UPDATE:
As a follow-up to this General Idea, we’re proposing an Angel Fund of sorts that begins with supporting Made by Apes Licensees through small or medium grants and strategic guidance.
If you’ve been pinged on this Idea, feel free to DM me with your feedback, especially if you’ve been or are involved in Seed Stage or Angel Funding or know the ins and outs of running an incubator before.
Original Post:
As a follow-up to a previous idea and some comments that @Sasha brought up, I thought I’d add this concept for discussion.
I had suggested on a previous Twitter Space about the idea of allocating x amount of funds to be set aside for something like this – what I had coined a couple of months back as Ape16z - a VC fund run by experienced fund managers specifically focused on Angel and Seed rounds.
I bring this up purely to engage the community around the concept of how can the DAO fund various types of ideas without limiting experimentation or discouraging founders, especially for asks greater than $25-50k (which seem to be the comfort zone for the community currently).
Lots of great stuff to unlock here, perhaps we could start with an overview of what this could like, what kind of budget makes sense, how to stay on the right side of the law for something like this, etc…
This is totally in my wheelhouse, and I work with securities lawyers daily, been on Boards of multiple public companies, adjudicator for a major national arts grants org, fund and bring companies to market, etc. So if something like this is done I’d be happy to pitch in.
Especially if these ventures go the route of listing on a stock exchange, and in some future setup the DAO could be a shareholder while public markets would require meeting audit and regulatory requirements, plus a far easier exit which private companies can’t provide. That’s particularly important if the speculative sector isn’t as easy-YOLO as the past 2-25 years (and it won’t be).
That stated, I don’t favor the DAO going this route unless it:
effectively becomes a totally separate legal entity funded arm’s length by the DAO for legal, ethical and practical reasons. That opens up a can of worms though because why fund one such thing and not 50?
I’d much prefer proper vetting of the AIP authors and budgets, putting all the relevant voting info in one place and in writing within the body of the AIP (here, not scattered across the web), and letting impassioned authors / founders do their thing.
is a kind of specialized advisory board / Working group to comment on the proposed business, structure, sector, etc., or can find someone experienced in the sector to comment, as well as from legal/ethical angles, but I’m not keen on the trend of everything becoming a Working Group. Maybe such a group could simply issue a yes/no as to whether such a thing goes to AIP in the first place?
It’s been very obvious from some votes, or more so the comments surrounding those AIPs, that a lot of commenters aren’t well informed on the business end of business or on the way hostile regulators look at things.
Same as IRL - we all have our strengths. Those who have the related experience and knowledge could perhaps be of help in bridging that gap before a vote.
Bottom line is that the vast majority of ventures will fail, including many that have been proposed as AIPs. Adding layers to the process won’t help and it certainly won’t save the DAO money.
I’d much rather see those kinds of AIPs come in with commitments of co-funding from the authors or qualified outside groups / VC’s. The old “tons of interest but wanted to give the DAO first shot” sounds like… it sounds like it sounds.
Need at least a few mil imho, 15-20+ if any gaming investments are involved.
Legally could pass maybe if DAO just funds the fund and takes no kickbacks nor has any control over it. So it would be multiple AIPs, first ones involving selection of staff / stewards, then allocation of $$ for lawyers to create fund, and then final AIP would be to fund it.
This can only be done with the understanding that successful investments may grow ApeCoin usage and thus the ecosystem, but once the coin is given to the fund, it’s gone.
Totally agree with the dollar ask – maybe even more.
My thoughts were also to just have the DAO fund the funds and the management is in either in a Working Group format or a stand-alone entity.
And yes, 8 outta 10 will fail but the founders with ambitious proposals will not have to go through the DAO-wide vote, instead they’d have the option to pitch to the Ape16z team (whoever that may be).
For those members that wish for some equity, perhaps this kinda fund could be an avenue.
PS - after we sold our Virtual Gaming Studio to king.com back in the day, my partner and I used to advise napkin-dea founders with brand strategy and getting angel/seed/YC ready.
Meaning it’d be a very different approach going arms-length, starting an advisory board, etc.
One option is tried & true: a public company to fund others (far simplified structure, with public audits by SEC-trusted auditors, well-established and known regulatory environment and open compliance with all docs public on SEC databases).
