The founding cap table, the pre-seed unit structure, the tiered super-voting design, the vesting framework, and the Canadian benchmarks behind every number.
4orm Finance is not a single-company tech startup. It is being incorporated as Canada's regulated control plane for tokenized real-world assets: a parent holding company, a CSA-recognized marketplace, a CIRO member exchange, and a qualified Canadian trust company, with KCS Capital as the independent technology developer. The capital structure has to support that operating reality, and every founding allocation, vesting decision, and round mechanic in this memorandum is anchored to current Canadian market data and the securities-law framework that governs the raise.
| ELEMENT | WHAT IT IS |
|---|---|
| Founding shares | 20,000,000 common shares issued at $0.001 (founder tax-basis pricing) |
| Pre-seed | Priced unit offering at $10M pre-money, $3M minimum raise. Each $1,000 unit = 1 redeemable preferred share ($500 face) + 1,000 common shares ($500 at $0.50) + a half warrant exercisable at $1.50 |
| Common dilution | 13.04% at close; 15.79% fully diluted if warrants are exercised |
| Preferred redemption | 10% of company revenues redeem preferred from Year 2 onward, with a 3% redemption premium accruing per year |
| Team pool | 17% of founding shares (3,400,000), Class C 1:1 voting common; 14.78% of post-pre-seed |
| Control | Tiered super-voting gives the CEO ~83.0% of votes at founding and ~81.3% post pre-seed; the founder bloc holds ~95% post pre-seed |
Every decision is anchored to (a) current market data on early-stage capital formation, led by Canadian sources (Osler 2025 Deal Points Report, CVCA market data, Canadian dual-class precedents) and (b) the Canadian securities-law framework that governs the raise and the operating entities (NI 45-106 and 31-103, the BC Business Corporations Act and BCSC, the CIRO Digital Asset Custody Framework). Source citations are in Section 6.
20,000,000 founding common shares issued at $0.001 per share. The table shows ownership at founding (pre-money), at pre-seed close (post-money, before warrants), and fully diluted (warrants exercised). The full workbook, including the Post-Seed projection, is document 08.2.
| HOLDER | CLASS | FOUNDING % | POST-PS % | FD % |
|---|---|---|---|---|
| Chad R. Johnston | Class A (10:1) | 59.0% | 51.3% | 49.7% |
| Sam Mraiheen | Class B (5:1) | 10.0% | 8.7% | 8.4% |
| Kevin Wong | Class B (5:1) | 10.0% | 8.7% | 8.4% |
| Bruce Fair (Founding Advisor) | Class C (1:1) | 3.0% | 2.6% | 2.5% |
| Don H (Founding Angel) | Class C (1:1) | 1.0% | 0.9% | 0.8% |
| Team pool | Class C (1:1) | 17.0% | 14.8% | 14.3% |
| Pre-seed investors | Pref + Common | — | 13.0% | 15.8% |
Without super-voting, Chad would fall below a voting majority by the end of Series A. The tiered structure is dilution insurance against future rounds: the 10:1 ratio preserves the CEO's voting majority through Series C even as economic ownership dilutes to roughly 24%.
Class A and B auto-convert to common on departure, termination, or ceasing to be an active founder. This closes the "departed founder keeps super-votes" gap that sophisticated investors flag in diligence. The 10-year time-based sunset steps Class A from 10:1 to 6:1 and Class B from 5:1 to 3:1, a 40% reduction in each multiple calibrated to preserve founder primacy through the stay-private trajectory. The Mission Anchor (document 08.4) operates independently of this sunset.
