# Membership

# How can I contribute to The LAO and become a member?

Membership in The LAO is currently limited to accredited investors, as defined under U.S. law. The total number of members will be capped at a maximum of 99 members.

Members have the opportunity to contribute Ether to The LAO by purchasing units representing an ownership in The LAO ("LAO Units"). The members reserve the right to create a LAO Token to represent LAO Units via a Member votes.

Units are sold in blocks. Each block of LAO Units (or 100,000 units) is currently being sold for 310 ETH and provide a member with 0.9% of the voting rights in The LAO, along with 0.9% pro rata rights to any proceeds from investments. The per unit number to buy units into The LAO will increase incrementally after every investment The LAO makes.

Each member is be permitted to purchase up to nine blocks of LAO Units (or 7.2% in total).

The sale will be denominated in Ether. Ether to US dollar calculations will be provided via a real time oracle feed from Chainlink (opens new window).

# Are The LAO Units securities?

The LAO Units have not been approved or disapproved by the U.S. Securities and Exchange Commission, any state securities commission in the United States, or any other global regulatory authority.

# Can I contribute Bitcoin, Dai, or other assets to The LAO?

All contributions are currently only limited to Ether, unless the members agree otherwise.

# Why is membership in The LAO limited to accredited investors and 99 members?

As noted above, the U.S. Securities and Exchange Commission and/or equivalent government bodies in other jurisdictions have not determined whether membership interests in The LAO (represented as units) are securities.

In the abundance of caution, the limits in membership and accreditation status for U.S. contributors are put in place to:

  • comply with U.S. securities law;
  • prevent any one party from controlling a disproportionate amount of The LAO; and
  • limit the risk of look through issues for The LAO Members that are organized as funds or other legal entities.

# Are there any other requirements needed to become a member?

To contribute Ether to The LAO, members will need to go through accredited investor, anti-money laundering ("AML"), Know Your Customer ("KYC"), and Office of Foreign Assets Control ("OFAC") checks as defined under U.S. law and as discussed further below. A joining member will need to deposit a sufficient amount of Ether from the member's Ethereum address in order to complete the membership process.

A member will also need to submit sufficient information to verify the potential member's identity for AML, KYC, and OFAC checks, including:

  • uploading a passport or a state issued license;
  • providing a social security number or Tax ID; and
  • providing proof of the member's primary residence.

Accredited investors include:

  • Individuals who have an annual income exceeding $200K or a married couple that has joint income exceeding $300K in the two most recent years and have a reasonable expectation of reaching the same income level this year.
  • Individuals who have a net worth that exceeds $1 million (excluding the individual's primary residence).

With respect to legal entities:

  • Funds and trusts, with total assets in excess of $5 million, which were not formed specifically to purchase the subject securities, whose purchase is directed by someone who has sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
  • Any entity in which all of the equity owners are accredited investors.

The full definition can be found here (opens new window).

In order to register and validate members, a potential member will need to supply The LAO with sufficient information to assess whether the member meets these legal requirements, which will be confirmed by The LAO's service provider.

==Post Contribution== Once a Member makes a contribution, The LAO's underlying smart contracts will need to whitelist the Member's applicable Ethereum address. The process for validating and whitelisting the Member's Ethereum address will be done in order of contribution and will take at least 14 total days to complete. The process takes 7 days to process the proposal and another 7 days to provide Members the right to "rage quit" if they so choose.

# Why is there a fixed amount of Ether upon submitting an application?

If everyone submits a different amount of Ether, the interests in The LAO would have variable pricing.  If a member "rage quits" then that member could conceivably get back more Ether than he or she contributed.