Investment Circles

Investment Circles

Investment circles organize capital allocation within the fxyz Network. They are holacracy circles of type investment, meaning they inherit the full governance framework -- roles, policies, financial tracking -- while specializing in capital management.

There are two kinds of investment circle: the Seed Contribution Circle (a singleton managed by the anchor) and Investment Clubs (user-created collectives).

Seed Contribution Circle

The Seed Contribution Circle is the network's anchor investment sub-circle. It tracks all seed round contributions and manages the relationship between early capital and token allocation.

Characteristics

How It Works

1. An investment round is created with parameters: valuation, price per token, cap, vesting schedule, and optional tier-based pricing.
2. Allocations are submitted against the round. Each allocation records the investor, USD amount, token form (Florin, Joule, HoW, or mixed), and allocation type (founder, investor, contributor, advisor, partner).
3. When an allocation is approved, the system automatically adds the member to the Seed Contribution Circle. This is best-effort -- approval succeeds even if circle membership fails.
4. Tokens vest according to the allocation's schedule (see Voucher Lifecycle below).

Tier-Based Pricing

The seed round supports differentiated pricing by membership tier. Higher-tier members who contributed earlier or more deeply receive a lower price per token. The round stores a tierPricing map (e.g., FOUNDER at $0.003, NAVIGATOR at $0.004, EXPLORER at $0.006). The CES production function from the Token Ecosystem ensures that balanced participation across token types is rewarded over single-token concentration.

Retroactive Allocations

The seed round can ingest historical investment data. Retroactive allocations are parsed, aggregated by investor, and batch-created with their original dates preserved. This allows pre-network contributions to be recognized within the formal vesting system.

Investment Clubs

Investment clubs are user-created collectives that pool capital for specific investment strategies or opportunities within the network. Any NAVIGATOR-tier (tier 3+) member can create one.

Structure

Each investment club is a holacracy circle with:

• Circle type: investment
• Sub-type: collective
• Parent: Anchor Circle (all investment circles are children of the anchor)
• Governance: Full holacracy -- the club lead manages capital allocation decisions through circle governance, including roles, policies, and financial tracking
• Members: Club membership follows standard circle membership rules

How Collectives Work

Because investment clubs are holacracy circles, they inherit the complete governance system:

• Roles: Club leads, treasurers, analysts -- defined through governance meetings
• Policies: Investment criteria, minimum commitments, exit terms -- encoded as circle policies
• Financial tracking: Circle-level expense and transaction tracking applies
• Proposals: Members can propose investments, policy changes, or role modifications through the standard governance process

This means there is no separate "club management" system. The circle governance is the club governance.

Creating a Club

A new investment club is created as a circle with circleType: "investment" and investmentSubType: "collective". The creator becomes the initial Circle Lead. Additional roles (treasurer, secretary, etc.) are filled through governance.

Voucher Lifecycle

Vouchers are the mechanism through which token allocations become redeemable. Each voucher progresses through a defined lifecycle.

States

LOCKED --> VESTING --> REDEEMED

Vesting Mechanics

Vesting follows a cliff-then-linear model:

1. Lock period: An optional initial lock during which zero tokens are available.
2. Cliff period: After the lock expires, a cliff period begins. No tokens vest until the cliff passes. For example, a 6-month cliff means the first tokens become available only after 6 months.
3. Linear vesting: After the cliff, tokens vest linearly over the remaining vesting period. Each day, a proportional fraction of the total allocation becomes redeemable.
4. Full vesting: Once the total vesting period elapses, all allocated tokens are available for redemption.

The vested amount at any point is calculated as:

if days_since_start < cliff_days:
    vested = 0
elif days_since_start >= total_vest_days:
    vested = total_allocation
else:
    post_cliff_days = days_since_start - cliff_days
    vesting_period = total_vest_days - cliff_days
    vested = total_allocation * (post_cliff_days / vesting_period)

Rage Quit

Members can exit their allocation early through a rage quit mechanism. The terms:

• Vested tokens: Paid out in full (100%).
• Unvested tokens: Subject to a penalty (default 70% forfeiture). The member receives 30% of unvested tokens; the remaining 70% returns to the network treasury.
• Status: The allocation is marked as RAGE_QUIT and an event is recorded on the graph.

Rage quit exists to protect both the member (who keeps what they earned) and the network (which recovers committed but unearned capital).

Anchor Circle Relationship

All investment circles -- both the Seed Contribution Circle and user-created clubs -- are children of the Anchor Circle. This means:

• The Anchor Circle sets overarching governance parameters that investment circles inherit
• Investment circle policies must not conflict with anchor-level policies
• The Anchor Circle can define domain-level constraints on investment activities
• Circle Leads of investment circles participate in anchor governance as Circle Representatives

This hierarchical relationship ensures that capital allocation activities remain aligned with the network's overall governance framework. See Holacracy for details on the anchor-subcircle relationship.

Token Integration

Investment circles interact with the Token Ecosystem in several ways:

• Florin: The primary token form for investment allocations. Seed round pricing is denominated in USD per Florin.
• Joule and HoW: Allocations can be denominated in work tokens (Joule) or knowledge tokens (HoW) for non-capital contributions.
• Mixed allocations: A single allocation can span multiple token types.
• fXYZ synthesis: Investment contributions feed into the CES governance score, with capital (Florin) weighted at 1.0x and labor tokens (Joule, HoW) at 1.5x.

References

• Token Ecosystem -- Token types, CES synthesis, tier thresholds
• Holacracy -- Governance framework, circle structure, roles
• Holacracy Extensions -- Circle type categorization, financial tracking
• DAO Integration -- Hybrid governance model