The pre-seed is structured as a unit offering, preferred plus common plus warrant, rather than a conventional priced equity round of preferred only. This is the structure conventionally used in Canadian resource and capital-markets transactions, which is the network through which the round is being placed. Each unit packages a redeemable preferred share (a quasi-debt instrument), a fixed slice of common equity, and a warrant kicker.
| COMPONENT | TERMS |
|---|---|
| Unit price | $1,000 per unit |
| Redeemable preferred | 1 share, $500 face value; redeems from revenues from Year 2 |
| Common equity | 1,000 shares, $500 worth at $0.50 per share |
| Warrant | 1/2 warrant per unit, exercisable at $1.50 |
| Pre-money / minimum raise | $10M pre-money / $3M minimum |
Per the CIRO Digital Asset Custody Framework, marketplace, exchange, and custody must be structurally separated from inception. This is a requirement of operating in the regulated digital-asset perimeter, not an optimization. Each entity needs its own operating lead, compliance and risk function, and controls. The 17%-of-founding team pool (3,400,000 Class C common, 14.78% post-pre-seed) is sized at the top of the pre-seed range for exactly this reason: a single-entity SaaS company would carry a 10% pool, but 4orm must staff dedicated Compliance, Regulatory Affairs, Risk, Custody Operations, and Institutional Sales leadership across separately governed entities.
The platform must also coordinate across six regulators, CIRO, the CSA, OSFI, FINTRAC, the Bank of Canada, and the provincial commissions (BCSC, ASC, OSC, AMF, FSRA), each requiring distinct ongoing engagement. A Head of Regulatory Affairs supported by a CCO is the minimum credible staffing for that surface area. The corporate structure chart is document 08.3; the operating organization is document 04.2.
All founders are on a four-year vest with a one-year cliff, by reverse vesting: shares are issued at incorporation with a company repurchase right over unvested shares at $0.001 that lapses as the shares vest. Pre-seed and seed investors require this; a founder whose shares do not vest is a disqualifying diligence flag. Sam, Kevin, and Bruce vest on a milestone basis reviewed quarterly by the Advisory Council; secured-at-signing carve-outs (Sam 3%, Kevin 3%, Bruce 1%, Chad ~12% founder treatment) are vested at day one and retained on departure except for a for-cause exit. Once a share is vested it is the holder's property and is not subject to clawback.
| DECISION | BENCHMARK IT IS MEASURED AGAINST |
|---|---|
| Chad at 59% founding | Above the ~44% Carta median for a lead founder, justified by originator status, sole capital to date, and the CEO role |
| 4-year vest, 1-year cliff | Documented market standard across Canadian and US venture practice (NVCA model documents adopted in Canada; Osler 2025) |
| Advisory Council 6 × 0.375% | Midpoint of the FAST 0.25 to 0.5% strategic-advisor range; the binding quarterly milestone-review authority justifies the position |
| Bruce at 3% | Top of the Founding Advisor (Tier 3) range; service equity for an advisor role, never a finder's fee tied to dollars raised (NI 31-103) |
| 15% option pool | Top of the pre-seed range, justified by the multi-entity, multi-regulator hiring need; pool refresh at Seed and Series A is the Canadian convention |
| 10:1 / 5:1 / 1:1 tiers | Matches Google and Meta on the founder multiple; modest relative to Lyft (20:1) and Shopify's 40%-of-all-votes Founder Share |
| $10M pre-money | Upper-tier of Canadian pre-seed; defensible by the regulated-infrastructure category, the operating-grade product, and Bank of Canada Project Samara alignment |
The closest operating analogue is Tetra Digital Group: Canada's first regulated crypto custodian, structured as a HoldCo over a regulated Trust Co, which raised roughly C$10M in 2025 backed by Wealthsimple, Shopify, ATB Financial, and National Bank, exactly the institutional partner profile 4orm targets. The stay-private posture matches 1Password, Wealthsimple, Clio, Hopper, and Cohere; the founder-controlled governance matches Shopify, Lightspeed, and Coveo.
Sources: Osler 2025 Deal Points Report; CVCA 2025 Seed Investing in Canada; Carta 2024 founder-split and cap-table data; Founder/Advisor Standard Template (FAST); NVCA model documents; Shopify, Lightspeed, and Coveo public filings; BetaKit, Globe and Mail, CoinDesk on Tetra Digital Group. Full citations in the Benchmark Matrix sheet of document 08.2. Working draft; subject to counsel review prior to incorporation.
Prepared for approved data room members. This document does not constitute an offer to sell securities or a solicitation of an offer to buy securities. 4orm Finance Holdings Inc. is the parent entity of 4orm OpCo, 4ormEx OpCo, and 4orm Trust Co; technology is developed by KCS Capital, an independent research and development firm.