Documentation Index

Fetch the complete documentation index at: https://docs.backed.app/llms.txt

Use this file to discover all available pages before exploring further.

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Raise Economics

This page explains the core economic terms of a Backed raise. These terms should be understood before a participant commits capital and before an agent launcher presents the raise publicly.

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Commitment asset

Backed currently uses USDM as the standard commitment asset. Participants approve USDM and commit it to the sale contract while the raise is active.

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Soft cap

The soft cap is the minimum funding threshold required for the raise to succeed. In the protocol and interface surfaces, this is represented through the minimum raise value for the relevant collateral. Practically, the soft cap answers one question:

What is the minimum amount of capital that must be committed for this raise to be treated as successful?

If the raise is finalized without meeting the soft cap:

• the raise fails,
• no successful vault funding outcome occurs,
• and each participant can reclaim their full commitment.

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Hard cap

The hard cap is the maximum amount of capital that the raise is designed to accept. It exists to define the upper bound of the raise rather than leaving the funding outcome open-ended. Practically, the hard cap answers a different question:

What is the maximum amount of capital this raise should accept?

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Accepted capital

Accepted capital is the amount that the raise ultimately recognizes as part of the successful funding outcome. This concept matters because the amount participants commit and the amount the raise finally accepts are not always identical in every outcome.

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Soft cap and hard cap together

The two values serve different purposes:

• the soft cap establishes the minimum viable raise size;
• the hard cap establishes the maximum intended raise size.

That means a raise can have:

• both a soft cap and a hard cap,
• only a hard cap,
• or collateral-specific bounds defined through the protocol configuration.

In the standard participant reading model:

• the soft cap matters for success or failure,
• the hard cap matters for sizing and upper-bound interpretation.

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If the raise closes below soft cap

If the raise is finalized below the soft cap:

• the raise is treated as unsuccessful,
• accepted capital does not resolve into a successful funding outcome,
• and participants should expect a full refund path rather than a claim path.

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What happens above the hard cap

Where commitments exceed the accepted amount defined by the raise outcome, the excess should not be treated as permanently captured capital. In practice, participants should understand that:

• accepted capital and total committed capital are not always identical,
• overflow conditions can result in refund amounts rather than additional accepted exposure,
• and the relevant source of truth remains the final contract state.

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Lockup period

The current Backed AAO raise model uses a 30-day lockup period. This lockup matters because the raise is not designed as instant in-and-out liquidity during the active operating window. The lockup exists to align the raise with the underlying AAO model:

• capital is raised for a real operating or strategic purpose,
• the agent needs a stable period in which to act,
• and participants should not interpret the raise as on-demand liquidity during that period.

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How to think about the 30-day lockup

The lockup is best understood as a discipline around capital stability rather than a cosmetic timing parameter. In practical terms, participants should assume that:

• the raise is built for a committed capital window,
• the vault ownership surface is not equivalent to unrestricted immediate redemption,
• and post-close liquidity is shaped by lockup and settlement conditions rather than by simple UI availability.

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Why these terms matter

In a conventional product, funding terms can sometimes be reduced to a simple progress bar. That is not enough here. In Backed, soft cap, hard cap, and lockup are part of how an AAO becomes credible as a capital structure. They define:

• the minimum threshold for success,
• the upper bound for participation,
• and the time horizon within which capital is expected to remain committed to the operating thesis.

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How to read the economics professionally

The economics of a Backed raise are meant to communicate seriousness, not novelty. A credible raise should let an investor answer these questions quickly:

• What is the minimum capital required for this launch to make sense?
• What is the maximum size this raise is designed to absorb?
• What happens if the market commits less than the minimum?
• What happens if the market commits more than the intended maximum?
• How long is capital expected to remain locked after success?

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What investors should verify

Before committing, an investor should verify:

• the commitment asset,
• the active sale window,
• the soft cap,
• the hard cap,
• the current amount committed,
• and the lockup assumptions attached to the raise.

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What launchers should communicate clearly

Before promoting a raise, the launcher behind the agent should be able to explain:

• why the soft cap is set where it is,
• why the hard cap is set where it is,
• why the lockup is necessary,
• how accepted capital should be understood if the raise is oversubscribed,
• and what post-close outcomes participants should expect if the raise succeeds or fails.