Procurement & Technology
10% at primary issuance
This one-time fee covering the expenses associated with sourcing the artwork and delivering the convenient digital experience you see today.
How It Works
Collecting on Freeport
Everything you need to know about our process
With Freeport, you can own equity shares backed by legendary fine art. We offer fractional exposure to this new caliber of investment - one based on real assets that stand the test of time. Here's a brief summary on how it works from one of our top advisors, Jon Rettinger.
The finer details
An inside look into our process
Before the offering
First, we evaluate and acquire physical artwork, selecting pieces we believe will deliver the strongest returns over the holding period. We then set up a holding company for the asset – which we eventually issue shares in - before filing documentation with the SEC under Regulation A. This process allows our offerings to be sold as securities. Please see our latest offering circular for full details and relevant disclosures.
Purchasing Shares
Once each offering has been qualified by the SEC, investors will have the option to purchase shares of the artwork through a primary issuance, where Freeport offers shares directly to the public. Investors select the number of shares they wish to purchase, add a payment method, complete KYC, and complete the transaction. Shares will be delivered to investors upon the offering being fully subscribed. Note that only 1,000 investors will have access to each initial offering, to ensure a tight community of collectors.
Owning on Freeport
Let’s get to the fun part - owning shares on Freeport! Art shares on Freeport are sold as securities that are backed by physical assets. Importantly, our shares are represented by tokens on the Ethereum blockchain. That means investors can use the 3D Gallery to display their favorite digital artwork held in an Ethereum wallet alongside the pieces sold on Freeport. As the market matures, Freeport plans to integrate additional blockchain-based utility.
For those of you unfamiliar with blockchain, don’t worry. You can interact with blockchain as little as you want, or not at all, if that’s the experience you prefer.
Selling & Cash Out
A few months after shares have been delivered, investors will have the option to sell them once we have established a secondary market with a licensed securities trading service*, or hold them them until the physical artwork itself is resold. We anticipate holding onto the artwork for three to seven years on average, but we are always monitoring the market and will take advantage of earlier offers if they benefit our investors.
Once the artwork is sold, we will calculate applicable profits and return them to investors alongside original capital contributions on a pro-rata basis** . We will then distribute tax forms, burn the tokens that represent your equity, and wind down the holding company.
How we make money
At Freeport, we believe in full transparency when it comes to collecting fees. Sourcing, insuring, SEC qualification, and fractionalizing fine art - legally, here in the US - is not a zero cost endeavor. But we make every effort possible to minimize these for our investors. These costs are baked into the share price to keep things simple.
Management
1.5% annually
This covers the costs of storage, insurance, and overall administration of the artwork.
You won't have to actually “pay” anything annually - Freeport will issue shares equivalent to 1.5% of the painting's value to itself, rather than bother you.
Post-Sale
10% of profits
Once a buyer is found, 10% of any applicable profits will be retained by Freeport, helping to ensure that our incentives are aligned in selling the artwork at the best possible time for our investors.
Want more information? View the offering circular.