We're onboard with Fairmint's community ownership innovation

Highlighting Fairmint on our blog was an obvious choice. “Why?” you might ask. Because Fairmint’s founders, like us here at Assurely, are forward-thinkers with innovative minds. They saw an opportunity to create a completely new approach for businesses to enable community ownership, and they value the importance of doing it with proper insurance in place. We're ecstatic to be a part of the future wave of technology that will have a favorable impact on the capital raising industry. Plus, Joris is a fantastic guy to have a conversation with, see for yourself:

Fairmint is Joris’s third company, and as co-CEO and co-founder, the incentive behind its creation stemmed from gaps and frustrations he faced in the past. Therefore, like any forward-thinking individual, Joris set out to solve his problem. How? With blockchain technology.

Joris had previously found it frustrating that his company’s ecosystem couldn’t easily access the financial upside of the company’s success. Joris desired a long-term method of ownership for the general public that was not limited to regulation crowdfunding. While building an exchange for startups using SPVs back in 2017, Joris stumbled upon blockchain technology and reconnected with his co-founder, Thibauld Favre.

The two brilliant minds created a means for every founder to pay a simple monthly subscription fee to install a funding portal directly on their website, entirely powered by blockchain technology. Through the portal, insiders like employees and professional investors, as well as the general public, can contribute capital and value-adding services toward the financial success and growth of the company.

Joris explained,

“At Fairmint we turned the business model into a simple subscription model. So you pay every month, you get your portal to enable ownership for your community. If you want to pay every month with an insured portal, with D&O insurance, you just pay a little more and have insurance coverage for the portal. And that's it.”

We partnered with Fairmint in appreciation for their groundbreaking method; companies can keep their portals open for as long as they wish (Fairmint is an example of the technology’s success, they’ve had their own funding portal open since the start and to date have raised over $7 million). This allows individuals to invest in a company when they first discover it, and when they come across it again two years later. By braiding blockchain technology with capital raising and ownership distribution, Joris solved his problem; his entire ecosystem could get ownership in their company safely.

Our partnership with Fairmint allows founders to purchase a subscription plan on the Fairmint website that includes TigerMark D&O insurance, which will adapt to the amount companies successfully receive. This allows for safe capital raising with no cap on the amount of money that can be raised. Subscription-based insurance coverage, sign us up!

“Coverage that grows as customers raise is the core component of Assurely and essential to Fairmint… As soon as you check the jurisdiction of the fundraising, you can just go with the no-brainer plan to purchase D&O insurance with Assurely.” -Joris, co-CEO and co-founder of Fairmint

Here at Assurely, we value innovation, and we love when humans use innovation to support communities; that’s exactly what Joris and his team are accomplishing at Fairmint. 

Rachel Stevenson from Assurely got the chance to sit down with Joris the other week to hear how his vision came to fruition, how risk management was always part of the big picture plan for Fairmint, and how San Francisco and New York influenced Joris’s career. Dive into the discussion below;  

Can you describe what Fairmint does and how you operate in layman's terms?

We’re building the Shopify for securities, where founders can offer community ownership, directly from their website with their own ticker symbol.

How can Fairmint's mission shape the industry?

“Today, there is a shift to what I call the Ownership Economy. We are at this moment where everyone wants to get a chunk of the products or services they use a lot. And so this is a world where we realized that the value that is produced is most of the time produced by communities. We also noticed that those communities are now gathering around tokens, whether through ICOs, social tokens, governance tokens or any other play; token technology, blockchain technology, has become almost ubiquitous, especially in the past year. 

This is what I like to call the awakening of Community Ownership. It's the latest evolution, in my opinion, of capitalism, offering a complete change of perspective and a completely new distribution of the wealth created. Today more than ever, when I discuss this with founders, they all want to turn their business into web3, which is fantastic, because that's the premise of crypto: decentralizing the wealth produced, as it should be. That sounds very socialist, especially from a French person, but that is what's happening and what's at work in the blockchain industry today.

Offering any organization the promise of web3, with the code and the best practices of web2. That's where Fairmint stands today. And I’d like to invite people to imagine what it would have been like at Uber, if the first drivers had been able to get ownership when the valuation of Uber was maybe $10 million.

Start to imagine how Uber could have gathered a community of people around them that would have built wealth together, not just from a new revenue stream, new income, but they would have built much more distributed wealth from the company's growth. Just like the insiders did.

Fairmint offers founders the ability to tap into their community capital, either by raising money or compensating their community. All directly on their own website, with their own ticker symbol. So this is the major shift: we are not an intermediary, we are the enabler using blockchain technology to help any founder issue their own securities from their own website.”

What was the first key idea that triggered the mission and creation of Fairmint? How is it still intertwined in the business today?

To give you some context, it's my third company. The first one, I had hundreds of employees, the second one went up to 100 people in the team mixing contractors and employees. And during all those businesses, I felt super frustrated never having a way to easily incentivize them or let them participate in those companies' financial success. 

