SFDR Statement

1. Sus­tain­abil­i­ty Risks
Blockchain Founders Cap­i­tal Man­age­ment GmbH (“BFC”) con­sid­ers sus­tain­abil­i­ty risks as part of its in­vest­ment de­ci­sion-mak­ing process. Sus­tain­abil­i­ty risks are en­viron­men­tal, so­cial, or gov­er­nance events or con­di­tions, the oc­cur­rence of which could have an ac­tu­al or po­ten­tial ma­te­r­i­al ad­verse ef­fect on the val­ue of the in­vestment.

BFC con­sid­ers sus­tain­abil­i­ty risks as part of the due dili­gence process be­fore any in­vest­ment. This also in­cludes an as­sess­ment of sus­tain­abil­i­ty risks. Such assess­ment is be­ing done through an in­for­mal process as ap­pro­pri­ate in light of the cir­cum­stances of the in­di­vid­ual case. The re­sults of such as­sess­ment are con­sidered when the in­vest­ment de­ci­sion is be­ing tak­en.

How­ev­er, BFC re­mains free in its de­ci­sion to re­frain from in­vest­ing or to in­vest de­spite sus­tain­abil­i­ty risks, in which case BFC can also ap­ply mea­sures to re­duce or mit­i­gate any sus­tain­abil­i­ty risks. At all times, BFC will ap­ply the prin­ci­ple of pro­portion­al­i­ty, tak­ing due ac­count the strate­gic rel­e­vance of an in­vest­ment and its transac­tion­al con­text.

2. No Con­sid­er­a­tion of Sus­tain­abil­i­ty Ad­verse Im­pacts
BFC does not con­sid­er the ad­verse im­pacts of its in­vest­ment de­ci­sions on sus­tainabil­i­ty fac­tors and does not use sus­tain­abil­i­ty in­di­ca­tors. Sus­tain­abil­i­ty fac­tors are en­vi­ron­men­tal, so­cial, and em­ploy­ee con­cerns, re­spect for hu­man rights, and the fight against cor­rup­tion and bribery. Giv­en that the Sus­tain­able Fi­nance Dis­clo­sure Reg­u­la­tion (EU 2019/2088) ("SFDR") and the ac­com­pa­ny­ing Reg­u­la­to­ry Tech­ni­cal Stan­dards ("RTS") are new leg­isla­tive acts, there is very lit­tle or no prac­ti­cal ex­pe­rience or prac­tice con­cern­ing the ap­pli­ca­tion of their re­spec­tive pro­vi­sions. Therefore, sub­stan­tial le­gal un­cer­tain­ties would re­main when ap­ply­ing those pro­vi­sions to the strate­gies pur­sued by BFC. More­over, the bur­den as­so­ci­at­ed with con­sid­ering ad­verse im­pacts on sus­tain­abil­i­ty fac­tors (par­tic­u­lar­ly if sus­tain­abil­i­ty in­di­ca­tors are used) is dis­pro­por­tion­ate in light of the min­i­mal rel­e­vance that such im­pacts could have in the con­text of BFC's in­vest­ment strat­e­gy: BFC pur­sues an ac­tive venture cap­i­tal strat­e­gy and in­vests in young start-ups in the digi­tal econ­o­my. As a re­sult, BFC’s in­vest­ment de­ci­sions will hard­ly ever im­pact sus­tain­abil­i­ty fac­tors. If and to the ex­tent that the le­gal un­cer­tain­ties will be resolved and a prac­ti­ca­ble mar­ket and ad­min­is­tra­tive prac­tice will evolve in this regard, BFC will re-eval­u­ate con­sid­er­ing the prin­ci­pal ad­verse im­pacts of its invest­ment de­ci­sions in due course.

