Incubees will not be the only beneficiaries of the incubator program. Trickle down economics will enable other locals to build offline businesses to serve the needs of incubees.
TotalCrypto advises that participating crypto projects do not seek to profit off the incubator and a responsible exit plan must be in place. The following mechanisms should ensure a successful handover and exit.
It is recommended that incubator success is defined as participating crypto projects breaking even on the case study location in terms of either coins dedicated to the effort or fiat value (whichever is lower). Case studies are inherently expensive to execute and the limited supply of most cryptocurrencies means that future case studies cannot be funded indefinitely without recouping value to help other communities.
In event that participating crypto projects broke even on the case study location, the following actions are recommended:
- Incubator contributor incentives would be stopped.
- Participating crypto projects and all incubator contributors would surrender their entire stake (75%) in the incubator company. This 75% equity holding and remaining cash / crypto balances will be converted into the currency of the crypto projects involved and split equally between every person in the local community who holds an active cryptocurrency wallet.
- An active crypto wallet is defined as a wallet that has at least one transaction on it within the last month.
- Incubator founders have their equity stake recalculated at the time of the breakeven announcement. This also includes a 25% distribution of remaining cash and cryptocurrency balances. However, incubees must each agree to provide a minimum of 10 hours of their time a month to help with other incubator case studies (if called upon).
- All incubator equipment will remain in the incubator company and will not be reclaimed by participating cryptocurrency projects.
- The teams of involved crypto projects should ensure a smooth handover to the incubees and community. This includes:
- Help with the registering of new shareholders.
- Handover of incubator bank accounts, e-wallets and cryptocurrency wallets.
- Handover of local contacts and contracts e.g. accountancy services.
The recommended result is that control of the incubator company would be handed over to the local community. Incubees will still be rewarded with a 25% share in the businesses they created and hold considerable voting rights. However, the combined local community does have the ability to overrule incubator founders in any decision through their collective voting rights. This should act as a check and a balance against abuse of power.
It will then be the responsibility of the local community and old incubees to move forward and use these incubated companies to better the lives of the entire local community. It is advised that participating crypto projects and the incubator contributor community should still be on hand to give help and advise if required.
TotalCrypto’s idea is that incubee companies will be run with local community focus and profits can be used to improve local infrastructure, healthcare and education opportunities. The share distribution upon exit should ensure that this goal can be met. These local businesses should then be run by the people, for the people.
Incubator or Exchange Failure
TotalCrypto believes that the incubator would be deemed a failure if the following conditions have failed to be met:
- Within one year, monthly collective revenue from incubee companies is not enough to cover incubee salaries. For example, if incubee salaries stood at a collective total of $8,000 per month and incubator revenues were below that threshold in month 12, then the incubator would be deemed a failure.
- The incubator will not be established unless there are an adequate number of incubator contributors to support the project.
- The incubator is subject to criminal activity that makes continued operation of the incubator unsafe for incubees, locals working in the local office and gatekeepers.
- Gatekeepers reserve the right to exit the project at anytime due to safety concerns. This would result in the closing down of the incubator and sale of equipment.
It is recommended that the incubator be closed down if any incubee, gatekeeper or local employee engages in serious illegal activity. TotalCrypto advises that all cases of criminal activity should be submitted to the local authorities. It is recommended that participating crypto projects reserves the right to cancel the incubator project at anytime.
In event of incubator or exchange failure, the following actions are advised:
- Private extraction arrangements are to be made for gatekeepers or any locals who are in immediate physical danger. Local authorities should also be contacted and security footage submitted.
- The retrieval of local office equipment should only be made if the gatekeepers consider this action safe. If the area is deemed unsafe then the recommended priority is solely the extraction of personnel threatened by immediate harm.
- Where possible, locals who hold crypto will have their cryptocurrency converted into local currency. In event a physical exchange is not possible, then an online alternative should be offered to give locals the opportunity to convert their coins to local fiat.