Governance on Spring gives investors a limited, on-chain vote over the funds held in escrow for their round. It does not cover how the company is run.
How governance is organized
Governance applies to each round separately. Each round has its own escrow, vesting and votes, and rounds never share proposals.
Before any proposal goes to a vote, Spring checks that it is valid: it must be a permitted proposal type, only one proposal can be open at a time, and the proposer must be eligible. Spring does not assess whether a proposal is a good idea.
A proposal passes if at least 51% of the tokens voted are in favor and the round’s quorum is met. Quorum is the minimum level of participation required for a vote to count. It is set for each round and disclosed in the round’s terms.
Proposal types
Proposal | Submitted by | What it does |
Allowance increase | Company | Raises the monthly allowance paid from escrow. |
One-time release | Company | Releases a single additional sum from escrow. |
Reclaim | Investors | Stops future releases to the company and returns the remaining investment to investors. |
For investors
Who can vote. Only investors who took part in a round can vote on that round’s proposals. Tokens from an earlier round cannot be used to vote on a later round.
Voting power. Voting power is based on an investor’s full allocation in the round, including tokens that have not yet vested. This means governance works from the start of the round.
Requirements. Investors do not need to lock up, transfer or give up their tokens to vote. Voting requires a valid verification and an allocation in the round.
If a reclaim passes:
Future monthly releases to the company stop.
The company receives one final wind-down payment, set out in the round’s terms, to cover shutdown costs.
The investment remaining in escrow is returned to investors in proportion to their allocation in the round.
Each investor keeps the share of their tokens that matches the share of funds already released to the company, and those tokens vest immediately. The remaining unvested tokens are cancelled while still held in the vesting contract. Tokens are never taken from an investor’s wallet.
The cell’s shareholding in the company is reduced to match the funds the company actually received.
Funds already released to the company before the reclaim are not recovered.
Example: Say $1M was raised for 10% of the company (10M tokens minted for investors). By the time the vote passes, 60% of escrow ($600K) has already been released to the company. The wind-down payment adds another, for example, $100K, bringing the total released to 70%. Investors' entitlement becomes 70% of their original allocation — 7M of their 10M tokens. The remaining 3M tokens are burned while still in escrow (tokens are never pulled from an investor's wallet), and the $300K left in escrow is paid out to investors pro-rata by their allocation.
On the legal side, the SPC's ownership stake in the company shrinks to match — it returns the corresponding 3% to the OpCo (Operating Company), retaining the 7% still backing investors' tokens.
For companies
The company can submit proposals to increase its monthly allowance or request a one-time release from escrow.
Founders do not vote on proposals for their own company’s round. If a founder also invested in the round, they can vote with that investment on the same terms as any other investor, with no additional voting power.
If investors pass a reclaim, the company keeps the funds already released to it and receives a final wind-down payment. The company keeps control of its business. The cell’s shareholding is reduced to match the funds the company received.
Need more help?
We’ve aimed to cover everything here, but if your question isn’t answered — or you’ve spotted something that needs correcting — contact us at team@usespring.io
A member of the team will respond.