VDP-54 Institutional Genesis Raise

Proposals Passed Proposals
1

Summary

VitaDAO has received a good deal of high-level interest from institutions in the biopharma space in becoming VitaDAO members. The DAO could benefit from adding such strategic contributors with cutting-edge industry knowledge and deep networks. Institutional members will extend VitaDAO’s reach, advance VitaDAO’s mission, and enable additional longevity research funding, dealflow, and community awareness.

Following VDP-11 we propose allocating approximately 6% of the total VITA token supply to new strategic contributors admitted as institutional members of VitaDAO pursuant to the application process described herein.

Update

Read each institution’s proposal in the Proposals section:

Motivation

As VDP-11 laid out, working group members believe it would be beneficial to the mission of VitaDAO to invite strategic contributors into the DAO through an Institutional Genesis Raise In order to continue its mission of funding longevity research with institutional support.

Specification

The Institutional Genesis Raise aims to raise at least 4m USD in mission-aligned funding by auctioning ~6% of the total VITA supply (3.86M VITA) to strategic contributors selected by the VitaDAO community. Strategic contributors will purchase VITA directly from the DAO Over-The-Counter (OTC) and through a special-purpose vehicle (SPV) created pursuant to VDP-24. It is anticipated that 1.447.500 VITA will be allocated for direct OTC purchase and 2.412.500 VITA will be available for purchase via the VDP-24 SPV subject to final commitments.

An individual or entity can make a proposal to VitaDAO to become a strategic contributor with a written application to the VitaDAO community.

Ticket sizes

Two ticket sizes are available.

  • 6 slots at a minimum of 250k USD
  • 5 slots at a minimum of 500k USD

A further allocation of up to 500k USD is reserved for smaller tickets accepted on a case-by-case basis by the community.

A 250k slot entitles the strategic contributor to become an observer across VitaDAO’s working groups. Each 500k slot comes with regular appointments with VitaDAO’s working groups to stay informed and exclusive access to VitaDAO’s IP including a first right to purchase developed IP, or in the case of Decentralised Tech Transfer (DTT) projects, right of first refusal to participate in initial capitalization of spin-off entities.

Governance process

The operational process for strategic contributors to apply and contribute is as follows:

  1. This proposal shall be voted upon and brought into force.
  2. A potential strategic contributor shall register their interest by sending an e-mail to Todd White, Operations Steward ( todd@vitadao.com ).
  3. Each strategic contributor will be requested to submit their proposal to the legal and operations working groups which will work with each strategic contributor to align and finalise their application.
  4. Once the proposal is accepted in principle, each strategic contributor will sign an Expression of Interest (EOI) to purchase governance tokens…
  5. Once all the EOI are collected, the VITA price is locked and announced.
  6. Each strategic member will have its proposal shared with the community which will be introduced and published by Todd White, Steward of the Operations Working Group ( todd@vitadao.com ), in the “Strategic Contributors Proposals” section on Discourse as part of Phase 1 governance.
  7. Subsequently, a proposal identifying the participants in each tranche shall be published in the “Proposals” section on Discourse as part of Phase 2 governance.
  8. The governance working group shares the same proposal on Snapshot in compliance with Phase 3 governance.
  9. If there is demand for a second or third tranche of the raise, steps 6-8 are repeated.

Implementation

Success metrics

The Institutional Genesis Raise is deemed successful if the treasury grows by at least 4 million USD equivalent.

Timeline

  • Discuss and vote on VDP-54 in the second half of August
  • Evaluate initial introductions by strategic contributors in the second half of August.
  • Discuss and vote on the first tranche of the raise by September 12th.
  • If there is further interest, evaluate introductions by more strategic contributors in September
  • If there is interest, discuss and vote on the second tranche of the raise by the end of September

Budget

This proposal does not ask for an additional budget. The required token allocation was approved in VDP-11. The work is being done by working group members.

  • Agree
  • Agree with revisions (please comment)
  • Disagree

0 voters

5 Likes
2

If you believe in the long-term success of VitaDAO, this proposal sells VitaDAO short by not asking for enough value from the investors.

One key problem is that the only success metric benefiting VitaDAO is the treasury raise. What about metrics like ‘offer feedback on X proposals, connect with Y pre-seed funders’? One option allows them to buy a WG position; will there be expectations for their contributions to those WG? Eg if an investor has a spot in legal, will they be expected to provide legal advice? If they’re in the longevity WG, will they be expected to review a certain # of proposals? Will they provide marketing? Getting this hashed out now will avoid problems down the road.

I’ve lost track of where the duelling governance proposals currently stand, and I’ve never paid attention to the WG size. How would adding 5 VCs to each WG change the dynamics of those governance proposals and working groups? Would they get special treatment (ie what if the community wants to boot them from WG)? Also, only ~1.4M $Vita votes regularly on Snapshot, so it would be easy for three institutional investors to take-over VitaDAO just by participating. Pro is it decentralizes away from Molecule, con is that it hands control over to other entities that may not be as committed to web3.

Another weakness is that there is no mechanism in the proposal to limit insider trading. Giving people a spot on the WG gives them access to insider knowledge, and the play there is to buy a position observing the WG, and use that insider knowledge to either dump their tokens before the bad news becomes public, or buy more just before good news to sell for profit. An across the board policy up front will protect the DAO from VCs that just want to pump and dump it, and hopefully weed out any groups just looking to make a quick buck.

