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Invest in MARKET Protocol

Building the next generation of safe derivatives

  • $116,802Amount raised
  • $1,000Minimum
  • $11,380,900Pre-Money valuation

Purchased securities are not currently tradeable. Expect to hold your investment until the company lists on a national exchange or is acquired.

MARKET Protocol is offering securities under both Regulation D and Regulation CF through SI Securities, LLC ("SI Securities"). SI Securities is an affiliate of SeedInvest Technology, LLC, a registered broker-dealer, and member FINRA/SIPC. SI Securities will receive cash compensation equal to 7.50% of the value of the securities sold and equity compensation equal to 5.00% of the number of securities sold. Investments made under both Regulation D and Regulation CF involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest. Furthermore, the contents of the Highlights, Term Sheet sections have been prepared by SI Securities and shall be deemed broker-dealer communications subject to FINRA Rule 2210 (the “Excluded Sections”). With the exception of the Excluded Sections noted above, this profile contains offering materials prepared solely by MARKET Protocol without the assistance of SI Securities, and not subject to FINRA Rule 2210 (the “Issuer Profile”). The Issuer Profile may contain forward-looking statements and information relating to, among other things, the company, its business plan and strategy, and its industry. Investors should review the risks and disclosures in the offering's draft. The contents of this profile are meant to be a summary of the information found in the company’s Form C. Before making an investment decision, investors should review the company’s Form C for a complete description of its business and offering information, a copy of which may be found both here and below.


Company Highlights

  • Previously raised $2+ million from investors including PreAngel, Zero G Capital, and Wyre Capital
  • Backed by crypto thought leaders Erik Voorhees (Founder & CEO of ShapeShift) and Andrew Keys (Co-Founder of ConsenSys Capital)
  • Accomplished team of derivatives professionals and engineers
  • Recently launched with over 600 accounts, $700,000+ in notional value traded
  • Used in the 2019 ETH Berlin Hackathon winning project - LSDai

Fundraise Highlights

  • Total Amount Raised: US $116,802
  • Total Round Size: US $1,500,000
  • Raise Description:  Seed
  • Minimum Investment:  US $1,000 per investor
  • Security Type:  Tiered Preferred Equity  (SWIFT)
  • Pre-Money Valuation:  US $11,380,900
  • Offering Type:   Side by Side Offering

Tiered Pricing

  • Purchase Price:  US $0.8418 Final

MARKET Protocol is a framework for creating digital tokens to track the price of any asset.


Problem: The crypto industry is large and growing everyday; however, it remains underdeveloped.

Exchanges like Coinbase and Binance have built massive businesses trading cryptocurrencies, but there are still limited opportunities for trading futures and other derivatives - a much larger $10 trillion industry. The options that do exist need to be better. If Coinbase is equivalent to the New York Stock Exchange, who is the next big derivatives exchange?

Solution: Leverage blockchain technology to build the next generation of safe derivatives.

The crypto industry is going to be huge. We built the tools to take us there. MARKET Protocol uses blockchain technology to bring new and traditional derivatives to the crypto industry. It is a platform to create digital assets (derivatives) safer and more securely. Anyone can use MARKET Protocol to design cool and unique instruments, whether for just a few traders or for a whole industry.

Pitch Deck

Product & Service

Product Offering:

We create the ‘legos’ everyone else uses to build the next generation of derivatives to represent any asset, such as, Apple shares, YEN or leveraged Bitcoin. We built a framework where two or more people can enter into an agreement to pay each other based on a series of rules without trusting each other or ever interacting again.

Legacy financial operations around clearing, accounting and settlement are replaced by smart contracts. Collateral is stored safely, reducing counterparty risk. These derivatives can trade on any crypto exchange enabling the global distribution of financial products with no new infrastructure and little implementation effort.

  • MARKET Protocol (May 2019): The ‘legos’ everyone else uses to build products. It’s a secure open-source framework to build derivatives on the Ethereum blockchain.
  • MARKET Protocol Exchange (MPX - June 2019):  MPX highlights our token offerings, promotes brand awareness, and generates valuable feedback directly from traders. MPX will be upgraded to a simpler trading interface.
  • Minting Platform (Polymer - July 2019): This is where the ‘legos’ created with MARKET Protocol are combined to create products with a straightforward interface.

Revenue Model:

Our revenue model is similar to charging a fee on assets under management. We charge a 0.5% fee based on the total amount of assets deposited in MARKET Protocol contracts. Assets are deposited by traders, market makers and investors. Contracts expire and are relisted every 28 days resulting in recurring revenue.

