Inside look into AlgoDAO incubation process
A few weeks ago, we published “What Are Incubators and Why Does Algorand Need One?” In that post, we discussed how startups that go through incubators typically have better chances of success than startups that do not, and how AlgoDAO supports projects launching on AlgoDAO with incubation services to improve their odds of success.
Today, we are digging deeper into the conversation to shed light on how the incubation process at AlgoDAO works and how exactly it sets up the projects launching in AlgoDAO for success. If you did not read the “What Are Incubators…?” please click here to quickly catch up on the conversation.
The incubation process on AlgoDAO
The incubation period for projects launching on AlgoDAO refers to the early-stage period where AlgoDAO’s community supports projects that are getting ready to launch. The incubation period also includes a vetting process powered by AlgoDAO’s access-control mechanism to ensure that only high-quality projects make it to the launchpad.
AlgoDAO’s incubation process takes the projects through some distinct stages, namely: Project Proposal, Project Selection, Due Diligence, Incubation, Signing-Off, Primary Market Funding, and IDO. Now let’s look at each of the incubation stages in detail.
Project proposal
The first stage of AlgoDAO’s incubation process is Project Proposal. This stage typically starts as a community-led activity where AlgoDAO members in the Vanguard and High Council tiers can propose a project for incubation through the dedicated channels in the community forum or on the Discord server.
Alternatively, project creators may also nominate themselves for consideration by applying for incubation on AlgoDAO.
Project selection
The second stage of AlgoDAO’s incubation process is Project Selection. At this stage, the Vanguard is responsible for examining proposed projects and selecting the ones that will proceed to the next phase. During project selection, the rest of the AlgoDAO community signals their support for projects in the form of votes and Vanguard considers the community votes as well as some other preference parameters to select projects for due diligence.
The selection process takes into consideration inputs from the community, but Vanguard has a responsibility to consider the quality of the project, timing, and market conditions; among other factors. Therefore, the Vanguard exercises its discretion in selecting projects and it is not obligated to select all projects that the community proposes.
Due diligence
The third stage of the incubator process is Due Diligence. At this stage, the project must satisfy beyond reasonable doubt its potential to contribute positively to the growth and success of the Algorand ecosystem. During the due diligence stage, the project provides more information about the idea, motivations, team, technology, tokenomics, etc.
The due diligence stage gives ample opportunity to ensure that only high quality projects are incubated on AlgoDAO and presented to the community.
Incubation
For projects that successfully scaled through the Due Diligence stage, the actual Incubation phase kicks off in earnest. During the incubation stage, the project sets milestones and roadmap benchmarks across technology, community building and engagement, marketing, ecosystem relationships, and core product development.
In the incubation phase, the Vanguard works closely with the team facilitating introductions, providing guidance and, sometimes, rolling up their sleeves to chime in. The main goal of the incubation phase is to ensure that the project achieves the milestones and benchmarks set.
Signing-off
Once the incubation stage is completed, the project proceeds to the Signing-Off phase. In this stage, Vanguard signs-off that the incubation is successful and that the project can proceed to the token issuance process.
All projects launching through AlgoDAO have a special contract that issues the tokens. Unless the Vanguard signs-off on the project after incubation, the contracts will not be activated. However, once Vanguard signs-off, the contracts are activated and the issuance of the token begins.
Primary market funding
The sixth stage of the incubation process is the Primary Market Funding round. At this stage, the project starts its Seed and Private funding rounds. AlgoDAO members who belong to the Vanguard and High Council membership tiers get to participate in the rounds. Other AlgoDAO members in the Federation tier who would like to participate in the primary market funding round can combine their $ADAO stake to collectively join the High Council.
Participants in the primary market funding round take on more risks than participants in the later stages. Hence, the token price during the primary market funding stage is offered at a lower rate than the token price in subsequent rounds. Read our post on AlgoDAO’s DAO structure for more information on the different tiers of participation within AlgoDAO.
IDO
The last and final stage of AlgoDAO’s incubation process is the IDO (Initial Dex Offering) round. In the IDO phase, the funding round for the project is open to retail audiences for participation. AlgoDAO members in the Federation tier get to participate in early-stage funding for high-quality projects being built for Algorand before such projects eventually become available on secondary markets such as exchanges.
Get ready to support projects being built for Algorand
AlgoDAO is enabling builders to access support and funding at scale. If you are building and intending to build on Algorand, AlgoDAO is for you. And if you are associated with the wider Algorand community, you should join us as we collectively empower builders within the Algorand ecosystem.
Connect with us on our social media platforms and online community channels.
- LinkedIn: https://www.linkedin.com/company/algodao-fi
- Discord: https://discord.gg/algodao
- Telegram group: https://t.me/AlgoDAOCommunity
- Telegram announcements: https://t.me/AlgoDAOAnnouncement
- Twitter: https://twitter.com/AlgoDAO_fi
- Medium: https://medium.com/@AlgoDAO.fi