There are good reasons these systems and structures already exist, and telling US regulators “but muh Caymans!” will NOT avoid serious problems if the DAO is going to start taking ownership in, or in part directing, companies domiciled and principally operating in the US.
DAO could have shares in escrow pending future ability to own shares (Legal Working Group is looking into this already), DAO members could have first crack at pre-IPO shares, and it’d be very easy to structure deals, spin-offs, etc.
BIG BONUS: A far greater reach in normie / trad-fi circles for ApeCoin which is a core principal in funding anything via the DAO. Way more opportunities to attend and host “events” targeted at the trad-fi community, attend the long list of conferences that already exists for that… and now we’re in your wheelhouse.
EDIT: SUPER BONUS - ventures can then go to equities markets for funding, not back to the DAO or struggling cap-in-hand to individuals who will see no exit unless the company goes public.
That’s just one example, based IME of what works and already having done ApeCoin DAO outreach in those circles.
Yes, that’s why DAO should only help select people involved and kick off the fund with $$ and have zero direction / influence on the fund. IMHO that’s the only way the fund will work and it’s clean.
I am not sure I follow why this is the best option. Very few funds are public. The vast majority of vc is private and it’s been working out well. Not to mention the paperwork for public company far exceeds that of a private one. Is there a component I’m perhaps missing / not privy to? You sound maybe more experienced in this area.
It’s an option I’m very familiar with and detailed the many pros and distinct advantages above.
VC is usually hoping to eventually go public, and unlike the DAO doesn’t have thousands - maybe hundreds of thousands - of stakeholders.
Without a public share structure we miss tons of repeat chances to spread awareness of, and participation in ApeCoin and this DAO, and for people from the largest spectrum to easily invest into these companies.
However, what we’re discussing is creating our own VC fund in-house, to the extent we’re able to, in an attempt to allay those concerns from voters that won’t vote for AIPs that “fund businesses” without equity and basically giving authors another option for their ideas.
So if we were to approach this general idea of creating our own Angel/Seed Fund, any thoughts on how you’d go about it?
I love the main concept of the idea!
It’s a missing opportunity here. So many talented entrepreneurs are ready to build products and implement ApeCoin, which should increase its value.
It is essential to create a fund that attracts top-notch startups with the understanding that they will receive not only funding but also connections, support, PR, and the opportunity to attract the attention of top Web3 investors and funds.
I do not see strong success here without an ecosystem with additional value.
Based on my experience, a common problem with funds without an incubator model is that the direct investor who provides the funds does not participate in the deals and cannot provide their expertise to strengthen a particular startup.
For example, I have invested through a fund, and at best, it resulted in some profit in monetary terms. However, if I invest in profiled companies where I have experience in that field, I provide both funding, connections, and my expertise, which significantly strengthens the startup and brings it to the desired outcome.
I would like to propose the idea of the ApeFund Incubator, which could provide startups with initial capital, additional value in the form of initial PR and mentorship, and also the opportunity for investments in the next round from individual investors within the community.
I think I was a little too quick to dismiss this idea, so I deleted the comment. Words like VC set me off but, I do see, if done well, with the right team and motivations, that this could be a win win for the DAO and hopefully just get the money out there - we really need to start driving funding new ideas and maybe VC approach/driver can do that for us, as rn I’m seeing a lot of admin costs and changes and little in our wins column in terms of what’s been achieved and we can say -‘we did that’.
GL. Great to see your never-ending motivation to get the bigger tasks addressed. LFG
What I would say is that your idea of an ApeFund Incubator would make a great AIP separately and could go through IF it did not make a request for funds to grant out.
Ape16z (this idea) would either be the funding arm of the incubator OR fund ideas/projects/businesses that graduate from the hatchery.
Look forward to seeing you put a team and biz-model together and return with a proposal – that’d be great.
Totally agree with every point you made above and especially the ways in which things can be approached differently - 100% aligned - also, after taking time to properly consider the idea yesterday, I had what is known as a light bulb moment - just makes absolute sense to me!
