The Startup
Published in

The Startup

First Look at Launch Pools

Accelerate investor engagement

Back and forth with investors down at the old boys club

An entrepreneur considers a lot of up front costs and decisions before pitching an investment and accepting money. If he is putting together a fund, he wants to know if it will attract enough assets to justify the cost of setting up a compliant fund structure, which is often more than $100K. If she is raising money for a crypto startup, she wants know where the investors are, what they are allowed to buy, and whether they will accept coins or equity. A startup may need investor backing before it can attract a key hire, but need a key hire to attract investor backing.

SPAC Attack

A SPAC tells its investors “You are buying an IPO, but I am not telling you which one.” And the pitch works.

The Launch Pool process

Launch pool sponsors will guide their investors through several stages:

  • Stake: An investor gets a place in line by assigning or “staking” some assets to a smart contract. The investor keeps rights to the asset and earns its return. The investor can reclaim the assets at any time.
  • Collaborate: Discuss the outstanding questions about the investment offer. Make advisory votes weighted by stake value.
  • Propose: The sponsor makes a specific investment offer.
  • Commit: Investors can commit their stakes to the stabilized offer.
  • Convert: Swap the committed stakes for the proposed investment.
  • Reward: Investors may get rewards, with early stakers getting bigger rewards.
  • The assets remain under control of the investor, in an escrow contract. They don’t become an investment until after commitment. This postpones organizing and compliance costs.
  • Investors earn their own interest and returns. If they want to hold ETH, they can stake ETH. If they want to earn returns from a liquidity pool or a loan pool, they can buy those pools and stake the interest-earning token.

Use Cases

Gather money for a new investment fund before committing to legal costs.

A sample Launch Pool offer

You can help us try out this concept by signing up for a minimum viable launch pool. Please share your advice and questions on Discord.

Questions to answer before finalizing an offer

What’s the business model that will support the ongoing development of launch pools? We will make three proposals. Each of these proposals will lead to a different structure.

Expected minimum and maximum total committed amount

Minimum of $100K, and maximum of $200K.

Expiration date

March 20, 2021
If an investment is not committed before the expiration date, the pool will automatically refund all stakes.

Something extra

We propose that investors will get warrants for additional shares or tokens with a better strike price for earlier stakers. The first staker will get a strike price of 1X the initial price, rising to a strike price of 2X for the last staker. [Strike = initial price * (1 + staking percentile)]

Detailed notes about the Launch Pool process


Investors can “stake” assets by transferring them to a smart contract that will hold the assets in escrow. They can reclaim the assets at any time.


Sponsors should actively respond to questions and suggestions about the proposed investment. Sponsors can test the waters with their own questions and advisory votes. We will run votes on Snapshot.


Sponsors will need to propose a specific investment with terms, structure, legal agreements, and smart contracts.


Investors get three choices:

  • Do not commit (default)
  • Commit. Indicate that you will trade your stake for the investment offer.
  • Commit if enough other people commit. This is a set-and-forget feature.
  • During the collaboration phase, the sponsors will be trying to satisfy all of the interested investors. If they have interested investors in several categories, they may have an opportunity to create multiple structures or offers.
  • Qualification can come at the end of the process when everyone is sure that the effort is worthwhile.


If enough investors commit to the proposed investment, then we:

  • Claim the stakes that are committed
  • Liquidate them to get funds to invest
  • Buy the investment
  • Deliver shares of the investment

Reward with something extra

Investors will get the return from their stakes, converted into the initial value of the investment. It’s a good idea to give them something extra. For example, SPACs will usually offer warrants for investors that buy the IPO. Even if those investors redeem later, they still get the warrants as a reward for their early commitment.


Launch pools accelerate investor engagement by mixing DeFi magic with features from escrow, SPACs, Kickstarter, and DAOs.



Get smarter at building your thing. Follow to join The Startup’s +8 million monthly readers & +768K followers.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Andy Singleton

Software entrepreneur/engineer. Building DeFi banking at Maxos — . Previously started Assembla, PowerSteering Software, SNL Financial.