Angel Token FAQs

DRAFT

What is an Angel Token?

Angel Token is a smart contract that is issued to angels by founders. The Angel Token confers the right to the holder to convert to either (A) a stablecoin (USDC) or (B) company equity once the founder has formed a company and fundraised.

Who can issue a token?

Any founder can issue their own Angel Tokens. There is no limit on the number of Angel Tokens that can be issued per founder. However, the founder may want to limit the number of Angel Tokens or else they may not be able to convert the them. In such a case that a founder cannot convert the Angel Tokens into either stablecoin or company equity, they would be in default of the smart contract.

What is the "notional" value of a token?

By default, one Angel Token is issued with a "notional" value of $1,000. A founder may issue Angel Tokens with a different notional value.

Do Angel Tokens need to be purchased with currency?

Founders can accept a variety of currencies in exchange for an Angel Token. They may also accept services such as mentorship or advice in exchange.

Can Angel Tokens be fractionalized?

Yes. Angel Tokens must be minted in whole units but can be transferred in fractional units.

What are conversion events for Angel Tokens?

Scenario Map

  1. Expiration with conversion to a stablecoin. If the founder does not start a company and fundraise for their company before expiration, the Angel Token would automatically convert to stablecoin (e.g., USDC) equal to the notional value plus interest 5% interest: notional + 5% interest = $1,050).
  2. Conversion associated with company fundraise. If a founder fundraises for a company they founded, the coin holder will be given an option to convert the Angel token based on the notional value of the company equity: $1,000 of company equity.
  3. Expiration with re-issuance of Angel Token (double-opt-in exchange old coin for new coin). If prior to expiration both parties agree, a new coin may be issued in lieu of conversion: Coin0 → Coin1

What is the expiration date of an Angel Token?

By default, each Angel Token must convert within 1 year after the issuance. A founder may issue Angel Tokens with a different expiration date.