Note that this article only applies to VCs and Investment syndicates, as projects do not charge an additional fee during a raise.
Spring employs a deductive fee model for deal participation. If you specify a fee in a deal, it is subtracted from the investor's total investment amount rather than added on top.
The calculated fee forms the allocation used to determine how many tokens an investor should receive [Invested amount - Fee = Allocation].
How the contribution fee structure works - Example
To better understand the deductive fee model, consider an example where you charge a 10% fee, with a token price of $1.
An investor makes a contribution of $1000.
The fee, in this case, 10%, is applied to the $1000 investment, equating to $100.
The investor's allocation is then calculated as $900 ($1000 Investment - $100 Fee).
Therefore, the investor would receive 900 tokens ($900 investment / $1 Token Price)
It's important to note that while the investor's total contribution is recorded in the allocation management, the defining factor for the number of tokens an investor receives is the allocation. The formula is Allocation / Token Price = Token Allocation.
Where do the fees get sent?
You can set up the Fundraising Wallet of your choice inside each deal. The fees and the contributions are sent to the same Fundraising Wallet.
Within every deal, we provide you with the exact details of how much you have raised towards the SAFT, and how much you have charged in fees, making it easy to manage the amount defined in the SAFT that you need to send to the project.