SG 0.3a - Commercialization Squad

[EliMo]

Summary

This proposal establishes an internal independent working group within VitaDAO. It describes the Group’s purpose, goals, and rationale for its activities. This proposal does not seek the creation of new salaried positions in addition to the ones the DAO is already hiring for.

PLEASE NOTE:

1. When we talk about token utility, we mean the utility value of the token to the DAO members, e.g. qualifying for partner discounts, access to services, etc. It does not refer to the monetary value of the token. It also does not purport to change the token to a “utility token” from a governance token. That’s not only impossible without a community vote, it would be irrational to do so.
2. When talking about accelerating research assets, we are not talking about profits. We are emphasizing that sustainability of the treasury must be reached without depending purely on donations and strategic investors.

Relevance to the 2023 Strategic Plan and Seasonal Governance Goals

This proposal aims to directly address major aspects of the following goals from the VitaDAO 2023 Strategic Plan:

1. Increase Token Utility Value
2. Liquify Research Assets

This proposal also directly addresses the Seasonal Governance goal 0.3 - Accelerate Research Assets.

This document proposes a concrete strategy to achieve these goals by founding the Commercialization Squad, an independent working group within VitaDAO. The goals of the group are specific and measurable, making tracking achievements possible.

Achievement of the Squad’s goals also indirectly positively affects increasing community size as well as increasing brand awareness, which are key goals in the 2023 Strategic Plan as well.

Motivation

Background: How VitaDAO Operates
VitaDAO funds researchers, research labs, early-stage startups, and projects in the longevity space. Projects are sourced, sometimes incubated, and significant efforts are put into evaluation. Usually, such vetted longevity research projects will request funds from VitaDAO, and members will vote to grant or raise those funds in exchange for ownership in part of the resulting IP or other assets, or in some cases equity.

To increase the value of its treasury, VitaDAO’s original plan mentions licensing or selling the DAO’s IP or data to industry stakeholders, such as pharmaceutical or biotech companies, and allows the possibility of bringing these assets to market itself, provided enough liquidity and governance sophistication exists.

The $VITA token is a central component of the VitaDAO ecosystem. $VITA tokens grant rights to participate in decision-making within the DAO. The token grants no ownership of IP to the token holder. Instead, it grants full governance rights. As a governance token, its economy has not been optimized to lead to its increase in value. Rather, $VITA follows the sustainability loop principle: in theory, as R&D projects receive funds and begin producing data, VitaDAO’s IP value grows with positive research results, and the proceeds flow back to the treasury. The value of this principle applied by the DAO, however, needs to be recognized by the market.

The value and utility of $VITA is important for another reason in addition to its role in governance. Until VitaDAO is able to achieve a significant exit, i.e. by selling the equity or licensing the IP acquired by funding a project, it may have to rely on raising funding by selling $VITA. Given the projects funded by VitaDAO so far are very early stage, it’s safe to assume a significant exit may be years away.

There are currently limited strategies in place to increase the treasury’s value. The current tokenomics strategy excludes investment speculation with community funds to minimize risk. In order to achieve its goals, VitaDAO currently relies heavily on community and Strategic Member funding.

VitaDAO’s community has gained significant experience in the last two years of pursuing its mission, and the need has arisen to design more sophisticated management instruments for several elements of its operations, including the role of $VITA in the larger longevity ecosystem as well as the pre- and post-funding relationship with projects VitaDAO funds.

Learnings and needs

The list below focuses on commercial, financial, and market-oriented learnings from the VitaDAO community in the last two years. It’s non-exhaustive.

