What do DAOs mean for founders and investors
DAOs 101
Greg Isenberg, the CEO of Late Checkout (a US-based agency, fund and product studio that designs, creates and acquires community-based products and web3 communities) is so right saying:
Community is the most precious coin of the new Internet era. You may come for the DAO, but you will stay for the community.
A DAO (Decentralized Autonomous Organization) is a digital-native organization that sets a purposeful and community-powered mission for itself, and operates thanks to blockchain smart contracts, in order to secure transparency, governance rules and fair value-sharing, without requiring any central control. As an autonomous organization, a DAO has no owner, no shareholders, no Board, no CEO nor Executive Committee; it is ruled by the propositions and votes of the DAO members. It is no less than a disruptive paradigm shift in managing an organization and opening up a community.
Most DAOs are legally created as Foundations, which are autonomous entities with objectives and processes defined by their Articles of Association. Foundation members can financially contribute to the development of the Foundation projects, and can vote on strategic, governance and community propositions. Execution then is usually entrusted to a supervising team, also chosen by members to work for their common good.
DAOs are thus powerful and diverse by essence. Nowadays, it seems that about everything can be organized as a DAO in full transparency and efficiency.
Where do regulations stand today
DAOs are also by default independent from public and private institutions, like state registers or banks. Such a traditional framework is not technically required anymore for DAOs, as blockchain technologies provide them with a digital existence register (the blockchain itself) and with a crypto-payment capability (a wallet).
As for cryptocurrencies, most financial regulators and central banks around the world still have to define to what extent they can protect against fraud and money laundering, without stunting tech and usage innovation. Accordingly, there are 2 opposite visions in the cryptosphere:
Those who do not wish any kind of regulations and try to avoid them… and those who want to participate in building a favorable digital regulation framework: modern, accommodative, but also prudent.
Blockchain tech is still maturing, and DAOs are even younger, but they both enjoy a clear momentum for the disruptive change and positive ESG impact they can bring. An increasing number of public bodies and jurisdictions are working on blockchain / DAO still-open questions and pushing promising initiatives accordingly.
What does it means for Founders and Investors
For founders, DAOs meet the needs for simplification, funding and scalability that innovative project founders look for.
Of course, tech startup ecosystems made big progress locally and globally in recent years. But innovation dissemination is still too slow and unbalanced, because of the different maturities of these ecosystems, of their unequal capability to source the proper financing, and of the lack of talents locally available.
A decentralized and global ecosystem, which structure and finance DAOs, will help step up to these challenges and accelerate the mass-adoption of innovations, starting with the ones having a positive ESG impact (Environmental, Social, Governance).
For investors, DAOs also meet the needs for transparency, risk management and liquidity that tech investors look for.
Despite more professional business angel networks and incubators / accelerators, despite the explosion of investment dry powder from venture capital funds and other tech investors, early-stage fundamental issues remain: Seed projects success rate is still below 10%, financing lacks out of main innovation cities worldwide, investments have poor liquidity perspectives, average investment returns are challenged by other asset classes.
Private equity and crypto-investment are not necessarily antagonist. With the capability to bring the best of both worlds, a decentralized and global ecosystem, with structure and finance DAOs, will help answer these issues and massively improve cash allocation to innovations, both in quality and in quantity. It will also further democratize access to private equity from investors with little VC experience, boosting the development and the global adoption of tech innovations.
We, the initiators of the Founders DAO ecosystem, indeed believe that the current and future leapfrogs of the Web3, as well as its hype, need some pragmatic, open and inspiring steps forward to reach its game-changing potential.
We also trust that enabling anyone to launch, structure and / or finance a DAO with its community is key to scale Web3 technologies and principles.
We commit ourselves to:
- Develop a global, inclusive and diverse citizens ecosystem of founders builders of Web3 for impact;
- Build the financial and operational infrastructures enabling the emergence of leading decentralized platforms in 2030;
- Guarantee the long-term alignment of stakeholders and sharing of value mainly benefiting their user community.
Let’s build the Web3 together!
For a greater decentralization of our economies, for a broader contribution from and back to our communities, for a positive ESG impact on our societies and our Planet.
🌐Website: https://www.foundersdao.io
🐦Twitter: https://twitter.com/FoundersDAO_
👨🏫LinkedIn: https://www.linkedin.com/company/foundersdao/
💬Discord: Coming Soon!
