[VDP-26.1] Dealflow structure & incentives

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TL;DR: Miro | Online Whiteboard for Visual Collaboration

Summary

This proposal provides clarity to the VitaDAO community on how the Longevity Dealflow Working Group operates.

The group’s purpose is to make good deals happen (ie fund longevity projects) on behalf of VitaDAO.

Motivation

The dealflow process has been designed by experienced investors, entrepreneurs and scientists to meet two objectives:

  1. To maximize the number of high-quality longevity projects VitaDAO funds
  2. To upskill the community such that #1 is more likely.

By providing more people with clarity on the core activity of VitaDAO we can scale more easily.

1. What can you do?

The highest impact actions are:

  1. Source relevant longevity projects
  2. Shepherd projects
    a. Gather information and due diligence
    b. Get 3-5 independent reviews (2-4 Scientific Advisory Board members and 1-2 business/IP experts)
  3. Negotiate and close deals
  4. Assist current portfolio projects to advance towards commercialization
  5. Improve the process. See one, do one, teach one.

2. What is a relevant project?

Relevant projects would be aging research / longevity projects that are seeking funding (sponsorship, investments, grants) and open to sharing IP / revenue / some mutual benefit / upside.

We are aiming for 80%+ of our resources to fund early-stage, translational aging research (pre-startup), bridging the valley of death. The remaining percentage is to fund longevity startups that have a high potential to get to market fast.

We are looking for projects that we can help advance towards commercialization, usually a therapeutic targeting aging. A good model for what is in-scope and out-of-scope is Karl Pfledger’s outline of What Counts As Aging For AgingBiotech.Info

3. What are standard terms for funding?

This usually implies the researcher, company and/or institution (TTO) signing a contract with an agent like Molecule GmbH, a Swiss company. This can be a standard Sponsored Research Agreement, Royalty Agreement, providing attractive non-dilutive financing.

4. How does the dealflow process work?

4A. Sourcing relevant projects

Projects can be either referred to us by the community, discovered through outreach (by scouts or internal sourcing squads), or inbound via the website.

Anyone can be a scout or form a sourcing squad to increase efficiency in sourcing projects.

The current bounty (until March 15th) is 500 VITA per relevant project you introduce to us (up to a reasonable cap approved by no less than 2 stewards, see full terms here). More bounties can be seen below.

How? Reach out to researchers, TTOs, communities, conferences, prioritize promising leads, develop relationships.

4B. Shepherding projects (getting reviews, due diligence, etc)

Once a relevant project is identified, a deal squad is formed (2-3 members, based on skill and interest) with a shepherd as the main point of contact.

The squad works to advance the deal through our funnel (where we can view at a glance the stage, details, or bottlenecks of the deals). See the workflow here: Miro | Online Whiteboard for Visual Collaboration

4B.1) Pre-qualification

Before we spend resources on shepherding, we first need to verify that the project checks a few boxes:

  • aging research / relevant longevity project (if unsure, ask a steward)
  • can have a pathway to generating Intellectual Property and potential commercial value
  • is seeking financing in exchange for sharing some form of upside with us
  • the team has access to appropriate facilities for the work proposed

Otherwise, it can of course be proposed but it’s separate from this dealflow process and incentive structure.

4B.2) Refining projects, gathering information

The shepherd coordinates with the applicant to get any follow-up questions answered and potentially help refine or create a path to commercialization.

Gather information, due diligence in a Project Details document (see template). This will be access-controlled, with careful consideration to whom is given access, based on the level of confidentiality required.

4B.3) Getting reviews

The shepherd will send the Project Details document (containing all info, including our review form) to 3-5 independent Senior Reviewers (2-4 Scientific Advisory Board members, 1-2 business/IP experts) for discrete, unbiased evaluation (kept secret until after the review stage is over).

We are maintaining a list of Senior Reviewers and candidates in the Dealflow CRM, and for each person in there we have “Shepherds”, team members maintaining that relationship. If you don’t have a relationship but want their review, you can reach out to one of the shepherds of that relationship to introduce you as a team member and make sure random people don’t spam Senior Reviewers.

Reviews, if possible, can be visible internally (although anonymized).
- These could be restricted to the shepherd
- I’d want to know who reviewed so I can continue the conversation, and can keep it confidential

4B.4) Summarizing reviewers consensus

The squad will make a summary of the senior reviews (including the conviction) and gauge the level of excitement.

We have 4 tiers:

A) :star_struck: Very exciting (stellar team, exciting tech etc). We keep a healthy dose of skepticism but all we need to close is final dd and negotiation.

B) :muscle: Potentially strong, worth following up → set up a call or send a list of questions

C) :thinking: Unconvincing. Wouldn’t be worth talking unless they show us X,Y,Z (big changes) → tell them what we’d need to see for it to be an (A)

D) :person_gesturing_no: Out of scope or surely not gonna work, not worth talking with them → tell them why, but re-application is welcome

4B.5) Posting a report for the community

If the deal falls in Tier A from above, we post the project on the Discourse governance forum as a Phase 2 proposal, for broader community feedback. They will get a “stamp of approval” from the Longevity Dealflow WG, with a quantitative score (1-5, highest being 5) and qualitative brief reviews from the Senior Reviewers.

