Should MetaCartel be a for-profit VC-DAO structure?

The primary argument in favour is a question of sustainability and attracting the best talent to work for MetaCartel. The primary argument against, is the obvious tsunami or regulatory and legal issues that this presents along with dramatically increased complexity. I understand both sides, but would posit that if you ‘get VC-DAOs’ right, the impact that MetaCartel could have would be significant.

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This is a great suggestion. I realize that in my funding criteria thread I made the claim that our goal isn’t to earn a return and maybe that was a hasty assertion. I think the initial members would likely stand by that but I agree that a profit motive could be a stronger force. My personal preference would be to fund a few projects altruistically but would be open to the idea of having the same group transition to a for profit model if we can find a good way of doing so.

Hey,

I’m pretty keen to work through ideas on for-profit structures. I worked on implementing scout fund structures in an Angel fund, it didn’t need any dao solution as members were close to one another but worked very well for funding token projects.

I’m not a member of metacartel dao currently, I initially wanted to join as I thought it would be for-profit. I’m still on the fence on applying for a pure funding dao.

My main arguments for supporting for-profit models, is that I believe a large amount of capital is needed to scale distribution/marketing of any experiments that work, and it will only be possible to attract this capital with a for-profit model.

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@James_RT this feedback is interesting. Do you have a proposed structure or set of principals that you would want to see in a for-profit DAO?

I like this approach. Taking the altruistic funding model to start with and then opening a discussion on how it evolves into a more sustainable model. Certainly no rush here.

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+1 to the eventual creation of a for profit DAO.

Perhaps even that we have another DAO entirely for profit. Growth DAO? The ‘series A’ followup to MetaCartel DAO seed grant.

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Thanks for starting the thread @rzurrer… feels like there is plenty of fresh tilled soil to introduce a new Rev Gen DAO. I also consider DAOs as inevitably being a new form of regulated ICO (DAICO) that will begin popping up in the next 6-12 months.

We’re in th experimentation phase, and I imagine there will be many derivatives of DAO-based organizations and collaborations.

I’m pro DAOs with specified purpose. Recreating the ambition of the original DAO at a smaller, specified scale seems to provide the possibility of coming to a legal decision more quickly in the near term. This is where the APPDAO concept came from: https://link.medium.com/sUmEzUd5vY (this is just a proposed narrative, it isnt fully fleshed and can take many alternate routes).

Our team at Abridged is working with a number of others to evaluate how quickly we could launch one of these for some of the side products being built with fully parsed legal arguments/structures using a US LLC wrapper. Low estimate ~1.5 mo.

At the same time, there should definitely be an investigation into a DAO more broadly focused on becoming a VC to potentially invest into these smaller DAOs that are managing and coordinating revenue flow and budgeting for remote, international teams building specific projects. Further, defining legal wrappers in other jurisdictions (Berlin, Brussels, Malta, Singapore, Lisbon…) will be critical to providing more robust opportunities for DAO communities to form.

Excited to continue this discussion. May be worth the MCDAO community to consider funding some of the work needing to be accomplished (legal/technical) to spur on new experiments/designs. Can’t wait to break ground :metal:

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I like the idea of on-chain profit shares, it fits in nicely with the apps that build on top of the protocol layers (for example trading interfaces on 0x or dydx, prediction markets on augur) fees can be added on and a proportion of profits can be distributed back into the DAO

@OKDuncan is definitely much further ahead than me in his thinking on this, I will read up on the concepts he mentioned and come back with some more ideas

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I recently started working on “The DAOfund”: https://docs.google.com/document/d/18tHFcfyRRMazzTWu-TvoJR19NjCG1YEUhZlgLkbaEZs/edit#

Would love to collaborate / get feedback from those interested in the space!

Wanted to write only “Yes.”, but it gave me “Post must be at least 20 characters”…
Yes, because sustainability and attracting capital and talent.
There should still be a non-profit grants program though.
Also a mechanism that gives first rights or some other benefits to people inside the for-profit one that also gave the money away through a grant?

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Thanks for the inspiration Ryan & @James_RT … I wrote this post that summarizes my proposal(s) for a hybrid for/non-profit model. Let me know if it makes sense! :slight_smile:

Really looking forward. I have a project in Puerto Rico currently, which is a real estate property that was abandoned by the US government 14 years ago and friends of mine had access to the deal decided to lease it for the next 40 years. The project is located in Ceiba a 40 min from San Juan and it has already built 152 units which need maintenance.

