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Hi Investors, One of the biggest questions we’ve gotten about the live Republic Note offering is “how does Note pricing actually work?”As you might imagine for something that includes over 600 companies and counting—and that we expect to keep growing and growing in the years to come—the pricing model is complex. While we can’t share the full model digit by digit, given the confidential information it contains, we did want to share many of the key assumptions informing the Republic Note’s price. Some assumptions include: <ul><li>Current value of all positions within the Republic Retail and Republic Capital portfolios </li><li>Growth rate of future Republic investments, which slow over time as the ecosystem scales</li><li>Expected growth rate, including dynamic assumption qualities that decrease over time as the portfolio matures</li><li>Expected positive liquidity events per year (acquisitions, public offerings, other liquidations)</li><li>Expected company failure rate given the early-stage nature of many positions</li></ul>All of these assumptions are dynamic and are designed to be generally conservative, informed by a blend of historical Republic data and market data. For example, we built in a Republic Retail deal growth rate that is 50% lower than our average over the past 2 years—because of the maturity we’re tracking in our portfolio, and the increase in fewer, larger deals following changes permitting Reg CF fundraises up to $5M. Similarly we built in a failure rate 2X higher than our positive liquidity events, reflecting the risky nature of early-stage investing. Overperformance would accelerate returns to the dividend pool. The current model also does not take into consideration ingesting new assets from Republic subsidiaries, such as our wholly-owned European investing platform Seedrs—or any new acquisitions or business units in the future. Though not guaranteed, this could provide a meaningful growth vector for the Republic Note dividend pool in the future. You can view the Republic Note campaign page <a href="http://republic.com/note-2023" rel="nofollow">here</a>.Investments in private companies are particularly risky and may result in total loss of invested capital.

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Apr 25

2023

How Does Republic Note Pricing Actually Work?

Hi Investors,

One of the biggest questions we’ve gotten about the live Republic Note offering is “how does Note pricing actually work?”

As you might imagine for something that includes over 600 companies and counting—and that we expect to keep growing and growing in the years to come—the pricing model is complex.

While we can’t share the full model digit by digit, given the confidential information it contains, we did want to share many of the key assumptions informing the Republic Note’s price. Some assumptions include:

Current value of all positions within the Republic Retail and Republic Capital portfolios
Growth rate of future Republic investments, which slow over time as the ecosystem scales
Expected growth rate, including dynamic assumption qualities that decrease over time as the portfolio matures
Expected positive liquidity events per year (acquisitions, public offerings, other liquidations)
Expected company failure rate given the early-stage nature of many positions

All of these assumptions are dynamic and are designed to be generally conservative, informed by a blend of historical Republic data and market data.

For example, we built in a Republic Retail deal growth rate that is 50% lower than our average over the past 2 years—because of the maturity we’re tracking in our portfolio, and the increase in fewer, larger deals following changes permitting Reg CF fundraises up to $5M. Similarly we built in a failure rate 2X higher than our positive liquidity events, reflecting the risky nature of early-stage investing. Overperformance would accelerate returns to the dividend pool.

The current model also does not take into consideration ingesting new assets from Republic subsidiaries, such as our wholly-owned European investing platform Seedrs—or any new acquisitions or business units in the future. Though not guaranteed, this could provide a meaningful growth vector for the Republic Note dividend pool in the future.

You can view the Republic Note campaign page here.

Investments in private companies are particularly risky and may result in total loss of invested capital.

Republic

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3 years ago

i moved to different country and my bank changed as well, Republic doesn't allow me to update my new bank details. Thus when one the investor i joined was cancelled, my refund was gone, as it was in different country already. until now, i don't know how to redirect my account to my new bank. Pity.

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Hi Team Republic Note.
What about the earlier round, involving $2,400 @ $0.12/token, I was waitlisted for as far back as February, confirmed and Reconfirmed again as requested, which has not been concluded up to now by your Team? And no one from your side or Republic has reached out to me to indicate when that my February Investment is going to be finalized.

I need your team to sort that out and conclude first before I get involved in this.

"... we built in a failure rate 2X higher than our positive liquidity events."

Does this imply that Republic is ultimately expecting 1/3rd of its startups that have some resolution (positive or negative) to have a positive liquidity event, and 2/3rds to have a failure event?

If so, that – however coincidentally – fits with my own experience to date.

This is one very small – and hence quite likely unrepresentative – data point, but in my own portfolio, I've made small, crowdfunded equity investments in 16 startups on Republic, beginning in November 2019.

Of these 16, one has had a successful exit event, if very modestly so – giving investors a 15% net return over a period of approximately 40 months. Date range below is from funding date to resolution announcement:

* Back Porch Homes 11/24/2019-03/27/2023

And 2 have failed outright:

* AlphaFlow Inc. 9/14/2021-1/11/2023
* Passu, Inc. (dba Dims.) 9/28/2021-11/16/2022

I'm hoping that you're closely following such positive and negative resolution events. And that, for instance, none of the three events above might represent a surprise to your team.

In a conversation I had with KingsCrowd's Brian Belley, he mentioned that he wasn't sure if failure events were always being reported by startups to funding portals. *If* that's true, that suggests Republic (and other portals) might need to periodically scan for signs that past-funded companies are still operational and/or incentivize investors to submit any announcements they receive of failure events.

In Republic's own experience, what has been the breakdown between positive and negative resolution events, among startups conducting a successful initial equity crowdfunding campaign on your platform at least 12 months ago? Is that – and/or comparable stats – something you've been tracking?

Good afternoon, the reserved money I put in for the note? What happened to it? The project is fully funded will I receive my tokens or confirmation that I want to continue my purchase?

Is this plausibly impending Private Equity crackup of the big firms (e.g. Carlyle and Blackstone) actually advantageous for us Republic Note investors?

foxbusiness.com/markets/private-equity-crackup-looming-amid-higher-interest-rates-escalating-losses

Private equity crackup looming amid higher interest rates and escalating losses

Significant cracks in the $12 trillion private equity business are emerging with big firms like Blackstone Group, Apollo Global management, and other big players failing to meet fundraising goals, asking investors for money and suffering... Read more »

Fox Business · Charlie Gasparino

Do hafta pay for our reserved notes now or when do we pay?

@napoleon-nicholson Hey Napoleon. Thanks for reaching out with the question. The live offering for the Republic Note is completely separate from the 2020 Reg A+ offering. We are still seeking qualification of the Reg A+ Republic Note offering but we cannot guarantee that we will receive it.

If you would like to participate in the current offering, you will have to create a new, separate investment commitment. Again, we can't guarantee that this Reg A+ offering will be qualified.

If and when the 2020 Reg A+ offering is qualified, investors will have to reconfirm their reservations as investment commitments. Those with reservations would receive an email update letting them know about the qualification and have 7 days to confirm that they would like to invest. At that time, investors would be charged via the payment method on file.

Let me know if you have any other questions!

I have a reserved note in my portfolio. I would like to know if the 500 would be used to purchase this note

Thank you for the explanation

Question: In time once dividends are paid out will we be able to reinvest those dividends

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@nicholas-gessner Hi Nicholas. Right now, the platform does not have the ability to create investor accounts that could hold investor funds and allow them to reinvest directly on the platform. In the future, such functionality may be possible but it is difficult to say and not something that we can promise. If and when that happens, we'll be sure to make notify investors on the platform!