Tier B is the most common. While we get the follow-up questions answered, we can post the project for community feedback in the “Projects in review” section of our Discourse forum or as a Phase 2 VDP.

If we don’t yet have that precious “stamp of approval” from a panel of experts, projects can still go to a Phase 3 vote, but we’ll clearly inform the tokenholders that the Longevity Dealflow WG doesn’t yet recommend funding this project.

Public Discourse posts will be done with assistance and agreement from the applicant.

For Tier C or Tier D, we’ll send a "not now” email asking for more data or whatever changes we need to move it to Tier A.

Until they make the necessary changes, applicants can submit their projects to our “Projects in review” section, allowing for community feedback and involvement.

This wouldn’t be a recommendation from the team.

We shouldn’t send a clear “NO” email to any project unless we all agree that it is out of scope or stupid. Passing on good projects is the nightmare scenario, and VitaDAO is not (and should not be) so risk-averse. The danger is the status quo, with promising projects overlooked by regular investors not getting the funding that would advance longevity therapeutics.

4B.6) Negotiation and closing

If the Phase 2 vote passes, we move to Phase 3, for a token-based, final vote.

The squad negotiates with TTOs, gets consensus around terms (ticket size, ownership stake, etc) and works to close the deal.

4C. Assisting current portfolio projects

The ultimate goal is to advance research towards commercialization as longevity therapeutics. That may involve helping with company formation or further fundraising, hiring, partnerships, synergies and community involvement.

4D. Improving the process

Anyone can get involved and “see one, do one, teach one”.

5. Incentives and evaluation flow diagram

Our goal is to fund a lot of quality projects. To do that, a good objective is 2+ IP-NFTs to be voted on per month.

We have built a wonderful crowd in longevity/dealflow, and we are hereby moving to improve the structure and compensation scheme in an effort to be more efficient in sourcing, shepherding and closing deals.

Most existing contributors and potential contributors can do bounties (outlined below and in Miro) and show proactivity, resourcefulness, expertise, results and alignment towards becoming a part of the “core dealflow team”, aligned with a vested governance allocation and/or on a monthly basis.

The highest impact actions outlined above, creativity and internal recognition (acting as a glue, helping in multiple, unpredictable ways) will be highly compensated, outside of bounties.

Current structure and incentives: Miro | Online Whiteboard for Visual Collaboration

Definitions

Shepherd - someone who leads project acquisition, ensuring the internal reviewing, and if passing that the on-chain voting. This person needs at least one other person in their squad member who believes in the project and who contributes effort to seeing the deal through.

Sourcing squad - a small, nimble team working together to source new projects. They do outreach campaigns, talk to researchers, enthusiasts, TTOs to discover projects that might be fit for VitaDAO

Deal squad - a small, nimble team working on a specific deal. Can be a team that is specialized on a specific vertical. They are empowered to put projects on-chain.

With respect to the amended VDP26.1, I:

  • Agree
  • Agree with revisions (please comment)
  • Disagree
0 voters
6 Likes
2

Perfect. Thanks for explaining dealflow teams better to the general public.

On the process and evaluation reports… my idea as commented in deal flow before with agreement from deal flow team (copying here for visibility):

think it would be great to see (3-6) different brief evaluator statements in the evaluation (could be in favour, against or neutral)

not having looked at it into depth i wouldnt know how to vote

we need to help make people an informed decision without having it diligenced by each token holder

i’m in favor of moving these mixed conviction deals on chain but with clear statements in favor and against

ultimately thats the highest value of our dao… sourcing deals and letting community and us token holders decide depending on our take informed by different evaluator statements

could also be something like: out of 8 evaluators, 5 were in favour and 3 were against funding… + small statements and anon credentials like academic/professional status (researcher, investor)…

also disclaimer for personal interest conflicts as mentioned… to mention if someone who evaluated is involved with the project for example as direct investor outside of vita, which aligns incentives and means that person is knowledgeable about the project but also potentially biased

6 Likes
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Thanks for summarizing the current process Laurence, I think it reflects quite well what we are doing. Shouldn’t be this post under the #working-groups:longevity tag to make it more visible? It seems that it currently lacks any tags.

I also agree with @vincent above and I will try to incorporate his ideas to the next edition of VDP-16.

@longevion has also pointed out in Discord that we should communicate carefully the critical points to avoid bashing projects publicaly and I agree. Since we meet with the project leads (sometimes several times), we have the opportunity to discuss those critical points with them and add in the proposals how they are going to address them. So I think those points should be communicated as risk management without being adversarial.

6 Likes
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Continuing to develop the conversation here - we can comment on Tim and Todd’s awesome initiative for iterating to a consensus on this diagram about the Dealflow process:

My current worries are about the level of risk aversion and potential veto of early stage, promising, unconventional types of projects. Of course this has to be balanced with an ability to move fast and not leave things “in limbo” or evergreen discussion.

Eager to hear comments on Miro, what you’d disagree with in the main post so we can have something written that represents consensus.