Traction to Date:

  • 650+ registered users, 3000+ unique website visitors
  • $450,000+ in minted tokens over three contract expirations
  • $700,000+ in notional volume traded
  • 450+ trades in long and short leveraged Bitcoin
  • Traded on three exchanges — MPX, DDEX and IDEX

Feedback on our product and customer service:

“Very elegant -- a lot simpler than "top-up margin" systems and with no risk whatsoever of default.”

Anthony Lee Zhang, PhD, Assistant Professor of Finance, University of Chicago

“I had a better experience with margin trading on LBTC on MARKET Protocol than with margin trading [on another exchange]… I like the product/solution you have provided… I could not find any similar products …”

Alexander, Trader who uses MARKET Protocol

“Thank you VERY much for the opportunity to make my voice and concerns heard. I love that you are interacting with your customers on a 1-1 basis. Makes me feel valued”

Tristin, Trader who uses MARKET Protocol

*The above individuals were not compensated in exchange for their testimonials. In addition, their testimonials should not be construed as and/or considered investment advice.

Media Mentions

The Team

Founders and Officers

Since starting his career as a derivatives trader in 2005, Seth has directed multiple algorithmic trading desks, operated as a registered market maker, and launched numerous products. In 2013 he co-founded the algorithmic trading group BRE Trading, where he focused on global short term interest rates, as well as a number of commodity and equity products. He was also responsible for building and maintaining the firm’s exchange relationships. In 2015 Seth began trading cryptocurrencies, and soon afterwards he and his partners successfully developed and implemented a number of arbitrage and relative-value crypto strategies. Seth has a deep understanding of centralized and decentralized trading and exchange infrastructures, and he now leverages this experience to develop and execute the practical strategies incorporated into MARKET Protocol.

Seth Rubin

CEO

Since starting his career as a derivatives trader in 2005, Seth has directed multiple algorithmic trading desks, operated as a registered market maker, and launched numerous products. In 2013 he co-founded the algorithmic trading group BRE Trading, where he focused on global short term interest rates, as well as a number of commodity and equity products. He was also responsible for building and maintaining the firm’s exchange relationships. In 2015 Seth began trading cryptocurrencies, and soon afterwards he and his partners successfully developed and implemented a number of arbitrage and relative-value crypto strategies. Seth has a deep understanding of centralized and decentralized trading and exchange infrastructures, and he now leverages this experience to develop and execute the practical strategies incorporated into MARKET Protocol.

Collins has over 13 years of experience trading derivatives on exchanges around the world. He began trading U.S. government bonds, U.S. Treasury futures, Eurodollars, and international interest rates at Transmarket Group in 2005, eventually expanding into metals, soft commodities, and currencies in 2010. In 2013 he co-founded BRE Trading with a focus on automated and quantitative trading strategies. While trading full time at BRE, he led the firm’s development team, building flexible, low latency, proprietary trading systems to implement the firm’s strategies. As an experienced trader, Collins understands the complex demands of exchanges and traders, and he believes MARKET Protocol is the bright future of the global derivatives industry.

Collins Brown

COO

Collins has over 13 years of experience trading derivatives on exchanges around the world. He began trading U.S. government bonds, U.S. Treasury futures, Eurodollars, and international interest rates at Transmarket Group in 2005, eventually expanding into metals, soft commodities, and currencies in 2010. In 2013 he co-founded BRE Trading with a focus on automated and quantitative trading strategies. While trading full time at BRE, he led the firm’s development team, building flexible, low latency, proprietary trading systems to implement the firm’s strategies. As an experienced trader, Collins understands the complex demands of exchanges and traders, and he believes MARKET Protocol is the bright future of the global derivatives industry.

Key Team Members

Dan Matthews

Software Developer

Travis Mathis

Software Developer

Q&A with the Founder

  • Please detail your product/platform and its key use cases.
    MARKET Protocol Position Tokens are designed to track the price of a reference asset (digital or traditional) without custody of that reference asset. This enables someone in Asia to invest in a US stock index, or a crypto trader to enter a short position to profit from a decline in the price of a cryptocurrency.

    MARKET Protocol gives us a chance to redefine the financial landscape. We have an opportunity to create a truly global market by removing centralized intermediaries and market inefficiencies, delivering financial access and opportunity.

  • Please detail your market opportunity.
    Derivatives are the largest financial market in the world. Estimates of the size of this market are around $500 billion. Blockchain technology provides us with an opportunity to redefine this market by reinventing derivatives, financial tools that have long-existed in traditional form. By improving these tools with blockchain technology, we can create digital tokens to track the value of a number of assets. This will enable valuable new investment and risk management opportunities globally by removing centralized intermediaries and market inefficiencies.

