VDP-7 Equity/Startup Deals Proposal

Proposals Passed Proposals
22

I’m very sorry, it’s really been on my mind for days. But before the voting, at the risk of making myself unpopular, I have to ask the following (retoric) questions:

  • Does the fund really fulfill the mission for which VitaDAO was founded? It was supposed to bridge the valley of death of underfunded research projects and thus support longevity research.

  • Isn’t it an early surrender after only 4 months to say that we can’t find good partners doing IPNFT deals and change the tactics?

  • Are projects like mentioned in VDP-8 really dependent on VitaDAO’s help?

This is time-sensitive. Some startups are closing their funding round this month.

  • I have a bad feeling about this when decision makers are pushed to make a quick decision with the argument of time constraints. Here we almost missed the fact that we almost lost control of VitaDAO by giving away the majority of VITA tokens. What else did we miss?

My suggestion is:

  • Forego the investment of 5M VITA (this has already been done).
  • Disclose and approve the final contract between VitaDAO and the fund before the transfer of funds to ensure the necessary transparency. (Is the DAO an entity that is capable of enforcing such a contract?)
  • Not to sacrifice the necessary diligence to time constraints.

At least for the current voting clearly inform the voter about the risks and disadvantages:

  • VITADao’s loss of control over allocation of invested sum & no web3 compatibility (as mentioned by @PaulHaas).
  • Possible conflict of interest requiring another layer of additional trust (as mentioned by @Ben)
2 Likes
23

Awesome, no worries, dissent makes everything and everyone better. Appreciate your input!

I know your questions were rhetorical, and I’m going to address a few things.

We want to help advance earlier and earlier stage longevity research, bridging the translational valley of death, and we want to do it in a big way. And if we want to fund the most underfunded projects, that’s fine, and if we only do that, it’s very likely none of them will succeed. Maybe there’s a reason they’re underfunded. We can still probably have some impact this way. Worst case, we’ve gathered an awesome team that picks the best places to “donate” money, with no returns.

By doing some equity deals, we can get some safer assets and be able to then go and raise a lot more funds to have a lot more impact, think longer term. With some successes, you can afford to fund long-shots, and find the 1 in X (50,100?) underfunded projects that will actually be undervalued (not just fairly valued, by for-profit funders or non-profit funders).

We also are setting up a (pretty big, I think) Gitcoin round for the non-profit side.

Around 80% is still proposed to be going after IP-NFT deals.

I have a bad feeling about this when decision makers are pushed to make a quick decision with the argument of time constraints.

We were transparent with timing, and we won’t make the deadline, as you can see this proposal hasn’t been rushed to be put on-chain, not even after the standard 7 days. It’s been up for discussion for about 11 days.

Here we almost missed the fact that we almost lost control of VitaDAO by giving away the majority of VITA tokens. What else did we miss?

This is inaccurate, we didn’t almost give away the majority of VITA tokens.

A fund has a fiduciary duty to its LPs (VitaDAO).

2 Likes
24

Here is the proposed JSON for the on-chain proposal:

{
    "proposal_type": "governance",
    "title": "VDP-7 Equity/Startup Deals",
    "summary": "This proposal is to decide if VitaDAO will do equity deals (i.e. fund startup projects) in addition to IP-NFT deals (i.e. acquire a project's IP). This would enable participation in opportunities at a more advanced stage that have already obtained validation of their commercial prospects independent of VitaDAO. In essence, they are safer bets.",
    "details": "We are in advanced talks with a few startups and the Longevity WG team is excited about them. These startups are not practical for VitaDAO to acquire a stake in via the IP-NFT route, and funding via traditional equity, SAFEs, or convertible notes is required for our involvement.\n\n\n### Rationale\n\nSome of the most exciting areas in longevity, such as cellular reprogramming, are already at the company stage. Therefore, focusing solely on academic projects will put VitaDAO behind the curve. Our main focus is making a difference in the real-world, so we propose funding companies close to making that vision possible.\n\nEquity and startup deals provide a concrete measure of valuation well understood in the marketplace, which is something IP-NFTs do not yet have. We can use that valuation to gain VitaDAO exposure and help build up the DAO's credibility.\n\nFurthermore, participating in equity deals alongside traditional investors will enable us to foster closer relationships with those who may eventually be purchasers of IP-NFTs. For the companies we fund, this will mean access to a growing network of VCs, incubators, operators, etc. Everyone benefits.\n\nWhat’s unique about VitaDAO is our passionate, engaged community of longevists. This enables us to add value to the Fund’s portfolio companies in unique ways compared to traditional VCs. Our community can help companies with not only the science, but also in marketing and growing awareness – creating value for both the portfolio companies and VitaDAO\n\n\n### Risks\n\nEven though IP-NFT deals will be at an earlier stage and perhaps riskier (since most academic projects don’t make it to the company stage), equity and startup deals are still subject to investment risk, including possible loss of the principal amount invested.\n\n### Specification\n\nThe amount proposed for VitaDAO to invest in a fund for equity deals is $1.5M.\n\nWhile the industry standard fund fee structure is a 2% annual management fee and a 20% carried interest, we instead propose a fee structure of a 0.1% one-time management fee to cover setup costs and a performance fee of 8% assessed after liquidity moments for portfolio investments.\n\nFor a full description of the motivation for this proposal, read the VDP-7 Governance Forum post at the link below.\n\n\n**This is time-sensitive. Some startups are closing their funding round this month.**",
    "link": "https://gov.vitadao.com/t/vdp-7-equity-startup-deals-proposal/325",
    "linkText": "VDP-7 Equity/Startup Deals on Discourse",
    "project": {}
  }

Also available here: JSON Pinned at Pinata

You can also find this on the rinkeby dapp here: Rinkeby Equity Proposal

25

Thank you for taking the time for your detailed explanation. I now better understand the motivation. I think it was important to address these concerns.

5 Likes
26

Agree with these points. Think it’s a worthwhile and exciting direction to explore for Vita, and also has the support of many contributors and token holders, so I think it should be put to onchain vote in different stages, 1. if we want to do equity deals 2. with how much resources to start with 3. vote on specific deals…

3 Likes
29

Link to the on-chain proposal (that passed :tada:): VitaDAO

2 Likes