3 Likes
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Expanded this a lot and made it into a Phase 2 proposal. Eager to hear comments!

1 Like
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I disagree with the “no hard no’s” concept.

You should be very clear about whether the project is or is not good in its current form. Give them a hard no but then tell them how to change the proposal to fit with VitaDAO’s value streams. The faster and clearer you are, the better it is for them and for us. If you can get turnaround times on the order of days or even hours that puts us in a completely different universe than any other grant application process.

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I agree on “tell them how to change the proposal to fit with VitaDAO’s value streams” that’s what Tier C is. I just call it a soft no. An email telling them not now, as it is, but here is what we need to see to move to Tier A.

8

Thanks for developing more the process.

There are a couple of things regarding the Senior Reviewers that need further clarification:

  • Are the Senior Reviewers always the same closed group of people or do they have to be gathered by the shepherd for each project?

  • Which qualifications are needed to be considered a Senior Reviewer? Who gives them their status and how? How will they be indentifiable by shepherds?

3 Likes
9

Good questions! The squad has to get reviews from 3-5 Senior Reviewers but not necessarily the same 3-5 people because nobody has expertise in all areas. I’m using this list: Senior Reviewers view
The trend is that we’re building a big enough advisory board (SAB and GAB) to cover all areas and be decentralized enough that we can get reviews for our deals from the top relevant people quickly.

Regarding qualifications, there isn’t a fixed set as of now - the list above is maintained through social consensus. Feel free to suggest a formal process.

FYI some of the people above have agreed for me to send them an email from time to time with a Project Details doc, and they are free to review in exchange for the Senior Review bounty (currently 500 $VITA).

FYI, for each person in the Dealflow CRM there are “Shepherds”, team members maintaining that relationship. If you don’t have a relationship but want their review, you can reach out to one of the shepherds of that relationship to introduce you as a team member and make sure random people don’t spam reviewers.

1 Like
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Agree with @vincent. It would be good to see Senior Reviews as a required component of the on-chain proposal. I would suggest we require more than 2-3 reviews as I originally argued. If we do 8 like Vincent suggests I think we need to be more stringent with the $USD payouts so that we’re not spending $4K on reviews and because I don’t think we want Senior Reviewers to feel obligated to spend $500 worth of their time (1 hr) on a review. Senior Reviewers should be able to judge a project in 30 min or less. I suggest $250 or 500 VITA per review to incentivize people to take VITA.

2 Likes
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@Max_Unfried suggested the following:

I’d suggest that we make criteria of who can be a senior reviewer more precise of: For example
a.) reviewers cannot review projects they sourced themselves
b.) people who are in charge of paying/managing reviewers e.g stewards should not be senior reviewers themselves
c.) the science reviewers should be experts in the field of the given proposal e.g someone evaluating mitophagy proposals as senior reviewers should have done Mitophagy experiments or published in this area.

1 Like
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There’s a proposal from a wg member to pay out VITA to “junior reviewers” as well.

The amount suggested is 50-100 VITA per review.

Should we start a list?

The only downside I see is that we might have overhead become too big of a percentage of the funding deployed to actual research. We can’t spend too much per project, especially since a lot won’t be funded.

Should we have a cap?

My thinking was that those who want to help a deal move forward become squad members and get incentivized according to the diagram. A quick review (especially if it doesn’t bring anything new or we already have enough) might not help a deal get done at all. The first one or two might help, though, especially if it’s not the only action done by the squad member. Having to decide if a review alone is helpful in order to award a bounty seems too granular. I think retroactively it’ll be clear who helped a deal move and maybe the shepherd and/or squad consensus recognizes such a new squad member.

Thoughts?

1 Like
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I think it is important to clarify from which date will this structure be effective after the proposal passes. There have been some projects that started with the old system and are quite advanced, so I don’t think applying these changes retroactively would be a good idea.

I would suggest that the text includes something like: “The structure described in this proposal will be applied for all future applications effective immediately upon the passing of this proposal”

14

One is certainly free to put up proposals that don’t follow this structure, and if senior reviewers are not ready to give that stamp of approval, even if it has the 10 votes, when the proposal goes to phase 3 it’ll include wording that the Longevity WG isn’t ready to give a recommendation. Therefore, it is in the interest of the initiator to gather consensus within the WG that tokenholders entrust.

Do we agree this is ready to advance to phase 3?

1 Like
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This proposal is now live for voting on Snapshot

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The latest agreed-upon-by-on-chain-vote version of VDP26 can be seen on Snapshot .

I’d like to open this as VDP26.1 for amendment suggestions

20

Would rather suggest to create a new thread and new VDP called “Dealflow structure & incentives amendments” or similar. This proposal has concluded phase 2 here and the thread got closed for that reason, the proposal has also already passed on Snapshot. To not confuse this proposal with an amendment proposal, I’d rather seperate the two. Does that make sense?

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Let’s figure out how to improve the UX, don’t want to make it too hard for people to follow - we already had links to this in various places and then if someone finds this but there’s another one more up-to-date it’s confusing. The cool thing with discourse is that it tracks changes as diffs - we should take advantage of that somehow