    Crypto trading volume has exploded over the past few years but is still tiny compared to traditional exchanges. The top 3 crypto exchanges see $1.5 billion traded daily compared to $5 trillion of equities and foreign currencies traded daily on traditional exchanges. Initially, we will bring the most active stocks and commodities to crypto exchanges. Over time we will expand our offerings, giving users more products to trade around the world.

  • Who do you view as your closest competitors and what key factors differentiate yourselves? 

    Centralized exchanges such as BitMEX and OKEx offer some derivative products, however these platforms constantly expose users to risks such as auto-deleveraging, socialized losses, and even theft. dYdX is attempting to solve these issues, but they currently offer only two products and their protocol design architecture only supports one category of digital token. With our platform we overcome both of these limitations – we can offer users safe and solvent exposure to the price of digital and traditional assets.

  • Please outline the regulatory landscape of your market, any regulations you must comply with, and how you comply with those regulations, if applicable.
    We are working with our counsel on US and ex-US strategies and plan to launch in two phases. In the US we need to be compliant with the CFTC and the SEC, depending on the reference assets of our products. In the Cayman Islands, we need to be compliant with the SIB law.

    Our initial launch will be out of the Cayman Islands. We will restrict the minting platform and exchange to ex-US and ex-OFAC participants. With counsel, we believe our Position Tokens and our exchange are both viable in the Cayman Islands and fall outside the SIB licensing requirements.

    In parallel, we will continue to pursue our US regulatory strategy. We believe Position Tokens are viable within the US regulatory framework. Tokens with commodity reference assets like gold, oil, or certain crypto assets like bitcoin and ether (ETH) are regulated by the CFTC. We expect to utilize the 28-day delivery exemption in the Commodity Exchange Act to enable trading on exchanges without the need for licensing. Position Tokens with security reference assets like a share of Apple stock would require a broker dealer’s involvement and most likely exchange licensing.

    Focusing on launching ex-US first allows us to begin refining product-market fit as we continue to work through the US framework in parallel. We understand that US regulatory interpretation is uncertain, and as a result we will spend considerable time ensuring we make the best decisions for the business and investors. 

  • Please summarize your business and business model.
    Our business is minting Position Tokens for users to trade on our exchange or elsewhere. We will generate revenue by charging a small origination fee to mint these tokens. We will also collect trading fees from transactions on our exchange; however most of our revenue will come from minting tokens.

    Our goal is to see Position Tokens trading widely on many different exchanges and applications, therefore our protocol is designed so that these tokens can be easily supported without special software or hardware. Furthermore, we are actively developing business partnerships to encourage the adoption of our tokens.

    Position Tokens are a way for exchanges and applications to differentiate themselves by offering users the tokens they want to trade. These businesses and their market makers will use our platform to generate Position Tokens to satisfy end-user demand. We receive a fee for each token that is generated, and tokens expire after 28 days, resulting in recurring revenue as tokens are reissued.

  • The Q&A with the Founder is based on due diligence activities conducted by SI Securities, LLC. The verbal and/or written responses transcribed above may have been modified to address grammatical, typographical, or factual errors, or by special request of the company to protect confidential information.

    Term Sheet

    A Side by Side offering refers to a deal that is raising capital under two offering types. If you plan on investing less than US $20,000.00, you will automatically invest under the Regulation CF offering type. If you invest more than US $20,000.00, you must be an accredited investor and invest under the Regulation D offering type.

    Fundraising Description

  • Round type:
    Seed

  • Round size:
    US $1,500,000

  • Raised to date:
    US $116,802
    US $33,802 (under Reg CF only)

  • Minimum investment:
    US $1,000

  • Target Minimum:
    US $350,000
  • Key Terms

  • Security Type:
    Tiered Preferred Equity  (SWIFT)

  • Purchase Price:
    US $0.6734 no later than Oct 25, 2019 (20.0% discount)
    US $0.7576 no later than Nov 8, 2019 (10.0% discount)
    US $0.8418 Final

  • Pre-money valuation:
    US $11,380,900

  • Option pool:
    10.0%

  • Liquidation preference:
    1.0x
  • Additional Terms

  • Custody of Shares

    Investors who invest $50,000 or less will have their securities held in trust with a Custodian that will serve as a single shareholder of record. These investors will be subject to the Custodian’s Account Agreement, including the electronic delivery of all required information. 


