Orbital is a deep tech startup launched by two aerospace engineers within the Nova Labs Incubator in Milan. Using the FlexUp platform, they structured their project with a clear governance model and a flexible remuneration system—allocating contributions as firm, flex, or credit.
With limited initial funding, they formalized their commitments, aligned incentives, and tracked equity through tokens, all without heavy legal overhead. As they progress toward grants and private investment, they’re now ready to convert their subaccount into a standalone legal entity—ensuring full ownership of their startup with just a few clicks.
🔎 Highlights
- Type: 🧪Simulated case study
- Country: Italy
- Project type: Deep tech startup
- Team size: 2 – Co-founders
- Associates: 3 – Incubator, 2 co-founders
- Legal structure: Subaccount under an incubator's legal
Context
Lorenzo is the CEO of Nova Labs, an hardware innovation incubator based in Milan, Italy. One of the projects hosted by the incubator is Orbital, a new startup developing high-precision orbital sensors. Orbital was founded by Giorgio and Roberto, two aerospace engineers with research backgrounds and a bold vision for transforming Earth observation.
While the project has strong technological potential, it is still at the prototype stage and has limited funding. Nova Labs believes in the team's capacity and decides to incubate Orbital under its structure, using FlexUp to formalize the collaboration and ensure transparency and alignment between all parties while keeping the admin paperwork to a minimium.
Giorgio and Roberto are not yet salaried but are dedicating most of their time to the venture. Lorenzo wants to ensure they are fairly rewarded for their efforts, even in this early, pre-revenue phase.
Deal Structure
The project is set up in the FlexUp app as the Orbital account, a subaccount under the Nova Labs Incubator account, which is the main Legal Entity. A FlexUp Charter is created for the Orbital project, setting out the governance and financial rules under the FlexUp Economic Model.
Participants:
- Nova Labs Incubator: Incubation support and initial funding (10,000 €).
- Giorgio Co-Founder: Software engineering and business development.
- Roberto Co-Founder: Electrical engineering and operations.
Remuneration & Commitments:
Each co-founder agrees to a monthly compensation of 5,000 €.
- Giorgio still lives with his parents, so he does not need money right now. He decides to invest 100% of his remuneration in the project (100% Credit).
- Roberto needs to some money to pay for rent, so the parties agree on this remuneration structure:
- 1,500 € paid in cash (30% Flex),
- 3,500 € invested in the project (70% Credit).
Nova Labs provides 10,000 € of initial funding, plus the various services offered by the incubator (offices, lab space and equipemnt, administrative support, legal hosting). All is invested in Orbital (100% Credit).
This initial cash injection should cover Roberto's firm remuneration for the next 4 months, as well as the expected ~1000 €/month of external costs. A follow up investment of 30,000 € is expected if the team has some things to show for by then end of month 4, which would give them another 12 month of run way at that rate.
Payment structure, risk and tokens
Payment priorities are structured as follows:
- Firm remuneration tranches must be paid monthly in all cases, regardless of profitability – otherwise, the project is in default.
- Credit remuneration tranches are not paid out monthly – instead, they are reinvested into the project and paid back later if surplus cash is available at the end of the year.
Remuneration invested as credit involves a high level of financial risk, since we don't know when that money will actually be paid. In the FlexUp model, we assign a flat-rate risk factor of 80% for credit.
To compensate, each associate receives a number of tokens whose nominal value is equal to the calculated risk. For example, 1,000 € of credits has a risk value of 1,000 € x 80% = 800 €. If the token index is 10 €/token, you would get 80 tokens.
Tokens grant voting rights and a share of any profit distributions.
Outcome
By structuring the venture using FlexUp:
- The co-founders can work full-time on Orbital with confidence that their work is tracked and valued, even without immediate salary, and without having to worry about administrative paperwork.
- The incubator’s contributions are formalized and transparent, based on the actual value of the funds and services provided. This creates trust and alignment with the startup’s success.
- The team benefits from a clear governance model and the ability to attract future partners and funders into a professional, equitable framework.
- As Orbital begins applying for European grants and seeking private funding, its structured setup under FlexUp becomes a strong asset, showcasing professionalism, transparency, and alignment between founders and investors.
As subsidies and investments come in, Giorgio and Roberto will be able to create a dedicated legal structure and seamlessly convert their Orbital subaccount into a legal entity account — all with just a few clicks within the FlexUp app. This allows them to take full legal ownership of their startup without disrupting operations or changing their governance model, and again with minimal paperwork.
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Orbital - Deep tech startup