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🏡 Introduction

The Village System is the core framework that enables Backerville’s equity diversification solution. These legally compliant investment clubs allow startup employees to pool their equity upside while maintaining their existing ownership structure until a liquidity event occurs. Villages serve as the engine of collective diversification, operating within established legal frameworks to provide protection against concentrated risk. Each village represents a niche community where members can transform their single-company exposure into a diversified portfolio.

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🧩 Key Components

Structure & Membership

The organizational framework and membership requirements for villages

Promissory Note

The innovative legal mechanism that enables diversification without immediate share transfers

Governance Model

How villages make decisions and manage portfolio allocations

Joining & Exiting

The process for entering or leaving a village and the associated mechanics

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✅ Benefits of the Village Structure

  • Legal Compliance: Stays within 3(c)(1) investment club regulations (max 100 members)
  • No Transfer Restrictions: Sidesteps company ROFR and transfer limitations
  • Collective Protection: Spreads risk across multiple familiar companies
  • Simplified Taxation: No taxable events until actual liquidity occurs
  • Maintained Ownership: Members keep their equity shares until a triggering event
The Village System combines innovative legal structures with community-driven allocation to create a solution that works for startup employees without requiring company approval or complex secondary market transactions. Explore each subpage to understand the intricate details of how villages operate and how they benefit members.