  • Investment Proxy Agreement

    Investors who invest $50,000 or less will be subject to an Investment Proxy Agreement (“IPA”). The IPA will authorize an investment Manager to act as representative for each non-Major Purchaser and take certain actions for their benefit and on their behalf. Please see a copy of the IPA included with Company's offering materials for additional details.


  • Closing conditions:
    While MARKET Protocol has set an overall target minimum of US $350,000 for the round, MARKET Protocol must raise at least US $25,000 of that amount through the Regulation CF portion of their raise before being able to conduct a close on any investments below $20,000. For further information please refer to MARKET Protocol's Form C.

  • Regulation CF cap:
    While MARKET Protocol is offering up to US $1,500,000 worth of securities in its Seed, only up to US $1,070,000 of that amount may be raised through Regulation CF.

  • Transfer restrictions:
    Securities issued through Regulation CF have a one year restriction on transfer from the date of purchase (except to certain qualified parties as specified under Section 4(a)(6) of the Securities Act of 1933), after which they become freely transferable. While securities issued through Regulation D are similarly considered "restricted securities" and investors must hold their securities indefinitely unless they are registered with the SEC and qualified by state authorities, or an exemption from such registration and qualification requirements is available.

  • Use of Proceeds

    Investor Perks

    $1,500 - Swag bag including a T-shirt, and sticker pack

    $5,000 - Above, plus a MARKET Protocol hoodie, KeepKey hardware wallet, (invest $3,000 by November 8th to receive this perk)

    $25,000 - Above and quarterly calls with the founders to discuss project updates and the state of the industry

    $100,000 - Above plus meet and greet with Founders in Los Angeles or Denver, hotel and domestic airfare included

    It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.

    Prior Rounds

    The graph below illustrates the valuation cap or the pre-money valuation of MARKET Protocol's prior rounds by year.


    This chart does not represent guarantees of future valuation growth and/or declines.

    Pre-Seed

  • Round Size
    US $575,000
  • Closed Date
    Jan 1, 2017
  • Security Type
    Common Equity
  • Pre-money Valuation
    US $3,300,000
  • Other

  • Round Size
    US $2,440,000
  • Closed Date
    Nov 1, 2018
  • Security Type
    Preferred Equity
  • Pre-money Valuation
    US $10,000,000
  • Market Landscape

    Addressable Market:

    The crypto space trades about $5 billion daily vs $5 trillion traded on traditional exchanges (stocks, bonds, fx). With MARKET Protocol we can bring these two worlds together by tokenizing new and traditional assets. Our initial users will be the millions of crypto users and traders across 100s of crypto exchanges who primarily trade spot crypto assets and almost no traditional assets.

    As the crypto space matures we see our user base expanding to both the financially underserved (offering price stability and high-quality investment) and the traditional finance space (removing credit, reducing costs, increasing transparency).

    Competitive Landscape:

    Traditional exchanges like the CME and CBOE offer derivatives, however, they are focused on professional traders and institutions. Centralized crypto exchanges like Bitmex and OKex list crypto derivatives but expose traders to credit risk and socialized losses. Both options are limited in product offerings accessibility.

    Further, traders take unnecessary risks accepting around custody, socialized losses and forced liquidations because there's simply no alternative.

    Risks and Disclosures

    The regulatory regime governing blockchain technologies, cryptocurrencies, tokens, and token offerings is uncertain, and new regulations or policies may adversely affect the development of the Company’s products. Regulation of tokens and token offerings, cryptocurrencies, blockchain technologies, and cryptocurrency exchanges currently is being developed and likely to rapidly evolve. Regulations on token offerings vary significantly among international, federal, state and local jurisdictions and are subject to significant uncertainty. Various legislative and executive bodies in the United States and in other countries may in the future, adopt laws, regulations, guidance, or other actions, which may severely impact the development, growth, adoption, and utility of such tokens. Failure by the Company or certain users of the to comply with any laws, rules and regulations, some of which may not exist yet or are subject to interpretation, could result in a variety of adverse consequences, including civil penalties and fines.