      1. Financial sustainability

a. IP-NFTs are not yet as broadly accepted nor established in the biotech and longevity funding space as, for example, royalty or equity agreements. There is a clear utility for academic collaborations. Significant effort and time investment in the popularization of IP-NFTs may be needed in order to reach VitaDAO’s goals, should they continue to keep the concept of IP-NFTs at its center.

b. As expected for biotech projects, return on investments may need years to be realized. VitaDAO’s financing strategy may not be able to depend purely on Strategic Members and community financing for an extended period of time, given market instability and the need to prove (i.e. show success metrics) the community can achieve financial ROI and become a self-sustainable organization.

c. Many of the founders VitaDAO meets and decides to finance are running very early-stage projects or startups. They may not have formed the founding team, may be specialized scientists with little business/funding experience, and thus may need hands-on assistance in many of the aspects that increase the chances of raising financing rounds.

d. Some aspects of project sourcing, evaluation, and financing need to be strengthened. There is currently a vacancy for a venture associate and other positions within the dealflow area, but more formal positions may be needed.

e. The current tokenomics strategy is risk-averse and in line with the DAO’s values. However, it has been recognized that the potential for $VITA lies beyond purely being used for the DAO’s governance purposes. Popularization of $VITA may affect the DAO’s treasury directly by increasing membership, trading activity, etc. Any token uses beyond governance, however, need to be reviewed and approved by the Legal squad.

      2. Popularization of VitaDAO, $VITA, IP-NFTs

a. VitaDAO is becoming a more important and recognizable player in the longevity space with each financed project.

b. There is a yet unexploited potential for $VITA to play a role in the space, such as becoming “in-game currency” for longevity-related apps, products, and systems. While preserving the risk-averse tokenomics approach and having in mind the original governance design of the token, a stronger role of $VITA in the space may enable VitaDAO to offer membership benefits to its community, popularize the DAO and IP-NFTs, and accelerate the achievement of its goals.

Specification

The Vita Commercialization Squad

A small group of dedicated, experienced people can address all of the needs listed above. This Squad acts as an independent pod or working group within the DAO, ensuring agility, focus, and accountability.

It functions based on a yearly Plan it submits to the Stewards; the community then votes to approve it. The Plan is designed to clearly describe the Squad’s objectives, activities, and most importantly, how the achievement of the objectives will be measured as well as how the Squad generates value and revenues for VitaDAO (see below section on Outcome-Based rewards). The plan details the Squad’s budget and planned expenses.

The Squad is an internal service provider to the DAO’s working groups, within the constraints of its Plan.

Given the fact the Squad’s work is financed by the DAO, ensuring accountability is of utmost importance. The Squad prepares reports and presents its work to the community as necessary, and at the very least bi-yearly. Achievement of the Squad’s metrics established in the Plan directly affects the Squad member’s compensation. The Stewards oversee the achievement of the Squad’s objectives and hold the Squad members accountable.

      **1. Goals of the Squad**

1. Increase the likelihood of commercial success for the projects VitaDAO finances according to pre-agreed metrics and goals

2. Assist project teams pre- and post-financing with administrative, fundraising, operational and strategic planning needs; in some cases serving as fractional CEO, CFO, COO, or advisor, and creating a Venture Studio-like environment as needed

3. Generate value and revenues for VitaDAO (see below section on Outcome-Based rewards)

4. Establish projects’ needs for scientific assistance (e.g. SIR) and source candidates from within VitaDAO and the broad community

5. Active promotion of the DAO with TTOs and projects in line with the relevant policies (which are subject to change), as updated

6. Detailed design and active implementation of the DTT concept as prioritized by the DAO

7. Establish $VITA as the “longevity token” through aggressive business development with companies and projects in the sector, especially focusing on its use as “in-game currency” for relevant apps and systems, with a detailed sales plan with measurable metrics

8. Design and proposal of other uses of $VITA to increase benefits to its holders and VitaDAO and its members; coordinates such activities with the Coordination WG and specifically those members working on tokenomics

    **2. Team**
   

The Squad is led by the Builder. The Builder is an entrepreneur-in-residence with a startup mentality and approach to work. The Builder understands VitaDAO is a relatively early-stage startup, and that his/her job description includes wearing multiple hats as necessary. The Builder proposes the Squad’s yearly plan, hires group members, and is responsible for the achievement of the Goals of the Squad.

The Builder may fully or partially perform the EIR role (job description as currently published here) and can be hired from the currently advertised positions. In addition, the Builder:

1. Serves as the first point of contact representing VitaDAO for projects post-financing, unless deemed otherwise by the Stewards

2. Builds relationships with researchers, operators in the aging & longevity space as VitaDAO’s representative

3. Takes on the CEO/CFO/COO mantle at portfolio companies as needed and speaks about the company products and research with founder-level knowledge

4. Designs and proposes uses of $VITA to increase benefits to the VitaDAO community; serves as a business developer with companies in the field

The Builder may hire for other positions, as described in the Squad’s yearly plan and within the community-approved budget.