3. Re­mu­ne­ra­ti­on Dis­clo­su­re
As a reg­is­tered al­ter­na­tive in­vest­ment fund man­ag­er with­in the mean­ing of sec­tion 2 (4) of the KAGB, BFC does not have, and does not need to have, a re­mu­ner­a­tion guide­line or pol­i­cy un­der the re­quire­ments of the KAGB. Sus­tain­abil­i­ty risks are not con­sid­ered con­cern­ing the de­ter­mi­na­tion of re­mu­ner­a­tion.

4. Sus­tain­abil­i­ty-re­lat­ed Dis­clo­sures
The fol­low­ing dis­clo­sures re­late to Blockchain Founders Cap­i­tal III GmbH & Co. KG (“Fund”).

The Fund con­sid­ers cer­tain en­vi­ron­men­tal and so­cial char­ac­ter­is­tics as part of its in­vest­ment de­ci­sions but does not seek to make sus­tain­able in­vest­ments as defined in the SFDR. The con­sid­er­a­tion of en­vi­ron­men­tal and so­cial char­ac­ter­is­tics is car­ried out both be­fore and af­ter the in­vest­ments. For this pur­pose, in­for­ma­tion is ini­tial­ly and reg­u­lar­ly ob­tained from the port­fo­lio com­pa­nies us­ing qual­i­ta­tive queries. The Fund in­cor­po­rates in­vest­ment ex­clu­sions (neg­a­tive screen­ing) as­pects dur­ing the de­ci­sion-mak­ing process. The ac­tions and de­ci­sions de­scribed in the fol­low­ing sec­tion are each made by BFC for and on be­half of the Fund.

No sus­tain­able in­vest­ment ob­jec­tive
The Fund pro­motes en­vi­ron­men­tal or so­cial char­ac­ter­is­tics but does not have sustain­able in­vest­ment as its ob­jec­tive.

En­vi­ron­men­tal or so­cial char­ac­ter­is­tics of the fi­nancial prod­uct
This fi­nan­cial prod­uct pro­motes en­vi­ron­men­tal and/or so­cial char­ac­ter­is­tics by imple­ment­ing cer­tain in­vest­ment ex­clu­sions. The Fund does not in­vest, guar­an­tee or oth­er­wise pro­vide fi­nan­cial or oth­er sup­port, di­rect­ly or in­di­rect­ly, to com­pa­nies, in­clud­ing port­fo­lio com­pa­nies, or oth­er en­ti­ties whose busi­ness ac­tiv­i­ty con­sists of:

   • Any il­le­gal eco­nom­ic ac­tiv­i­ty (i.e., any pro­duc­tion, trade, or oth­er ac­tiv­i­ty which is il­le­gal un­der the laws or reg­u­la­tions ap­plic­a­ble to the Fund or the rel­e­vant portfo­lio com­pa­ny);
   • The pro­duc­tion of, and trade in, to­bac­co, dis­tilled al­co­holic bev­er­ages, and re­lat­ed prod­ucts;
   • The fi­nanc­ing and pro­duc­tion of, and trade in, weapons and am­mu­nition of any kind;
   • Pornography;
   • The re­search, de­vel­op­ment, or tech­ni­cal ap­plications re­lat­ing to electron­ic data pro­grams or so­lu­tions, which are in­tend­ed to en­able to either il­legal­ly en­ter into elec­tron­ic data net­works or down­load elec­tron­ic data.

In­vest­ment strat­e­gy
The Fund will con­duct in­vest­ments in port­fo­lio com­pa­nies from all sec­tors with inno­va­tion ca­pac­i­ty and growth po­ten­tial, in­clud­ing en­ti­ties ac­tive in the dis­tributed ledger, blockchain, or sim­i­lar sec­tors. As such, in­vest­ments are ex­pect­ed to be spread across var­i­ous eco­nom­ic ac­tiv­i­ties. The Fund in­tends to make its ini­tial invest­ments pri­mar­i­ly in the pre-seed and seed stages.