    The previous and future issuances of tokens may constitute the issuance of a “security” under U.S. federal securities laws. The Company had generated and issued an initial set of tokens and intends to generate additional tokens in the future. On July 25, 2017, the SEC issued a Report of Investigation under Section 21(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) describing an SEC investigation of The DAO, a virtual organization, and its use of distributed ledger or Blockchain technology to facilitate the offer and sale of DAO Tokens to raise capital. The SEC applied existing U.S. federal securities laws to this new paradigm, determining that DAO Tokens were securities. The SEC stressed that those who offer and sell securities in the U.S. are required to comply with federal securities laws, regardless of whether those securities are purchased with virtual currencies or distributed with blockchain technology. The SEC’s announcement, and the related Report, may be found here: https://www.sec.gov/news/press-release/2017-131. As noted by the SEC, the issuance of tokens represents a new paradigm and the application of the federal securities laws to this new paradigm is very fact specific.

    The Company has not received any opinion from an international, national, federal, state or local regulator that the Tokens, whether already issued or to be issued in the future, are securities.

    If the Tokens are considered securities then their offer and sale must be registered unless an exemption is available, which also could significantly inhibit adoption and the value of the Tokens, as well as increase the compliance costs of the Company. Depending on what regulatory classification(s) may be made, there may be other securities law issues under the Exchange Act, the Investment Advisers Act of 1940, the Investment Advisers Act of 1940, the Commodity Exchange Act, or other state, federal or international statutes or regulations.

    With respect to Tokens that are issued, it is possible that regulatory authorities will prevent the transfer or sale of such Tokens in accordance with applicable law regarding restrictions on the transfer of unregistered securities. The disposition of Tokens under U.S. securities law is evolving rapidly, and there is a significant risk that changes in the treatment of Tokens may significantly impact the value of the Company.

    The results of defending and resolving any and all such possible disputes are impossible to predict but could amount to millions of dollars in defense costs alone. The amounts of damages or other cash awards payable in resolving such disputes are likewise impossible to predict but could conceivably amount to the entirety of the funds raised by the Company, and more. Sanctions other than rescission and awards of actual damages could include injunctions and other equitable relief, plus, particularly in the case of claims brought by the government, civil money penalties, fines and exemplary or punitive damages.

    The development and commercialization of the Company’s products and services are highly competitive. It faces competition with respect to any products and services that it may seek to develop or commercialize in the future. Its competitors include major companies worldwide. The cryptocurrency trading market is an emerging industry where new competitors are entering the market frequently. Many of the Company’s competitors have significantly greater financial, technical and human resources and may have superior expertise in research and development and marketing approved services and thus may be better equipped than the Company to develop and commercialize services. These competitors also compete with the Company in recruiting and retaining qualified personnel and acquiring technologies. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Accordingly, the Company’s competitors may commercialize products more rapidly or effectively than the Company is able to, which would adversely affect its competitive position, the likelihood that its services will achieve initial market acceptance and its ability to generate meaningful additional revenues from its products and services.

    The Company forecasts project aggressive growth post-raise. If its assumptions are wrong, and its projections regarding market penetration are too aggressive, its financial projections may overstate its viability. In addition, the forward-looking statements are only predictions. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

    The Company is pre-revenue and may not be successful in its efforts to grow and monetize its product. It has limited operating capital and for the foreseeable future will be dependent upon its ability to finance operations from the sale of equity or other financing alternatives. There can be no assurance that the Company will be able to successfully raise operating capital. The failure to successfully raise operating capital, and the failure to effectively monetize its products, could result in bankruptcy or other event which would have a material adverse effect on the Company and the value of its membership interests. The Company has limited assets and financial resources, so such adverse event could put investors’ dollars at significant risk.

    The Company may not be successful in obtaining issued patents. The Company filed a provisional patent application for Tradable Blockchain Asset Position Tokens. Filing a provisional patent application only indicates that they are pursuing protection, but the scope of protection, or whether a patent will even be granted, is still undetermined. The Company is not currently protected from their competitors. Moreover, any patents issued to them may be challenged, invalidated, found unenforceable or circumvented in the future. Any intellectual enforcement efforts the Company seeks to undertake, including litigation, could be time-consuming and expensive and could divert management’s attention.

    The Company may be accused of infringing intellectual property rights of third parties. The Company has not evaluated whether its technology does not or will not infringe upon the intellectual property rights of any third party, and may be subject to claims of alleged infringement of the intellectual property rights of third parties. Such claims, even if not meritorious, may result in significant expenditure of financial and managerial resources, payment of damages or settlement amounts, and reduced confidence in the Protocol and the Tokens and the ability of users to hold and transfer Tokens in the future. Additionally, the Company may become subject to injunctions prohibiting them from using software, business processes, trademarks or other intellectual property that they currently use or may need to use in the future, or requiring the Company to obtain licenses from third parties when such licenses may not be available on feasible or acceptable terms.