The facilitators comments - I did have a number of issues with the proposal. Also, as you rightly point out, communication on the progression of the flow and how these AIPs come to be is certainly lacking and could do with addressing asap. So after commenting initially, I thought to myself, you’ve trusted the stewards, SC and others up until this point, also the community are very good and knowledgeable too with oversight and input, so I will hold fire on any negative feedback and questioning re results, potential workloads, issues with process etc etc, let ‘them’ finish the job and go from there afterwards if needed as nothing is set in stone. So I went back in and deleted them all 10/15 minutes later, but unfortunately the apecoin discourse setup leaves a ‘deleted trail’ for 24 hours I think it is. So TLDR, I think is - I am impatient, possibly blinded sometimes when more money and staff are added to this process by non-community-voting method in strategic positions, but just want to see this finished asap so ‘we’ can all get (back) to work, get ideas funded and the space moving forward and ofc be the best DAO by a mile in the end!
We can help select projects get started with a small a capital infusion so that the time spent in discourse and snapshot could be used to come up with a Limited launch or a showcase. We all know the state of our bureaucracy, it’s a necessary evil though.
At a Fund lvl, Taking in projects and founders which need funds for development, guidance in the space. Think of taking in the Crem de la’ Crem of the Web 3 Society and nurturing them to be future leaders.
At a university level, fund innovation via grants to deserving candidates to research into cutting edge tech. Not only does this give us academic legitimacy, but it also funds ‘Public Good’ and that’s a W in my book.
At an individual level, funding the development of full fledged MVPs
Can Ape16z announce the raising of a fund and then the DAO just donates that money to the entity representing ApeCoin DAO? if yes, then what might be the legal ramifications of that?
Imo, our focus with Ape16z should be staying at the cutting edge of tech and leveraging that advantage to gain a significant edge over our competitors. Then we let Market consolidation do its thang while the separate legal entity owns a stake in the venture it funded.
Think of it as a private equity fund 1000x removed from the ApeCoin DAO, the management is inherited from the DAO.
Sort of like Paramilitaries inherit its Officer corps from the armed forces of a particular nation but are separate entities with wildly different structures.
what is erbsute, ser, plz use small words only for us dumb apes
As far as A16z X yCombinator - there are already plenty of web3 accelerators (I worked at one in '21). I think absolutely businesses should seek to go through one that fits their focus if the terms are fair, it’s a great experience. But it only makes sense to start our own if all others fall short.
Even I can’t remember what I wanted to write in its place.
Think of it as a small grant (for select projects only) to get things off the ground (maybe even build a working prototype) to showcase it to the DAO.
The entire discourse process takes a lot of time which might discourage people to pitch ideas.
With this we’ll help both the DAO and the Builders out by first giving them a cash injection so they could bootstrap or build a prototype which saves them both time and effort in going back and forth over an Idea.
Process : Project Asks for small grant → Review Process → Verify Credentials → Release amount in a staggered way
This would compliment the DAO and the discourse process imo, I’d love to know what you think
Do you have any projects/examples in mind for this? One could argue that if a month of discourse is too long maybe the idea is just not worthwhile enough or not ambitious enough
Until we ground these convos in specific examples and buckets, discussion can last forever as both sides of argument have pros and cons and no size fits all.
I assume you mean tiny amounts. What amount do you have in mind as the limit? And what is “Review Process” exactly and how different do you imagine it to be from current process, specifically?
That’s a good point but in some projects there’s a significant capital expenditure just to get off the ground.
Compute ain’t cheap, never mind setting all of it up (Frontend + Backend + Compute) . And if you need help from some outside counsel, that’s too bad.
They can use that small grant to get things up and running while the discourse process is ongoing, All projects dealing with MVPs go over from Discourse to Ape16z.
That way they can use that time and money to tailor the product as per the best interests of the DAO. That saves both time and effort.
Productivity
Mission critical amounts, Depending upon the project and its bracket
Seed : Upto $ 5K (Needs approval from 2 council members)
Plant : Upto $ 10K (Needs approval from 4 memb00rs)
Tree : Upto $ 20K (TBD acc to no of Council members)
Forest : Contact us for a custom amount (Needs a Unanimous approval)
.
but, I do see, if done well, with the right team and motivations, that this could be a win win for the DAO and hopefully just get the money out there - we really need to start driving funding new ideas and maybe VC approach/driver can do that for us, as rn I’m seeing a lot of admin costs and changes and little in our wins column in terms of what’s been achieved and we can say -‘we did that’.
