Greenfield Capital Management’s Investment in Fancurve: Delaware Court Rules on Enforcing Terms of a SAFE and its Side Letter

A German venture capital firm was the lead investor in a seed round for a sport digital wearables NFT company. The company’s CEO took out a personal loan with the fund proceeds, the NFT market crashed, and the company went insolvent. The VC, along with other investors, sued both the company and its CEO.

In Greenfield One III GMBH & CO. KG, et al. v. Chris Chaney, et al., decided on October 9, 2026, Delaware Vice Chancellor Will dismissed Greenfield’s claims in part and awarded its claims in part.

In late 2021, Greenfield Capital Management (“Greenfield”), a German VC that invests in cryptocurrency and blockchain startups, invested $2.5MM in Fancurve via a Simple Agreement for Future Equity (“SAFE”) in a $4MM round. The parties also executed a side letter which, among other things, gave Greenfield a non-voting board observer right and restricted Fancurve’s use of proceeds to business activities.

During this time, Fancurve’s CEO, President, and sole board member Chris Chaney (“Chaney”), was in deep personal financial distress, with over $2.7MM of high interest personal loans coming due. Shortly after Greenfield’s investment, Chaney transferred over $2.7MM of Fancurve’s operating capital to repay his personal loans, later creating a unanimous board consent which backdated and approved the actions, backed by a promissory note and pledge agreement. The promissory note, which only required Chaney to be 50% personally liable, and for which Chaney himself could waive on behalf of Fancurve as Fancurve’s sole director, was secured by Chaney’s shares in Fancurve, which became worthless. When the NFT market crashed, Chaney went back to Greenfield for more capital, which was rebuffed. The company then wound down operations and Greenfield sued both Fancurve and Chaney.

First, while Fancurve and Chaney defaulted in the suit, the court ruled that Chaney was not personally liable for the obligations under the side letter. The court noted:

The parties could have negotiated additional personal obligations for the founders. They did not. Delaware courts “will not rewrite contracts to read in terms that a sophisticated party could have, but did not, obtain at the bargaining table.”

The court suggested that had Chaney guaranteed Fancurve’s compliance, he could have been personally liable.

The court, however, ruled that Fancurve was in fact liable, and next turned to damages. The “Cash-Out Amount” under the SAFE became relevant, as the waterfall went to debt and preferred shares before SAFEs. However, the court had an understandably difficult time calculating damages. The court remarked:

I find that the business would have failed irrespective of Fancurve’s compliance with the Side Letter. As such, Greenfield’s investment would have yielded a distribution of Fancurve’s remaining assets upon dissolution, rather than value from a continuing business…It does not follow, though, that Greenfield would have lost its entire investment had Fancurve performed. Fancurve’s burn rate and the possibility of a strategic pivot suggest that the diverted capital could have funded continued operations. But the record does not establish with reasonable certainty how much additional capital Fancurve would have spent or how much those expenditures would have reduced Greenfield’s dissolution distribution. The risk of that uncertainty falls on Fancurve. I therefore calculate Greenfield’s distribution as if Fancurve had retained the cash it was prohibited from diverting under Section 1, with no deduction for additional unproven losses.

The court then requested a supplemental submission from the plaintiffs before it could calculate damages.

Here, the lead investor erred in inadequate blocking rights and guarantees, not taking a full board seat, and not requiring more corporate governance of the target (i.e., expanded board, additional officer roles, etc.).

Even if Greenfield “wins,” it has to collect from Fancurve, which will be difficult. The key is not being here in the first place.

Jerome Fogel is a founding partner of Fogel & Potamianos LLP, a firm recognized by Chambers & Partners’ California Spotlight Guide for excellence in corporate law. A partner in the Corporate Practice Group and Chair of the Sports & Entertainment Group, he is known as an innovator and dealmaker in the legal community. He serves as a general counsel to privately held companies with a specialty in mergers and acquisitions.

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