Governance & Structure

The structure has to say who controls what, who gets paid first, and what changes under stress.

This page is the structural layer. It explains claim priority, ordinary control, trigger rights, reserved matters, and mission protections so the venture does not depend on implied understandings.

Capital stack order

One Hadto venture uses three published layers: senior lending at the top, a subordinated community participation layer in the middle, and operator common equity at the bottom where first loss sits and ordinary control stays.

Capital stack architecture for one Hadto ventureThree stacked capital layers. Senior lending sits at the top with first claim and yield-only returns. The community token layer sits in the middle with subordinated yield plus upside. The operator equity layer sits at the bottom, takes first loss, and holds ordinary control while the venture is solvent.Single-venture capital stackClaim priority runs top-downCASH WATERFALLLOSS ABSORPTION1Senior Lending LayerSecured term debt and small working-capital revolverSecured claim; first-priority lien on venture assetsAbsorbs loss last, after all junior capital is exhausted10-12% gross IRR; yield onlyMonthly interest + scheduled amortization2Community Token LayerTransfer-restricted revenue-share preferred unitsSubordinated to senior debt; senior to common equityAbsorbs loss after common equity and before senior debt15-18% gross IRR; yield + upside kickerQuarterly distribution when covenant tests pass3Operator Equity LayerCommon equity; Hadto participates only in this layerResidual claim; owner-operator holds 60% voting commonTakes first loss and keeps ordinary control while solvent25%+ target IRR; residual upsideResidual quarterly or semiannual common distributionsOperating cash: reserves and statutory obligations -> senior debt service -> community distribution -> common residualRestructuring control shifts to senior lenders only after a payment default or covenant breach.
Hadto participates only inside the Operator Equity Layer. It does not hold a separate sponsor preference that jumps ahead of the community or the owner-operator.

Ordinary control and trigger rights

Operator common keeps ordinary control

The owner-operator keeps day-to-day authority while the venture is solvent and in compliance, with control living in common rather than in a hidden sponsor preference.

Senior rights activate through triggers

Lender remedies, consultation rights, and workout control only step forward after documented default, covenant breach, or other negotiated trigger events.

Community participation stays economic

Community rights are defined through the participation instrument, not through ordinary operating votes that would blur control lines inside the venture.

Hadto stays inside the common layer

Hadto participates through sponsor common in the operator equity layer and should not create a fourth layer that jumps ahead of the published waterfall.

Reserved matters and reporting

  • Changes to ordinary voting control, new senior debt, material asset sales, and distribution policy should stay inside explicit reserved-matter rules.
  • Monthly, quarterly, and annual reporting has to line up with the claim priorities and trigger rights attached to each layer.
  • Material-event notices should cover payment stress, litigation, operator change, control changes, and any shift that could impair the published structure.

Mission lock and conflict discipline

  • Mission protections should not be removable by an ordinary operating vote.
  • Conflict rules should disclose sponsor incentives, operator incentives, and any class-level consent rights before launch.
  • Governance language should describe both the healthy case and the downside case so control does not become ambiguous under stress.

Source documents

The long-form versions live in the public memo and charter draft. Those documents carry the detailed assumptions behind the page-level summary here.