    A successful intellectual property claim that might prevent the Company from accessing the network or utilizing the Protocol or Tokens could force the Company to terminate development of the Protocol and liquidate the Company.

    The Company’s success is dependent on consumer adoption of cryptocurrency trading, a relatively unproven market. The Company may incur substantial operating costs, particularly in sales and marketing and research and development, in attempting to develop these markets. If the market for the Company’s products develops more slowly than it expects, its growth may slow or stall, and its operating results would be harmed. The market for cryptocurrency trading is still evolving, and the Company depends on continued growth of this market. It is uncertain whether the trend of adoption of cryptocurrency trading that the Company has experienced in the past will continue in the future.

    Governmental regulation and associated legal uncertainties may adversely affect the Company’s business. Many of the services that the Company offers are regulated by federal and state governments, and its ability to provide these services is and will continue to be affected by government regulations. The implementation of unfavorable regulations or unfavorable interpretations of existing regulations by courts or regulatory bodies could require the Company to incur significant compliance costs, cause the development of the affected markets to become impractical and otherwise have a material adverse effect on the business, results of operations and financial condition. In addition, its business strategy involves expansion into regions around the world, many of which have different legislation, regulatory environments, tax laws and levels of political stability. Compliance with foreign legal, regulatory or tax requirements will place demands on the Company’s time and resources, and it may nonetheless experience unforeseen and potentially adverse legal, regulatory or tax consequences.

    The Company may be unable to maintain, promote, and grow its brand through marketing and communications strategies. It may prove difficult for the Company to dramatically increase the number of customers that it serves or to establish itself as a well-known brand in the competitive cryptocurrency trading space. Additionally, the product may be in a market where customers will not have brand loyalty.

    The Company is subject to rapid technological change and dependence on new product development. Their industry is characterized by rapid and significant technological developments, frequent new product introductions and enhancements, continually evolving business expectations and swift changes. To compete effectively in such markets, the Company must continually improve and enhance its products and services and develop new technologies and services that incorporate technological advances, satisfy increasing customer expectations and compete effectively on the basis of performance and price. Their success will also depend substantially upon our ability to anticipate, and to adapt our products and services to our collaborative partner’s preferences. There can be no assurance that technological developments will not render some of our products and services obsolete, or that they will be able to respond with improved or new products, services, and technology that satisfy evolving customers’ expectations. Failure to acquire, develop or introduce new products, services, and enhancements in a timely manner could have an adverse effect on their business and results of operations. Also, to the extent one or more of their competitors introduces products and services that better address a customer’s needs, their business would be adversely affected.

    Officers of the Company, Seth Rubin and Collins Brown, are plaintiffs in an ongoing suit. Rubin and Brown are suing a former employer regarding a commercial dispute originating in 2016 over a fine levied on the employer as a result of a CFTC investigation. Seth and Collins have asked a federal judge for a declaratory judgment stating that their previous employer cannot require employees to pay fines levied on the employer. The past year and a half have been spent going back and forth to determine if the dispute should be arbitrated or handled in court. This is a civil issue and there is no exposure to Market Protocol. Furthermore, there is no pending or ongoing regulatory investigation.

    The Company’s Board of Managers does not keep meeting minutes from its board meetings. Though the Company is not legally required to record and retain meeting minutes, the practice of keeping board minutes is critical to maintaining good corporate governance. Minutes of meetings provide a record of corporate actions, including director and officer appointments and board consents for issuances, and can be helpful in the event of an audit or lawsuit. These recordkeeping practices can also help to reduce the risk of potential liability due to failure to observe corporate formalities, and the failure to do so could negatively impact certain processes, including but not limited to the due diligence process with potential investors or acquirers. There is no guarantee that the Company’s board will begin keeping board meeting minutes.

    The Company does not currently have employment contracts in place with certain key employees. Employment agreements typically provide protections to the Company in the event of the employee’s departure, specifically addressing who is entitled to any intellectual property created or developed by those employees in the course of their employment and covering topics such as non-competition and non-solicitation. As a result, if employees were to leave, the Company might not have any ability to prevent their direct competition, or have any legal right to intellectual property created during their employment. The Company has confirmed that they are working to put in place employment agreements, but there is no guarantee that they will be entered into.

    General Risks and Disclosures

    Start-up investing is risky. Investing in startups is very risky, highly speculative, and should not be made by anyone who cannot afford to lose their entire investment. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. Before investing, you should carefully consider the specific risks and disclosures related to both this offering type and the company which can be found in this company profile and the documents in the data room below.

