PIPE's revenue model replaces the equity-only wait for a distant exit with monthly cash income from the first month a Protégé Company generates net sales. The PEX Asset Manager distributes a defined percentage of monthly trading revenue to universities and founders — as cash in the early years, transitioning progressively to Revenue Tokens as the company matures.
Revenue flows monthly through the Asset Manager · parameters adjust cash/token split by KPI performance
The equity model concentrates all returns at a single, distant, binary event: exit. For the majority of Protégé Companies that achieve real commercial operation but never pursue a major acquisition or IPO, the university and researcher receive nothing regardless of the revenue generated. PIPE's revenue model changes the structure fundamentally.
Universities and researchers receive shares. Those shares generate income only at an exit event that may be a decade away or may never arrive. For roughly 80% of spinouts that achieve commercial operation without a major exit, equity returns nothing to the science creators.
A defined percentage of the Protégé Company's monthly net sales flows to the university and founder through the PEX Asset Manager. Returns are tied to trading, not to exit. A company generating £500k/year returns value every month it operates. The revenue obligation is standardised at QED formation: nothing to negotiate.
Protégé Companies on an IPO or acquisition trajectory retain full equity participation alongside the revenue model. PIPE and its co-investors hold equity positions through the PEX growth token mechanism and are also natural participants in the Revenue Token market. Both instruments coexist within the PEX Asset Manager.
The revenue obligation percentage is set once at the QED formation stage gate with no negotiation. From first trading, monthly declarations trigger the PEX Asset Manager to calculate and distribute payments according to five live parameters.
The revenue obligation percentage (typically 1–3% of net sales) is defined in the QED Stage 3 gate documentation before any commercial engagement begins. It is split between the university and the founding team in an agreed ratio, and documented in the Protégé Company's immutable QED record. Because the terms are standardised, there is nothing to negotiate at incorporation.
The Protégé Company declares audited revenue monthly. This is not an external compliance obligation: it is a mandatory deliverable within the QED stage gate framework, the same system that manages every other milestone. The declaration triggers the PEX Asset Manager to calculate the obligation and initiate distribution. No declaration triggers no distribution and a gate hold.
The Asset Manager applies the five live parameters to determine what proportion of the monthly obligation flows as cash and what proportion as Revenue Tokens. These parameters are linked to KPI performance: a company exceeding its milestones may unlock a more cash-favourable ratio; a company behind its milestones may shift toward a greater token proportion, protecting its operational cashflow during the period it most needs capital to recover.
Universities receive the majority of their share as Revenue Tokens, which are tradeable on the PEX and redeemable at maturity. This preserves university liquidity options without draining the Protégé Company's operational cash. Founders receive their share originally as cash (providing real income from day one), transitioning toward tokens over time, with cash capped at a defined maximum per period.
Revenue Tokens are not exclusively held by universities and founders. PIPE and its co-investors — including gDAO and xxDAO positions within the PEX — are the natural secondary market for Revenue Tokens. An investor who holds equity (growth tokens) in a Protégé Company and wants additional exposure to its revenue trajectory can purchase Revenue Tokens directly on the PEX.
The revenue obligation runs for a defined period (typically 10–15 years) with a defined total cap. The Protégé Company's long-term growth is never permanently encumbered. All parties model the cost with certainty from day one. The cash-per-period maximum additionally ensures that the obligation never becomes operationally destabilising regardless of revenue growth.
The cash/token split is not fixed: it is governed by five parameters that the PEX Asset Manager applies at each monthly declaration. Parameters are linked to KPI performance milestones within the QED gate framework.
An absolute ceiling on the cash component of the obligation in any given month. Any entitlement above this ceiling is automatically issued as Revenue Tokens. Protects operational cashflow at any revenue level.
The percentage of net sales generating the cash/token pool may change as the company progresses through QED stages. Early stages carry a lower percentage; later stages may carry a higher one as cashflows strengthen.
Exceeding KPI milestones may unlock a more cash-favourable ratio for founders. Missing milestones shifts the ratio toward tokens, preserving operational cashflow for the company while still honouring the obligation through token issuance.
The proportion of the university's share paid in cash versus tokens at each point in time. University share is weighted predominantly toward tokens throughout, giving the university tradeable instruments without draining the company.
The proportion of the founder's share paid in cash versus tokens. Founders receive a cash-weighted distribution originally (providing real monthly income), transitioning to a greater token proportion as the company matures and cashflows are established.
The university is an institution that can hold and trade tokens at its discretion. The founder is an individual who may need real income from day one. The model acknowledges this difference explicitly: founders receive cash first because it functions as income; universities receive tokens first because the tradeable instrument is appropriate for institutional portfolio management.
Revenue Tokens are issued by the PEX Asset Manager when a monthly declaration triggers the token component of the obligation. They are tradeable on the PEX from issuance and are available to any PIN-cleared investor, not only universities and founders.
The ratios below are illustrative defaults. Actual ratios are set by the five parameters and will vary by company stage, KPI performance, and the specific terms agreed at QED formation.
Founder ratio — cash then tokens
University ratio — predominantly tokens throughout
Based on a 1% net sales obligation. Figures illustrative. Actual values depend on QED formation terms.
| Phase | Annual Revenue | Annual Obligation (1%) | Founder Cash | University Tokens | Effect |
|---|---|---|---|---|---|
| Year 1 (pre-revenue) | £0 | £0 | £0 | 0 | No obligation; QED milestone gates active |
| Year 2–3 (early trading) | ~£500k/yr | ~£5k/yr | ~£3,250/yr cash | ~1,750 tokens/yr | Real monthly founder income from first trading; tokens accumulate for university |
| Year 4–6 (growth) | ~£3m/yr | ~£30k/yr | ~£15k/yr cash | ~11,250 tokens/yr | Material founder income; university token position builds liquidity |
| Year 7–10 (mature) | ~£10m/yr | ~£100k/yr | ~£30k/yr cash | ~42,500 tokens/yr | Cash component capped; tokens dominant; investors active in secondary market |
| Year 11–15 (established) | ~£20m/yr | ~£200k/yr | ~£30k/yr cash (capped) | ~85,000 tokens/yr | Obligation winds toward completion; cumulative token market well established |
Cash payments from day one of commercial operation. Not a theoretical future stake. Not dependent on anyone buying the company. A founder building a sustainable business receives ongoing income from the model that funded it.
Revenue Tokens accumulate and are tradeable at the university's discretion. Income flows from the moment the Protégé Company trades, not from the rare exit event that equity depends on. Provides a predictable, monthly recurring stream from the broader portfolio.
Investor positions within the PEX hold growth tokens (equity) in Protégé Companies and can also purchase Revenue Tokens on the secondary market. The two instruments provide different risk and return profiles within the same validated portfolio.
Revenue Tokens are available to any PIN-cleared investor on the PEX. Early-stage tokens from a growing company are speculative growth instruments. Late-stage tokens from an established company are closer to short-duration yield instruments. The same token class suits different investor profiles at different lifecycle stages.
Whether you are a researcher, a university considering a partnership, or an investor interested in Revenue Token access — the conversation starts here.