The Fund’s ESG ap­proach (i.e., its in­vest­ment ex­clu­sions) com­pris­es part of its in­vest­ment strat­e­gy, which is con­sis­tent­ly ap­plied for every port­fo­lio com­pa­ny invest­ment. Good gov­er­nance prac­tices are mon­i­tored through an in­for­mal process as ap­pro­pri­ate in light of the cir­cum­stances of each in­di­vid­ual case as part of every due dili­gence.

Pro­por­tion of in­vest­ments
The Fund in­vests ful­ly in line with its in­vest­ment strat­e­gy and in­vest­ment re­strictions. The Fund does not in­tend to make any in­vest­ments that are not aligned with its en­vi­ron­men­tal or so­cial char­ac­ter­is­tics (i.e., its in­vest­ment ex­clu­sions).

Mon­i­tor­ing of en­vi­ron­men­tal or so­cial char­ac­ter­istics
The Fund has in­creased aware­ness of the im­pact of sus­tain­abil­i­ty risks on risk manage­ment and, thus, on the val­ue po­ten­tial of in­vest­ments. The Fund con­sults with the com­pa­nies on an ad-hoc ba­sis and will car­ry out fur­ther checks if there are in­dica­tions of po­ten­tial is­sues with the Fund’s ex­clu­sion cri­te­ria. There­fore, the Fund mon­i­tors com­pli­ance with the ESG re­quire­ments on an on­go­ing ba­sis. Ex­ter­nal mon­i­tor­ing mech­a­nisms are not pro­vid­ed.

Cur­rent­ly, the Fund ap­plies qual­i­ta­tive as­sess­ments con­cern­ing en­vi­ron­men­tal or so­cial char­ac­ter­is­tics. The Fund con­ducts its ini­tial as­sess­ment in the course of its due dili­gence. The Fund’s due dili­gence is con­duct­ed through an in­for­mal process as ap­pro­pri­ate in light of the cir­cum­stances of each in­di­vid­ual case that the Fund asks its port­fo­lio com­pa­nies to com­plete.

Data sources and pro­cess­ing
In­for­ma­tion is ob­tained from the re­spec­tive port­fo­lio com­pa­nies. An ex­ter­nal review or ver­i­fi­ca­tion of the in­for­ma­tion ob­tained will only be car­ried out if mis­rep­resen­ta­tions are sus­pect­ed.

Lim­i­ta­tions to method­olo­gies and data
The in­for­ma­tion col­lect­ed from the port­fo­lio com­pa­nies as part of the due diligence on be­half of the Fund is ex­ter­nal­ly ver­i­fied only if, and to the ex­tent, mis­repre­sen­ta­tions are sus­pect­ed. Thus, it can­not be ruled out com­plete­ly that false in­forma­tion may re­main un­de­tect­ed in cer­tain cas­es. As the Fund’s in­vest­ment is made for sev­er­al years, the Fund con­sid­ers it a pri­or­i­ty to es­tab­lish and main­tain a trust­ful work­ing re­la­tion­ship with the Fund’s port­fo­lio com­pa­nies to en­sure com­pli­ance with the re­stric­tions de­scribed in this sec­tion.

Due di­li­gen­ce
An ini­tial as­sess­ment of how an in­vest­ment re­lates to the afore­men­tioned char­acter­is­tics is car­ried out as part of the due dili­gence process through an in­for­mal process as ap­pro­pri­ate in light of the cir­cum­stances of each in­di­vid­ual case. As a rule, pure­ly qual­i­ta­tive state­ments of an eco­log­i­cal or so­cial na­ture or re­lat­ing to cor­po­rate gov­er­nance are re­quest­ed from the port­fo­lio com­pa­nies and then tak­en into ac­count in the in­vest­ment de­ci­sion-mak­ing process.

En­ga­ge­ment po­li­cies
The Fund de­cides at its sole dis­cre­tion whether or not to make an in­vest­ment based on prin­ci­pal ad­verse im­pacts on sus­tain­abil­i­ty fac­tors and may in­clude risk mit­i­ga­tion mea­sures where ap­pro­pri­ate.