> ## 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.
# How Backed Works
> The platform model from identity prerequisite through launch, commitment, and settlement.
# How Backed Works
Backed is easiest to understand as a structured launch and settlement model for agent-led organizations.
| Layer | Role |
| --------------- | ------------------------------------------------------------------ |
| Identity | Resolves the agent referenced by the raise |
| Project layer | Creates the raise record, stores configuration, and gates approval |
| Sale | Manages commitments, finalization, claims, and refunds |
| Vault ownership | Represents the post-close ownership surface |
| Application | Presents the raise to participants in a readable form |
## The AAO context
The point of this model is not only to launch a raise cleanly. It is to make an AAO legible as an organizational and financial object.
That means a reader should be able to understand:
* what identity the organization is tied to,
* when the organization has merely been instantiated,
* when it has actually been approved for launch,
* when it is actively accepting capital,
* and how its post-close economic state should be interpreted.
## Two ways to read the platform
There are two useful ways to understand Backed.
The first is structural: identity, factory, sale, treasury controls, and interfaces each play a distinct role.
The second is chronological: a raise moves from identity prerequisite to submission, review, approval, commitment, resolution, and post-close ownership outcomes.
Most confusion comes from mixing these two views. A reader sees a project in the interface and assumes it is already fully launched, when what they may be seeing is only one stage in a broader lifecycle.
## Core flow
A valid agent identity must already exist in the ERC8004 Identity Registry before the raise can be opened.
The launcher defines the public materials, economics, and structure of the raise around that agent identity.
The project is instantiated onchain and receives the addresses needed for the raise lifecycle.
The launch is reviewed, verified, and approved before it should be treated as live or marketed as open.
Investors commit capital during the active sale window under the published economic terms.
Finalization, refundability, claims, lockup, and later redemption behavior are determined by sale and vault state.
## Why this matters for AAOs
AAOs are still an emerging category. Because of that, the interpretive burden is higher than it would be for a familiar financial product.
Readers need more than a transaction flow. They need a framework for understanding what the organization is at each stage. Backed’s lifecycle model exists for exactly that reason.
## What changes at each stage
When a raise moves from one stage to another, the meaning of the project changes.
* Before creation, there is no project-level raise state.
* After creation, a project exists but may still be non-live from a market perspective.
* After approval, the project can be treated as launched.
* During commitment, the sale surface is active and economically relevant.
* After resolution, participants should reason about claims, refunds, lockup, and ownership according to the contract-defined outcome.
At a broader level, the system is moving the AAO from concept to instantiated object, from instantiated object to approved launch, and from approved launch to economically active organization.
## Why the model is structured this way
Backed does not treat identity creation as an implicit side effect of opening a raise. Identity is upstream and explicit.
A project can exist onchain before it is approved. Approval exists to preserve a deliberate launch boundary.
A reviewed launch is easier to interpret than an unfiltered listing, but review does not convert an emerging organization into a risk-free one.
Interfaces can expose state and facilitate action, but they do not define lifecycle truth. The contracts do.
## Practical implication
Anyone evaluating a raise should separate four different questions:
* Does the project exist?
* Has it been approved?
* Is the sale currently active?
* What does the current sale state imply for capital, claims, refunds, or lockup?
If those questions are answered in the wrong order, interpretation errors follow quickly. A project that exists may be treated as if it were already launched. A raise that is visible may be mistaken for one that is actively open. A close event may be mistaken for finalized settlement. The purpose of Backed’s structure is to reduce those ambiguities.