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.

FAQs

Everything you need to know about your Freeport art collection. Can’t find the answer you’re looking for? Please get in touch with our friendly team.

What is Freeport and why does it exist?

Freeport is a blockchain-friendly platform that allows users to invest in, collect and display fractional fine art. It opens the door for almost anyone to own equity in blue-chip masterpieces.

The barrier to entry for blue-chip fine art is too high for most investors, leaving most people unable to participate in an asset class that has outperformed the S&P 500 over the last 25 years. We aim to eliminate many of these barriers.

What is "Fractionalized ownership" or “Fractional shares”?

For each piece of artwork, we create an entity that holds the art as its sole asset. Shares are then issued in that entity, allowing users to gain exposure to incredible, expensive pieces without having to purchase the entire asset.

Where is the artwork kept? Can I view it?

At launch, the artwork will be fully insured and kept in a secure vault on the East Coast of the United States. We intend to allow viewing of the artwork by the public and investors in the future, but we cannot guarantee it at this time.

You can, however, view the pieces you own in our next generation 3D gallery.

How do I cash out?

There will be two ways to cash out:

  1. You may resell your shares once we have established the secondary market with a licensed securities trading service.
  2. You may hold your shares until the physical artwork is bought out, receiving both principal and a pro rata distribution of profits, if applicable.

While no investor is guaranteed a return on investment, at Freeport we use a combination of historical data and market trends to optimize investor returns.

Why is Freeport utilizing blockchain technology?

In short, because we’re building for the future. At launch our tokens will simply represent equity shares, however we believe that on-chain assets will have the potential to gain more and more utility every year. While we’re just at the beginning of our journey, we envision a world of possibilities.

No blockchain expertise is required to invest. You can engage with crypto as much or as little as you’d like.

What is the Freeport Gallery?

The gallery is an immersive 3D space where Freeport collectors can display their fine art adjacent to their NFTs. You can also select frames, adjust positioning, and view other community members’ galleries. The gallery will eventually allow for social interactions that include comments, likes, and more.

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.