    Your shares are not easily transferable. You should not plan on being able to readily transfer and/or resell your security. Currently there is no market or liquidity for these shares and the company does not have any plans to list these shares on an exchange or other secondary market. At some point the company may choose to do so, but until then you should plan to hold your investment for a significant period of time before a "liquidation event" occurs. A "liquidation event" is when the company either lists their shares on an exchange, is acquired, or goes bankrupt.

    The Company may not pay dividends for the foreseeable future. Unless otherwise specified in the offering documents and subject to state law, you are not entitled to receive any dividends on your interest in the Company. Accordingly, any potential investor who anticipates the need for current dividends or income from an investment should not purchase any of the securities offered on the Site.

    Valuation and capitalization. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.

    You may only receive limited disclosure. While the company must disclose certain information, since the company is at an early-stage they may only be able to provide limited information about its business plan and operations because it does not have fully developed operations or a long history. The company may also only obligated to file information periodically regarding its business, including financial statements. A publicly listed company, in contrast, is required to file annual and quarterly reports and promptly disclose certain events — through continuing disclosure that you can use to evaluate the status of your investment.

    Investment in personnel. An early-stage investment is also an investment in the entrepreneur or management of the company. Being able to execute on the business plan is often an important factor in whether the business is viable and successful. You should be aware that a portion of your investment may fund the compensation of the company's employees, including its management. You should carefully review any disclosure regarding the company's use of proceeds.

    Possibility of fraud. In light of the relative ease with which early-stage companies can raise funds, it may be the case that certain opportunities turn out to be money-losing fraudulent schemes. As with other investments, there is no guarantee that investments will be immune from fraud.

    Lack of professional guidance. Many successful companies partially attribute their early success to the guidance of professional early-stage investors (e.g., angel investors and venture capital firms). These investors often negotiate for seats on the company's board of directors and play an important role through their resources, contacts and experience in assisting early-stage companies in executing on their business plans. An early-stage company may not have the benefit of such professional investors.

    Representatives of SI Securities, LLC are affiliated with SI Advisors, LLC ("SI Advisors") Representatives of SI Securities, LLC are affiliated with SI Advisors, LLC ("SI Advisors"). SI Advisors is an exempt investment advisor that acts as the General Partner of SI Selections Fund I, L.P. ("SI Selections Fund"). SI Selections Fund is an early stage venture capital fund owned by third-party investors. From time to time, SI Selections Fund may invest in offerings made available on the SeedInvest platform, including this offering. Investments made by SI Selections Fund may be counted towards the total funds raised necessary to reach the minimum funding target as disclosed in the applicable offering materials.

    MARKET Protocol's Form C

    The Form C is a document the company must file with the Securities and Exchange Commission, which includes basic information about the company and its offering and is a condition to making a Reg CF offering available to investors. It is important to note that the SEC does not review the Form C, and therefore is not recommending and/or approving any of the securities being offered.

    Download MARKET Protocol's  Form C

    Frequently Asked Questions

    About Side by Side Offerings
    What is Side by Side?

    A Side by Side offering refers to a deal that is raising capital under two offering types. This Side by Side offering is raising under Regulation CF and Rule 506(c) of Regulation D.


    What is a Form C?

    The Form C is a document the company must file with the Securities and Exchange Commission (“SEC”) which includes basic information about the company and its offering and is a condition to making a Reg CF offering available to investors. It is important to note that the SEC does not review the Form C, and therefore is not recommending and/or approving any of the securities being offered.

    Before making any investment decision, it is highly recommended that prospective investors review the Form C filed with the SEC (included in the company's profile) before making any investment decision.


    What is Rule 506(c) under Regulation D?

    Rule 506(c) under Regulation D is a type of offering with no limits on how much a company may raise. The company may generally solicit their offering, but the company must verify each investor’s status as an accredited investor prior to closing and accepting funds. To learn more about Rule 506(c) under Regulation D and other offering types check out our blog and academy.


    What is Reg CF?

    Title III of the JOBS Act outlines Reg CF, a type of offering allowing private companies to raise up to $1 million from all Americans. Prior capital raising options limited private companies to raising money only from accredited investors, historically the wealthiest ~2% of Americans. Like a Kickstarter campaign, Reg CF allows companies to raise funds online from their early adopters and the crowd. However, instead of providing investors a reward such as a t-shirt or a card, investors receive securities, typically equity, in the startups they back. To learn more about Reg CF and other offering types check out our blog and academy.


    Making an Investment in MARKET Protocol
    How does investing work?

