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The VC of the Future

December 3, 2021

I've been mulling over the idea of how a pure DAO VC could look. The idea is very appealing to me. The main thing is having a decentralized organization that invests in other decentralized organizations. Here are some ways I'm thinking it would work:

Everyone can buy in. You would hold a token and through that, you would be an investor in all of the DAO's current and future investments. Importantly, everyone could hold this token, compared to old-school VCs that are limited to only a few (High-Net-Worth Individuals, as they are called in the industry). This is a tremendous benefit, creating a new analog of an old industry but where everyone can participate.

Everyone can participate in decision-making in some way. I'm not sure what the best way would be for this to work well, but I think it makes sense to have an investment/divestment decision-making structure that is based on i) ownership size and ii) merit of the individual. This means a structure where all voices are heard, but not all voices are equal since they are based on reputation.

If you want to invest in long-term projects, the organization itself should be long-term. I think a DAO of this sort should have some sort of lock-in to foster long-term thinking. If it's impossible to sell your tokens within, say 12 months after you bought them, you're not going to be in it for the short term.

I've seen a few projects doing things in this space, e.g. Metacartel, DAOVentures and Stacker. They all seem to be on to something really promising, but they don't quite seem to be working the way I outline it above.

I'd love to hear thoughts on this, so if you have something to add or someone I should get in touch with please, as always, feel free to reach out to me on Twitter or at hi@fremolian.com.