Community members may act as a broader support team for the Squad as projects necessitate.

Outcome-based Rewards

The Squad must generate tangible, measurable value for VitaDAO. Whether these are in the form of successful integration of $VITA by companies in the longevity field, or in the form of equity, data, or IP in any form in exchange for the assistance provided to projects the DAO finances, creating revenues is at the heart of the Squad’s mission.

The Squad’s members’ are rewarded subject to the VitaDAO compensation policy (VDP 72 as of this time). The parts especially relevant to the Squad are the Compensation Framework (Part II) and Appendix D (Tech and Product Contributor Compensation).

In some cases where this is possible and legally permissible, and with the permission of the company/project legal representative, the DAO may offer a fraction of equity, data or IP as supplementary compensation to the Squad’s members involved in a company-building project.

Project Lead: Eli Mo

Budget

Yearly budget

The Squad’s yearly budget is proposed in their Plan, and reviewed every six months based on the achievement of the Squad’s metrics, except in the first year when it is reviewed every four months. Should either the reviewers or the Builder propose the altering of the Squad’s budget after the review or at any point, a community vote is launched.

The Squad uses the budget for service provider fees, travel as needed, and itemizes all expenses in its reports. The Builder may approve any expenses not foreseen in the Plan below $5000 total only if any budget line is not altered by more than 20% or the budget by 2% total. Any expenses not foreseen in the Plan that do not fit within this formula need to be approved by the community.

First instance of the Squad (March-July 2023)

The first instance of the Squad will be a 4-month trial for the Builder position only, to be extended for an additional year if goals are met. The person applying to be the prospective Builder will propose a workplan for these 4 months within the scope of the Squad’s goals, and work closely with the Stewards to develop a detailed yearly plan.

No budget for the Squad is requested for this first trial period, i.e. the seasonal governance budget will be used as stated in the Goals.

TL;DR

• This proposal establishes the Commercialization Squad, whose goals are to increase the $VITA token utility value and commercialize VitaDAO’s assets
• The Squad assists projects/companies pre- and post-financing with administrative, fundraising, operational and strategic planning needs
• The Squad’s work is accountable, measurable and presented to the community
• Approval of a trial period of 4 months is requested from the community; hiring the team lead (Builder) from the currently open positions
• No budget is requested for the trial period
• Squad members are compensated as per the DAO compensation policy

• Agree
• Revisions Requested (Detail in Comments)
• Disagree

[michaelgeer]

I am personally super excited about this becoming a focused squad. I know from long experience in consumer tech that the most important thing to accelerate a system is to complete the first full loops of that system. This is because: 1. As you point out, this proves to everyone that the vision of the system is truly viable. And people’s boosted belief in the vision can then be leveraged in many ways. 2. Completing full loops of a system (in this case: identification of investment asset → vote on investment → investment made → monetizing the asset → money back into treasury to invest in more assets) greatly accelerates learning that feeds back into all parts of the loop (example being future investments will be better, as we will start to identify ones that will both be easier to monetize and make more impact).

I will try to come back in a day or two and give more specific feedback on the proposal. Exciting!

[bowtiedshrike]

This looks like a plan to make $Vita a security. Given the amount of biotech in the US that is funded, it would be good if we can articulate here why it remains NOT a security-- but the proposal reads like a common venture to drive profits.

[vincent]

Love the general initiative and pro-activeness Eli, as well as range of ideas!! It currently entails a bunch of different initiatives, which might sense to separate out a bit into separate proposals and squads?

Think for the trial period where no budget outside of whats already governed is demanded can also kickoff before onchain vote

[vincent]

Echo your point on that the squad and specific initiatives should undergo legal review and gov votes (informed on written legal analysis, based on which the dao members can make a vote), so the DAO ensures to stay a gov token

[EliMo]

Interesting thought, @bowtiedshrike.
To make a general statement first: this proposal does not say “we won’t talk to legal before doing stuff”. Rest assured that legal will have a critical role in any token-related initiatives, just like before.

