Venture DAOs
People can coordinate funds, labour, time, and social capital through a distributed autonomous organisation (DAO), which is a cryptonative and remote-first method. DAOs have distributed governance, with all funds and assets controlled on-chain via smart contracts. There is no board of directors, and the organisation has no central control. They manage the soft human-facing layer of crypto, which includes money, social capital, reputation, and attention. They are essentially political tools that offer individuals power based on popular consensus.
Let's look into Venture DAOs, which are groups of people or entities that pool their money and administer it. Everyone participates to sourcing, appraisal, and a rough consensus before execution since they have skin in the game.
MetaCartel Ventures (MCV) is a for-profit DAO established by the MetaCartel community with the goal of investing in early-stage Decentralized Applications (DApps). It has a community-oriented membership structure and provides radical engagement and flexibility that typical "venture capital fund" models cannot match. The members of the DAO will be the DAO's designated investors, sourcing, completing due diligence, proposing, and voting on investments. New member admission is permissioned and curated by members, whereas leaving the DAO is fully permissionless, allowing exiting members to receive their full pro rata portion of the DAO's assets at any moment. The founding members of MCV will be trustworthy Ethereum community creators, builders, investors, and MetaCartel community participants. The DAO's business entity is strongly tied with its smart contracts and token technology distributed on the Ethereum mainnet, and MCV is made up of a code and law coupling. The technological half of MCV will be a Moloch v2 smart contract instance, while the legal half will be a member-managed Delaware limited liability business controlled principally by the Grimoire (the "Limited Liability Company Agreement") and Delaware Limited Liability Company Act provisions. The Zerolaw Augmentation Paper explains the overall theory behind this marriage of blockchain technology with law to augment organisations.
The LAO was founded in the same spirit as The DAO, as a member-directed venture capital fund based in the United States, with the goal of adhering to US law. The LAO, like The DAO, allows its members to pool cash, engage in initiatives, and share in the profits. The LAO is a legal corporation (a Delaware limited liability company) that is mostly managed through an internet application (a "DApp") using smart contracts. The LAO has funded over 30 projects across the Ethereum and blockchain ecosystem since its launch in late April 2020. Funding will be supplied to projects in the form of the cryptocurrency Ether under the criteria described in these FAQs unless the members change their minds. The LAO will be member-managed at its heart, relying on a DApp and related smart contracts to support investments in digital asset initiatives. Unlike The DAO, which was arguably an implicit partnership with little legal protection for members, The LAO's operating agreement clearly limits members' responsibility and any fiduciary obligations among members, to the degree authorised by applicable law in each situation. The LAO will rely on a service provider (initially, OpenLaw) to handle a variety of administrative functions on behalf of its members, such as preparing and sending annual K-1 tax forms, updating and maintaining the DApp, validating information related to projects chosen for investment, and handling other interactions that may arise during the LAO's lifetime (e.g., receiving the proceeds from the sale of securities in fiat and converting them to a digital asset for distribution to members). The service provider will be compensated for these services.
Stacker Ventures is a community-run blockchain technology for launching and managing pooled capital. Stacker Ventures is a decentralised autonomous organisation (DAO) that creates decentralised funds, accelerates venture fund portfolio investments through an engaged community, and provides fund administration with checks and balances. The DAO's first venture fund is a fast-track crypto-native fund that invests in promising startups. In addition to the venture fund, the DAO manages a series of Active Yield Funds that employ DeFi exposure to generate competitive, investment-grade APY. Stacker Ventures is a global community of investors, builders, and early adopters who have come together to fund and support emerging blockchain technologies. We are in the vanguard of a new era in governance as well as open access to early-stage investment opportunities. For early-stage investing, Stacker Ventures provides a flexible and decentralised architecture. Unlike other venture DAOs like Metacartel Ventures and The LAO, Stacker Ventures is an open protocol, an corporation without legal status as a corporation. Operating without a legal structure might pave the way for more decentralized collaborations among DAO members.
Around the world, there is a lot of debate over the legal status and framework of DAOs. It reminds me of the classic debates concerning the legal foundation of corporations as legal personalities. However, companies can be regulated and thus enforced by law, whereas a truly decentralised organisation might not be. Certain platforms (or maybe certain network effects) can opt to subject the network effect to a certain law or jurisdiction, and hence subject DAOs supported by that network effect to that law or jurisdiction to some extent.