in initially, we will assume the tech works if you say it does at this stage and dig into the detail later to confirm that.

A Pitch Deck is backed up by a business plan normally, and is easier to create if you have a plan already. We prefer it as a start point for reviews as it allows us to quickly understand something you are deeply embedded in but we are looking at for the first time. We don’t generally require the pitch deck to be presented, but there is no reason you couldn’t do that with a video recording or on a teleconference if you prefer as a follow up. Most good pitch decks stand alone as a document and are at a level similar to that of a good Crypto White Paper as a guideline.

We are not affiliated with any of these sites, nor do we accept solicitation from them to place links here, we do not warranty any of the information or flaw in it, use your own judgement. We have found them useful sources of information for companies/projects that are new to investment pack creation though:

  • Improve Presentation: A great explanation of what a Pitch Deck is, what to include and what not to include, they have some paid templates and packs at reasonable prices
  • Google Slide Template: A handy Google Slides template with most of the main topics covered for a product based company
  • Mix Panel: A simple template that was used by the company to raise significant funding in a tradition sense

For later stage companies it is somewhat simpler and fairly standard models now exist. The valuation of start-up stage companies particularly is subjective and is far from being a purely quantitative process. It is important to highlight that a commonly used model NPV / DCF (Net Present Value / Discounted Cash Flow) should not be used for pre-revenue generating companies, this is because it relies on actual revenue and a margin of error being applied to forecasting what that grows to. Using it on purely estimated financials will give an artificial valuation, usually significantly too high. This website provides a good, simple and easy to understand view on various models.

  • How the opportunity enhances, compliments or expands NEM ecosystem, XEM usage or profile of the NEM in general; essentially how well it fits with NEM and other investments.
  • Appetite to contribute to and work with the core values of the NEM Ventures and community, including contributions to services for charities or non-profit initiatives
  • Passion and commitment to create a differentiated product/service with longevity
  • Business model that exists, or can be created, to enable a positive net income in 18-24 months or less and how profitability increases as the company scales.
  • Have equity position and expertise required for a reasonable chance of success
  • Businesses have scope to quickly enter market and gain market share with potential to broaden its offering to develop new/multiple revenue streams.
  • Founding team, or we can explain the proposal and value in plain language on one page or in an elevator. If too complex, it is not well enough understood/thought out yet.
  • Subject to above criteria being met there will be no geographical or sectoral bias to limit concentration and provide a more balanced portfolio.
  • Able to provide all the minimum requirements for Due Diligence in a timely fashion, exact requirements will be clearly defined and openly communicated.

There are several ways this can occur and each investment will be tailored specifically to the company being invested in. Where possible we will put in place a use of funds/liquidation strategy as part of the investment to try and avoid instances of large liquidations hitting exchanges all at ones. We have a small (and growing) network of P2P liquidation options as well, these will also be utilised where appropriate to avoid liquidation of large sums of XEM affecting the price if at all possible.

In some cases, if there is not a large enough level of agreement within management team, public vote may be utilised to decide if a project will be funded, however this is expected to be a rare case. Additionally, infrastructural level projects akin to NEM Ventures that seek over $750k USD in funding will go to public vote.