Reflecting on a Year of Komorebi DAO

We recently celebrated Komorebi DAO’s one-year anniversary and wanted to use it as an opportunity to revisit our mission and values, share a snapshot of what we have accomplished in our first year of operation, and tease what we have in store.

An overarching ethos of crypto is to serve and equalize access to financial and non-financial applications and opportunities across all segments of the global population. We believe this begins with backing founders that represent the diverse group of people we are building for. Komorebi’s mission, specifically, is to level the playing field for female and non-binary founders in crypto, while applying the same rigor to evaluating investment opportunities.

While women only receive 2% of venture capital funding, 14% of unicorns are woman-led. Research from Mass Challenge and BCG also found that female-run businesses generate about twice as much revenue per dollar invested. A separate study found that businesses led by female CEOs in the Fortune 1000 generated three times the returns of the S&P 500 between 2002 to 2014. Not surprisingly, backing female founders has proven to be fruitful.

Another disparity that has existed in the venture landscape historically is the ratio of female to male check writers at venture funds. In 2021, only ~15% of general partners (GPs) at U.S. based venture capital firms were female. This imbalance is important to address, given female check writers are twice as likely to back female founder-led startups and three times as likely to back companies with female CEOs.

Incrementally, access to venture opportunities and venture-based returns has historically been enjoyed by an exclusive minority. By structuring Komorebi as a DAO and building a more diverse member base, we seek to change that.

A key advantage to founders receiving investment from a DAO is access to multiple angel investors. Founders can benefit from receiving support from multiple angels with diverse backgrounds and skillsets but often struggle to make room for everyone on their cap table. By partnering with a DAO like Komorebi, founders get access to more than 40 angels that are experts in their own niche.

Given the lack of systemic and deep-rooted imbalances within the crypto industry, we have a unique opportunity to shape a founding and funding culture that gets ahead of disparities prevalent in other industries and facilitates a flywheel:

An increase in female check writers leads to a more diverse set of founders funded. A more diverse set of founders leading teams results in a more diverse base of talent hired. And a diversity in talent lends to the creation of diverse tools and applications needed to serve a global population. But it requires being intentional.

There has certainly been a great focus on increasing the diversity of talent and users in crypto over the past few years. However, the total investment into categories such as female and non-binary led crypto startups remains low. We believe this gap is necessary to address to sustain the flywheel we describe above and is ultimately what led to the creation of Komorebi, an investment DAO that brings together a group of members across disciplines, roles, and geographies to invest in and support companies and projects led by exceptional female and non-binary founders.

Our Deal Flow & Investments

Since launching, the Komorebi team has busted the myth that there is a lack of female and non-binary founders building in crypto. Over the last year, the core team has talked to over 150 female and non-binary founding teams spanning all major categories (including DeFi, NFTs, DAOs, Infrastructure) and ecosystems (Ethereum, Solana, Polygon, etc.).

We have deployed almost $500K across seven projects that fall within the three largest categories pictured above — defi, NFTs, infrastructure. Our investments consist of Apricot Finance, Goodghosting, Eve Wealth, Startupy, FormFunction, Slik, and Entropy.

Our Learnings

In running Komorebi for a little over a year, certain aspects in how we’ve structured the DAO have helped us establish a solid foundation to continue building on. These include enhanced transparency to harness the wisdom of the crowds, offering flexibility to facilitate professional and financial growth, differentiating ourselves through our community, and letting leaders emerge to enable greater fulfillment and ownership.

Benefits of enhanced transparency

Early on, we made the decision to provide DAO members with enhanced, real-time transparency into our sourcing and investment process to better align interests and leverage the expertise of the broader DAO in making investment decisions. Komorebi has a core team of seven members, which is responsible for meeting founders, conducting research and diligence, and sharing investments with DAO members who vote on the opportunity based on our diligence.

The broader set of DAO members can track our investment process in real-time, before **official votes take place. All members have access to detailed information and can share feedback, questions, or concerns. As examples, members have entered prospect discords during due diligence to ask founders technical questions and share their takeaways with the core team. We also have members who share input directly within our deal tracker on deals that fall within their area(s) of focus.

In addition to intentionally increasing transparency off chain, the custody and movement of funds is auditable on-chain, which allows DAO members to hold the core team accountable and minimizes the complexity and cost of establishing trust.

Professional and financial flexibility

Each member in Komorebi holds a full time role in the industry. As such, most members don’t have the bandwidth to launch and operate a separate business or venture fund concurrently. Komorebi allows members to maintain their primary roles while also giving them the opportunity to build and operate a distributed organization and make venture investments together with a team that consists of members with diverse backgrounds and skill sets.

Additionally, the minimum capital requirement to join Komorebi is significantly lower than is typical when operating a venture fund as a GP or investing in a venture portfolio as an LP. The low minimum check size expands participation and lowers the barrier to accessing venture opportunities for the core team and DAO members alike.

Community as our greatest strength

Our community comprises the core team, DAO members, founders in our portfolio, and founders outside of our portfolio that we admire. It is our greatest strength. Because of our community we have sourced and invested in competitive deals, brought founders the connections and support they need through the DAO and its network, and leveraged the expertise of DAO members (who have prior experience building, operating, and investing) to build Komorebi to be a lasting organization.

One way we harness the power of our community is through regular checkpoints we host (generally quarterly and ad hoc as needed). We reserve a segment to discuss requests from the core team and portfolio founders seeking to tap into our set of DAO members for guidance. Members provide feedback and volunteer to workshop technical, legal, operational or other more specific questions in consideration with us and our founders.

Leadership to foster agility and ownership

Lack of structure or leadership plagues many DAOs that suffer from inertia. Komorebi would be at a standstill if each core team member had to work and sign off on each task at hand or if each DAO member had to engage in each phase of an investment decision.

To avoid stagnation, we have implemented levels of participation, notably between the core team and DAO members. Additionally, each task is spearheaded by a core team member who seeks out resources and support as needed but assumes responsibility to see it to completion. As we geared up to launch the Komorebi v2 process, individual members volunteered to lead particular tasks depending on their bandwidth and expertise.

By allowing leaders to emerge naturally in this way, members also feel a sense of ownership as they accomplish tasks with which they have been entrusted. This gives rise to teams with members that are individually and collectively fulfilled.

What’s Next

We have taken the last few months to reflect on Komorebi v1 and prepare for Komorebi v2. Much of v1 was focused on setting up durable processes and operations, sourcing and diligencing opportunities, and building the Komorebi community.

We have established a solid foundation and are excited to have the flexibility to be more experimental and deliberate in how we incentivize, recognize, and compensate our community to amplify Komorebi’s impact on funding and nurturing female and non-binary crypto founders.

In preparation for v2, we have expanded the core team to include Clara Bullrich, Justine Humenansky, Ellie Cornell, Susan Wang, and myself, Ria Bhutoria. If our mission resonates with you and you’d like to get involved, we’d love to connect!