    When you complete your investment on SeedInvest, your money will be transferred to an escrow account where an independent escrow agent will watch over your investment until it is accepted by MARKET Protocol. Once MARKET Protocol accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to MARKET Protocol in exchange for your securities. At that point, you will be a proud owner in MARKET Protocol.


    What will I need to complete my investment?

    To make an investment, you will need the following information readily available:

    1. Personal information such as your current address and phone number
    2. Employment and employer information
    3. Net worth and income information
    4. Social Security Number or passport
    5. ABA bank routing number and checking account number (typically found on a personal check or bank statement)

    If you are investing under Rule 506(c) of Regulation D, your status as an Accredited Investor will also need to be verified and you will be asked to provide documentation supporting your income, net worth, revenue, or net assets or a letter from a qualified advisor such as a Registered Investment Advisor, Registered Broker Dealer, Lawyer, or CPA.


    How much can I invest?

    An investor is limited in the amount that he or she may invest in a Reg CF offering during any 12-month period:

    • If either the annual income or the net worth of the investor is less than $100,000, the investor is limited to the greater of $2,000 or 5% of the lesser of his or her annual income or net worth.
    • If the annual income and net worth of the investor are both greater than $100,000, the investor is limited to 10% of the lesser of his or her annual income or net worth, to a maximum of $100,000.

    Separately, MARKET Protocol has set a minimum investment amount of US $1,000.

    Accredited investors investing $20,000 or over do not have investment limits.


    After My Investment
    What is my ongoing relationship with the Issuer?

    You are a partial owner of the company, you do own securities after all! But more importantly, companies which have raised money via Regulation CF must file information with the SEC and post it on their websites on an annual basis. Receiving regular company updates is important to keep shareholders educated and informed about the progress of the company and their investment. This annual report includes information similar to a company’s initial Reg CF filing and key information that a company will want to share with its investors to foster a dynamic and healthy relationship.

    In certain circumstances a company may terminate its ongoing reporting requirement if:

    1. The company becomes a fully-reporting registrant with the SEC
    2. The company has filed at least one annual report, but has no more than 300 shareholders of record
    3. The company has filed at least three annual reports, and has no more than $10 million in assets
    4. The company or another party purchases or repurchases all the securities sold in reliance on Section 4(a)(6)
    5. The company ceases to do business

    However, regardless of whether a company has terminated its ongoing reporting requirement per SEC rules, SeedInvest works with all companies on its platform to ensure that investors are provided quarterly updates. These quarterly reports will include information such as: (i) quarterly net sales, (ii) quarterly change in cash and cash on hand, (iii) material updates on the business, (iv) fundraising updates (any plans for next round, current round status, etc.), and (v) any notable press and news.


    How can I sell my securities in the future?

    Currently there is no market or liquidity for these securities. Right now MARKET Protocol does not plan to list these securities on a national exchange or another secondary market. At some point MARKET Protocol may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when MARKET Protocol either lists their securities on an exchange, is acquired, or goes bankrupt.


    How do I keep track of this investment?

    You can return to SeedInvest at any time to view your portfolio of investments and obtain a summary statement. If invested under Regulation CF you may also receive periodic updates from the company about their business, in addition to monthly account statements.


    Other General Questions
    What is this page about?

    This is MARKET Protocol's fundraising profile page, where you can find information that may be helpful for you to make an investment decision in their company. The information on this page includes the company overview, team bios, and the risks and disclosures related to this investment opportunity. If the company runs a side by side offering that includes an offering under Regulation CF, you may also find a copy of the MARKET Protocol's Form C. The Form C includes important details about MARKET Protocol's fundraise that you should review before investing.


    How can I (or the company) cancel my investment under Regulation CF?

    For offerings made under Regulation CF, you may cancel your investment at any time up to 48 hours before a closing occurs or an earlier date set by the company. You will be sent a reminder notification approximately five days before the closing or set date giving you an opportunity to cancel your investment if you had not already done so. Once a closing occurs, and if you have not canceled your investment, you will receive an email notifying you that your securities have been issued. If you have already funded your investment, your funds will be promptly refunded to you upon cancellation. To cancel your investment, you may go to your account's portfolio page by clicking your profile icon in the top right corner.


    What if I change my mind about investing?

    If you invest under any other offering type, you may cancel your investment at any time, for any reason until a closing occurs. You will receive an email when the closing occurs and your securities have been issued. If you have already funded your investment and your funds are in escrow, your funds will be promptly refunded to you upon cancellation. To cancel your investment, please go to your account's portfolio page by clicking your profile icon in the top right corner.