Please see goal 8 of the squad, as well as the description of the Builder’s role, specifically under 4. The Squad works closely with the Stewards and all WGs, and certainly proposes any new $vita uses for a vote before implementation.

Shrike, could you point to any element of the proposal that could make $vita a security? Is it the “in-game currency” prospect that bothers you? Would love to discuss.

[timrpeterson]

Thanks @EliMo. We seemed to have moved away from WGs having autonomy to implement their own budgets. In general I’m not happy with the consolidation down to 3 WGs. It centralizes what we’re trying to do. I’d like to see this returned to how it was before with a Steward in charge of each of them.

The longevity WG definitely needs a Commercialization squad. IMO this should require a dedicated Steward to make it a first class activity. One could I think actually fairly easily argue this Commercialization squad should be the most important group with the most resources in all of VitaDAO. That we’ve often referred to the longevity WG as the Dealflow group is a mistake. Dealflow is relatively easy. Everyone wants money. Taking a deep tech project from 0->1 is hard especially when there’s no founder in place which is the case for most of our IPNFTs. Anyway, again thanks Eli, hopefully this will pass and we can get to work!

[EliMo]

Hi all, @Ageless_Partners pointed to “token utility”, as used in the proposal, needing a bit of explanation. When we talk about token utility, we mean the utility value of the token to the DAO members, e.g. qualifying for partner discounts, access to services, etc.
It does not refer to the monetary value of the token.
It also does not purport to change the token to a “utility token” from a governance token. That’s not only impossible without a community vote, it would be irrational to do so.

In addition, the squad is pursuing goals already stated in the Strategy Plan for 2023 as well as in the Seasonal Governance plan.

Sorry if there was any lack of clarity about that.

[bowtiedshrike]

I think it’s important to remember that VitaDAO’s decentralized model encourages proposals as ideas from the entire community, including by people not familiar with securities laws, and as a result does not imply an intent by VitaDAO to act on any of these ideas. We hash these out before bothering legal about it, but as you point out, if there is forward momentum, we would bring a hashed out proposal to them for review before taking any action on it.

Also remember that I am not a lawyer, and will defer to their analysis.

Leaving aside Gensler’s recent nonsense about everything but BTC being a security, here’s the Howey test:

• An investment of money
• In a common enterprise
• With the expectation of profit
• To be derived from the efforts of others

SEC v Telegram and SEC v Kik have given some info on how these get interpreted by courts.

Anything the team or DAO does to drive value to the token can be considered expectation of profit derived from the efforts of others (even burning tokens!). To fail Howey, VitaDAO (and VitaCORE/WGs) cannot care about the token value.

A small group of dedicated, experienced people can address all of the needs listed above. This Squad acts as an independent pod or working group within the DAO

This proposal establishes the Commercialization Squad, whose goals are to increase the $VITA token utility value

The Squad must generate tangible, measurable value for VitaDAO. Whether these are in the form of successful integration of $VITA

management instruments for several elements of its operations, including the role of $VITA

I think the above statements hit all the prongs of the Howey test on their own.

Increase Token Utility Value
Liquify Research Assets

The value and utility of $VITA is important for another reason in addition to its role in governance. Until VitaDAO is able to achieve a significant exit, i.e. by selling the equity or licensing the IP acquired by funding a project, it may have to rely on raising funding by selling $VITA.

Driving value to the token is used to argue that $VITA fulfills the Howey test for ‘expectation of profit’ and that it is an investment.

Therefore, the cash value of $VITA must be maintained or increased

If the DAO approves this statement, it means it views $VITA as an investment w/expectation of profit (group is the ‘work of others’, DAO is the common enterprise).

There is a yet unexploited potential for $VITA to play a role in the space, such as becoming “in-game currency” for longevity-related apps, products, and systems. While preserving the risk-averse tokenomics approach and having in mind the original governance design of the token, a stronger role of $VITA in the space may enable VitaDAO to offer membership benefits to its community, popularize the DAO and IP-NFTs, and accelerate the achievement of its goals.

