In this section, we itemize the utilization of the funds raised through our token sale at a high level. We must emphasize that uncertainty is inherent to business operations: macroeconomics, regulatory changes, technological development, and shifting tastes of potential users, etc. all point to agility as a key success factor. As a result, the following itemization should be considered only as a guideline. Our priority will always be the long-term success of the symbiotic relationship between IdeaFeX and our user community.

To begin with, roughly 20% of the proceeds from the token sale must be put aside for taxes as well as legal and accounting fees. Because utility tokens represent services that the issuer is committed to provide, proceeds from the token sale are currently considered taxable revenues in all jurisdictions that recognize utility tokens. This item is therefore a relative constant regardless of the outcome of our token sale.

The remainder of the proceeds will be divided into three categories: research and development (R&D), operations and compliance (OPS), and marketing and business development (MBD). R&D is responsible for developing, maintaining, and continually improving our software as well as hardware. OPS is charged with regulatory compliance, financial analytics, and client support. MBD is responsible for developing partnerships, growing our user community, and building meaningful long-term relationships.

If we manage to close our token sale with the entire allotment sold, we will receive €58 million. There will be sufficient funds for us to develop our software fully and integrate up-to-date support of a broad selection of blockchain protocols. Beyond R&D, we will also be able to manage compliance in more jurisdictions and thereby serve a broader audience, and we will establish close relationships with industries outside the blockchain community in order to drive mass adoption of the DLT-based new asset classes that we propose. Roughly 20%, 35%, and 25% of the funds will go to R&D, OPS, and MBD respectively.

Projection of personnel size and income statement highlights in the best-case scenario

According to our projection of personnel size and income statement in the best-case scenario (Figure 11), a little shy of €30 million in expenses will be incurred in the first two years before IdeaFeX can be soundly profitable. This roughly corresponds with the goal of our initial token sale.

If our initial token sale is less successful, we will put less emphasis on partnerships beyond the blockchain community and take a slower pace in managing compliance in regulatory compliance outside the European market. We will prioritize R&D where necessary. For example, if we only manage to sell 10% of the allotment, the proceeds will amount to €4 million. We will allocate roughly 30%, 35%, and 15% of the funds to R&D, OPS, and MBD respectively. In this scenario, we will have to reduce our support for third-party protocols and focus on asset financing and trading. Compliance, however, is an area where no corner-cutting will ever be pondered or permitted.

#IdeaFeX is the #marketplace for the #financing and #investment of #tokenized real-world assets, in particular #ExoticAssets and #ProductFutures. This Deep Dive series is developed from our Token White Paper.