I understand the challenge of voting over every little thing, but what about offering only 1/2 of the slots now, and then raise the cost on the second round of slots?

If the goal is to sell 6% of $VITA for ~$4M, that puts your valuation of VitaDAO at 67M. Current FDV is $68M, and that is bear market pricing. While I agree the team should NOT try to increase the token price (since it’s not a security), I think the community should push the team to get as much value out of these transactions as possible to enable the DAO’s mission. If VitaDAO is giving all of these perks to institutional investors, why is a premium not required on top of the nominal price of the $Vita? Or phrased another way, what value do the proposers put on WG access, exclusive access to the IP, right of first refusal, and governance rights?

Is VitaDAO providing something transformative and innovative to these investors that no one else is? Based on the # of slots in the proposal, I presume there are ~20 serious candidates interested in VitaDAO? (if not, would suggest that the # of slots be adjusted to 50% or less of serious parties). VitaDAO is the prize, and these institutions are lucky to get these perks. We should value VitaDAO accordingly.

8 Likes
3

Great comments as always @bowtiedshrike - let’s get into it:

As part of Steps 3 and 6 in the Governance process above, we will be requesting that each contributor outline their alignment, and their commitment to contributing to VitaDAO. The template can be found here.

To your point, we have a governance token and part of exercising those governance rights, especially when you are granted a sizable number of tokens, involves providing active contributions to the operation of the DAO. Passive contributions from large contributors is not in the long-term interest of VitaDAO – but I can say from the conversations we have had with some who have expressed interest, there is a recognition of the value that VitaDAO brings, and they want to actively contribute.

The fairness-of-access issue is addressed in a couple of ways:

First, these contributors will be on a lockup and vesting schedule for tokens over 4+ years. Long-term alignment is the goal of this raise as much as the capital.

Second, for most of these institutions, the deals we have are too early for most of them to invest in directly, and they lack the in-house ability to properly evaluate the projects. One of the absolute strengths VitaDAO has is the community of researchers who all operate in the longevity field who can critically evaluate the science. So from their perspective, our value for them is to bring the most promising deals across the “valley of death” and then when we have de-risked the projects, they will definitely want to help commercialize the assets.

Thirdly, all of our projects are reviewed internally by WG members, but the resulting proposals are all public to the community prior to our funding of the projects, as are the ongoing dialog and updates around projects - arguably, there is little opportunity for abusing this access, and in terms of the DAO itself, our treasury is public so there is unlikely to be any bad news that wouldn’t be visible to the wider community.

To your comments regarding valuation, the $4m raise is not needed to operate the DAO itself, but it is to fund a number of really great projects. We should raise enough to execute those high-conviction projects, and wait for the markets to get back into bull territory then we will raise again. We’re operating on a 24-month bear market hypothesis currently.

$4m will allow us to continue operating without losing dealflow momentum. We have a circulating supply + accrued allocations of 19.3m pre-raise, and will have a circulating supply of 23.1m post-raise. I tend to agree with your assessment that the value of VitaDAO’s governance is underrated currently, but the thinking is that we want to favor operational certainty for funding our projects now, and that these strategic contributors will be well-aligned to help ensure our next raise is favorable to our valuation.

8 Likes
4

This is helpful, and includes a lot of what I was hoping for. In the instructions, it might be better to say ‘evaluate’ instead of ‘discuss’ in the 4th intro paragraph.

They could start contributing on discourse and in the discord now.
The challenge is balancing increased participation (which is good) with take-over (which is bad). If they take VitaDAO over, they can ensure ‘alignment of goals’, too, lol.

The 4+ year lock is a strength, and will some of the degens out. The concern for abuse is knowledge at the WG level being used before it becomes public, and the risk to confidential IP involved for some of the working groups. There are large funds out there that don’t care about insider trading, protecting others’ IP, or NDAs. 3AC, Celsius, Bancor, Terra all did questionable things, despite being trusted, before their blowups. They lied to a bunch of other people and took them down with them. To reframe, I would ask what due diligence will VitaDAO do on the prospective investors?

I suspect the investors you have in mind are much higher quality, and may need to avoid the non-public information for their own protection, so this may be a non-issue. But some protection/diligence in place for when web3 investors (or nation-states posing as web3 investors) express interest might be helpful.

This is a good point. But if they want to get a 10x, and they start from a higher valuation, isn’t that even better for VitaDAO?

This may be another biotech-academia difference, because I hear a lot about the importance of deal flow, but do not understand it. Many funding agencies have annual funding rounds, and they attract good projects. If anything, doesn’t considering multiple deals at the same time improve VitaDAO’s ability to choose the best? And for Valley of Death, how many other options do they have?

4 Likes
5

Some of them already are doing exactly that (contributing) - which is why we have received the interest in the first place.

We are very careful with IP in general, and we operate on a need-to-know basis for sensitive data (even within the review teams) and the project lead has the ability to vet the groups who are reviewing their data.

That said, we do as much due diligence on these strategic contributors as they do on us in the end.

5 Likes
7

This proposal is now live on Snapshot.

Start date of voting Aug 26, 2022, 4:19 AM CEST

End date of voting Sep 02, 2022, 4:19 AM CEST

1 Like
8

This proposal has successfully passed!