Establish $VITA as the “longevity token” through aggressive business development with companies and projects in the sector, especially focusing on its use as “in-game currency” for relevant apps and systems, with a detailed sales plan with measurable metrics

I see this as more of a grey area. Airline reward points are NOT securities. But calling it a currency will bias everyone towards the ‘real money’ idea. From a logistics standpoint, if you’re not going to use Eth for the ‘in-game currency’, it makes sense to use a totally unrelated token to manage risk/playability (you can authorize unlimited spend on your in-game currency w/o worrying about losing all your Eth for example, and limit your risk by how much in-game currency you hold)

Design and proposal of other uses of $VITA to increase benefits to its holders and VitaDAO and its members; coordinates such activities with the Coordination WG and specifically those members working on tokenomics

Designs and proposes uses of $VITA to increase benefits to the VitaDAO community

These activities may need to be carefully phrased to distinguish what kind of utility is being provided and how it is not profit. If I was pursuing regulatory action against VitaDAO, I would argue these mandates undermine any claim that any value of $VITA is incidental to its main purpose of governance (plus the ‘derived from the efforts of others’).

Some of this depends on how risk-on VitaDAO wants to be with the SEC. But I think it would be good to have arguments in place for why any change to the token does not help it fulfill the Howey test.

$Vita providing membership and/or membership benefits (including governance) might be an angle that can be explored that is more like stadium seats or airline reward points (ie not securities) than a token one would purchase to gain exposure to biotech.

[EliMo]

Thanks a lot for the analysis. Did you see my last comment?

When we talk about token utility, we mean the utility value of the token to the DAO members, e.g. qualifying for partner discounts, access to services, etc.
It does not refer to the monetary value of the token.

You are right, we should defer to the legal expert analysis, but I think you may have a point about this sentence:

Therefore, the cash value of $VITA must be maintained or increased

So I’ll delete that.

[EliMo]

Seems like the recent update messed something up, because it’s not letting me edit the proposal - will work on that in the morning.

[bowtiedshrike]

I think that clarification has to be in the proposal itself and reinforced so many times even the most redacted auditor cannot miss it. Explicitly prohibiting activities that could be reasonably expected to alter the monetary value of the token might help.

[EliMo]

Yes, you’re right. Tried to do it now, but Discourse hates me for some reason.

EDIT: updated!

[catthu]

I voted Yes for this. Given that this proposal doesn’t ask for money, I personally find it against permissionless principles to vote No – let the execution ability of the team be the main factor in whether it happens or not But the feedback I’ve been hearing (helping out those people who are too lazy to post on Discourse here) is that it’s better to stay small and focus: a squad for one specific project and do that project really well, instead of a general squad for all projects.

[Shift]

I agreen on the idea to separate different tasks for different squad.

Therefore an individual is necessary to increase the utility of Vita Token

When seeing the word of ‘commercialization’ at the beginning, i also go to the direction of money.

Is it a good idea to rephase the word to lower the mis understanding

[EliMo]

We discussed separation into different squads briefly during the community presentation yesterday, and what that would mean in reality. While it sounds good - decentralization, more people involved - it most likely does not work well in reality. A separate squad focusing on increasing token utility only or a squad focusing exclusively as serving as a CEO/COO for the spinoff in this early stage will likely not require a full time engagement. With this, you’ve immediately alienated any experienced entrepreneur (who you need for the spinoff help - NOT a pure scientist). So, you need two people part time, spending the same amount of $, but creating double the work for the Stewards, who are tasked to keep them accountable.

There are really no benefits to splitting this into two teams and two persons to start, except to say that we have more teams doing the same amount of work now. There is no reduction in risk here, only a higher risk due to the amount of management these teams would require from Stewards.

What we need for this squad is ONE person to start, who has experience and skills to do both things. Easier to hire (the Builder better have the skills to do both, as demonstrated in the past!), easier to manage.

Remember that it’s a 4-month trial that we are proposing.

P.S. Here is what commercialization means in the context of VD activities. The spinoffs we build need to be commercially viable in order to achieve VD’s long term goals. How would we get life-saving and life-extending medicines to the patient otherwise?