They brought me onboard and now I came up with the idea of having a coworking/coliving space for digital nomads and with a governance model on top of it. The idea is to have 10-15% of the rooms for free and the people staying in the coworking/coliving could decide who are those people that could stay for free.

They’ll pay back to the community with the value that they bring to the ecosystem.

I’d love to explore more ideas as this place could be a testing ground and my friends are willing to try something cool out.

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I feel a little conflicted on this because while, yes profit driven incentives would drive resources to a DAO, I don’t think what the world needs is a another Venture Fund. This is coming from someone that has worked in venture. Because Silicon Valley is so flood with cash with so many different venture funds popping up, a lot of them bet on shallow, predictable businesses that aren’t innovating much, but still producing a great return. It would be tragic to see that happening here. A lot of the ICO groups from 2017 were kinda like a VC DAO.

Point being, there should be some second degree of incentive alignment outside of profit for such a VC funding DAO to work. Whats cool about Moloch, from a theoretical perspective, is that because they investing into the DAO with ETH, and investing into project that benefit the ETH ecosystem, theoretically they should be earning a return through their grants through ETH appreciation. Assuming the members of Moloch hold ETH. Maybe what would be interesting would be investing in a project with a put option to buy the same amount of ETH from them in the future.

@puniaviision

How many venture funds out there are funding dapps and taking real chances to fund the decentralized web?

Do you think silicon valley would fund the Web 3.0 vision?

I believe in taking control of our own charter and forging a path that would otherwise not naturally exist. I believe DAOs will unlock a significant amount of capital and funding in the space for the application layer of Ethereum.

I’m not sure about the precise amount of Venture Funds that are Web3 friendly, but its apparent that the amount of capital to fund Web3 projects and DApps far exceeds fundable projects in the ecosystem. Draper Associates, where I worked, definitely was. Paradigm capital itself is a billion dollar crypto focused fund. A16Z just launched a crypto startup school. This is probably why a lot of blockchain/DApp startups are raising at insane valuations because the VCs have to fund something in order to justify management fees.

The good projects that you don’t see get funded typically don’t get funded because there is no solid way to access a return. But that fundamental problem doesn’t change if you switch the structure to a DAO. Perhaps there’s value in being a smaller fund, investing earlier, and not chasing massive returns, and having the social alignment of not being a traditional VC.

You have to take into account the cost of everyone else free riding on the grants you give out. There needs to be some sort of incentive alignment stronger than simple eth appreciation that everyone will benefit from, even without contributing to moloch, otherwise it will hardly be sustainable.

Precisely. Web3 investors are still playing at a web2 game. Web2 business models, web2 projections and expectations. I believe we will see a lot of companies, products, and DAOs in the space become highly profitable via web3 native business models in which we are still building and experimenting on.

Crypto is a different ball game

I think there’s a few issues with the current VC landscape that leads to good projects being underfunded.

  1. Massive funds don’t want to write small checks and therefore aren’t supporting early stage funding. Costs of doing a crypto startup are much higher so the startups are getting choked off before getting to the traction stage where they can raise larger rounds.

  2. Lack of conviction that founders will be able to discover business models that produce returns. Maybe there is belief that blockchain fully disintermediates the application layer or they find founders to not be profit/upside driven.

  3. Lack of conviction about blockchain (d)application layer at all. Some think its not currently possible with given tech, or that there is no viable use case beyond speculation and trading.

I think VC DAO avoids these issues by coordinating a group of people that have strong conviction around the (d)application layer, possibility of finding business models, and having a smaller AUM focused on early stage.

VC DAO just needs to have conviction, and long term thinking with long term people.

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I like your points the most.

Even though I am still skeptical of the idea of VC DAO’s, what you’ve described rings true to what I have seen. Although it is changing with Crypto Startup School by A16Z and all that.

As a caveat, it does sound like the problems you are describing are on of attitude, and not one of value coordination and governance. Not a problem specifically suited for DAOs to solve.

Ah yes - I do think it will be solved with a DAO simply because of the community ethos.

People who have the right attitude to support early stage Ethereum projects either don’t have the funds to write larger checks or just don’t want to engage in the traditional way that VCs engage.

I think that a VC DAO solves the problem by allowing many smaller investors to contribute and also allowing whales to contribute in the Ethereum way.

DAOs also have the potential to solve the application layer value capture problem, which also makes it easier to invest in early stage products.

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