So I started by building an exchange for startups using SPVs. That was in 2017-18. And then I discovered blockchain technology, and my co-founder Thibauld was working on that specifically. I quickly realized that this technology will completely change the way equity works. 

I knew it would take time, but once adoption began, it would become unstoppable. It is such a change. It's like cloud computing 12-13 years ago, you know, everyone had their own servers, and now everyone is running off AWS. And for the end-users, they don't see anything. But the infrastructure itself changed everything because now the smallest company has access to the best solution when it comes to server infrastructure. 

Before today, we had all banks and insurance running on mainframes, super old systems, but also super reliable, so people didn't want to upgrade. Those are still live, by the way. The vision that we have now is a new cloud computing mechanism. Blockchain is literally getting ahead of all those old systems. And as before, those types of infrastructure to issue securities, manage them, handle compliance and all… All that was very expensive.

At Fairmint we just turned the business model into a subscription model. Now, we can offer the power to issue branded securities to every founder for a simple subscription of $200 per month. You pay every month, you get your portal. If you want to pay every month to get a D&O, you just pay a little more and have insurance coverage for the portal. And that's it. 

So you can still be running it 2, 3 or 10 years down the line, just like you run any other SaaS in your startup stack. And so the gap is filled, offering all the assets and all the benefits of web3 to web2 businesses. Like Amazon started to offer cloud computing to people, all their massive infrastructure available to startups that want to start a business without spending too much on tech. Well, at Fairmint we are offering all the same benefits with blockchain tech, and we offer it on a subscription basis to the founders.

What role does risk management play into your platform?

I'd compare the two worlds, between web2 and web3; in the web2 equity world, you spend tons of money on capital management tools and capital formation is very time-consuming. When you're ready, you do a small crowdfunding to show everyone that you have some democratic morals. But in the end, the equity is completely reserved for insiders. 

That's where web3 equity is entirely different, even if it's just beginning to emerge. First, it's programmable, with a smart contract. Then it's a true crypto native equity, meaning it can connect to any protocol that exists today with cryptocurrency if you apply the right layer of compliance. That's our specialty, a core component of our tech. And finally, it's open to the entire community; whether you're a super-wealthy person, an insider partner, or a simple user, you get access to the same asset on the same terms. And so that is a major, major change. That's what we do at Fairmint, to make sure that we give this new community ownership superpower to founders.

That’s where it's essential to work with Assurely. So when we onboard a new customer, they're entering a new world. They don't know about securities laws. They don't know about all the risks that are associated with raising money. And as many of them choose general solicitation, they're addressing people that might not be super aware about startup investments. So even though there's this habit of having D&O insurance be required at Series A or Series B, I think it's a good habit to have from inception. The amount spent on insurance would be low, so the coverage will be low as well. But just the fact that you are putting yourself, as a founder, in a position where you consider all the risk factors regarding raising funds this way, you can alleviate this risk by getting D&O insurance through Assurely.

This is something that I wanted to make sure we would offer to all first-time founders that we spoke with. When people start to raise, and they start to see their Slack notifications with new signups, the person signs up, and verifies their identity, and then gives their tax residency info, and then sends a proof of accreditation, and finally drops the money… That's the entire flow that I want to secure. It’s very, very important. Because all those new steps are actually a risk that keeps increasing and that multiple decentralized projects are not even considering as new liabilities on founders or founding teams’ shoulders. And our partnership with Assurely is really about, how do we alleviate this risk? And without having a top-notch insurance partner, we wouldn't be able to.

Our thinking was, how can we build a product where you pay a monthly fee that adjusts depending on the size of your fundraising. Because we keep collecting nonstop, it's not a one-off type of project; it's not that you do a campaign, boom, you raise, it's over, you pay your insurance, and that's it. With Fairmint, fundraising is rolling. Our customers pay to keep their portal up and running, they should be able to pay to keep the insurance running, as they increase the fundraising over the time, we can adjust to their needs, and with their consent, the insurance progresses as well.  So for all those reasons, when I read about Assurely, I knew that it was something that I wanted to offer our customers. 

That's how we started to work with David. To ensure that despite having a pretty novel way of addressing community ownership with Fairmint, we alleviate the risk with the ability to secure coverage.

Coverage that grows as our customers raise is the core component of Assurely and essential to Fairmint. We make sure the insurance fits the company needs; if it's not the one our customers need, they will not subscribe to the add-on. As soon as the fundraising jurisdiction is chosen, you get proposed a no-brainer plan to purchase D&O insurance with Assurely. At Fairmint, we integrate it in our onboarding flow.

Throughout your travels, has there been a city that has left a lasting impression on you that has influenced the ambition that you have today?

Ha. Actually, I want to say New York, but San Francisco has influenced me so much as well. Tons. Still, it's a tough question. I would say that San Francisco gave me my mindset. And New York gave me the feeling that there are no limits. 

So product-wise, tech-savvy aspect, clearly San Francisco. But I feel more connected with New York today.