Like Y-Combinator or Andreessen Horowitz, CityDAO Ventures will make investments in promising startups in exchange for equity in these startups.
CityDAO Ventures will be wholly owned by CityDAO. Because investments are made using Citizen money, Citizens, through CityDAO, will own the equity in these startups.
In 2023, CityDAO ventures will make 10 $100k investments in promising startups.
Why
Bear markets present the best opportunities to invest in builders for cheap and reap rewards during the next bull market.
CityDAO needs ways to replenish its treasury.
CityDAO has the opportunity to monopolize investment in under-capitalized verticals with large Total Addressable Markets, such as Network States and Harberger Taxes. CityDAO can become known as the “Y-Combinator of Network States”.
Who
A 5 member “investment committee” will source, vet, and recommend investments to the CityDAO community.
Each member of the investment committee will be voted upon via CIP, hold the position for 6 months (after which a new vote will be held for the membership seat), and will receive $5k per month as compensation.
Note: being the author of CIP-132 does not make me (Will) an investment committee member or establish any relationship between myself and this project… I am simply its proposer.
How
Assuming this CIP passes:
A self-nomination process for the investment committee members will commence.
This process will run for 2 weeks.
During this period, Citizen token holders can nominate themselves for 1 of the 5 Committee seats.
At the end of the 2 weeks, a CIP will go live on Snapshot with each nominee as a vote choice.
The 5 nominees with the most votes will be the initial Investment Committee members.
Once committee members are selected, a multi-sig will be established with the members as signers. The multi-sig will be funded from CityDAO’s treasury with $1.6M in ETH and/or USDC.
$1M for investments
$300k for 12 months of investment committee compensation
$300k for miscellaneous expenses (e.g. outside legal counsel, fund setup costs, compliance, accounting)
Committee members will develop a funding application process and use it to solicit and vet investment requests.
All vetted application requests will be brought before the CityDAO community via a CIP.
If an investment CIP passes, the investment will be made.
I oppose this in its current form since $1.6m is basically all of the DAO’s money and would replace the entire DAO with a 5 member committee.
I would potentially support something like this if it were a much smaller amount of money. Even a $10k check is often very meaningful for a small startup - we don’t need to write massive checks.
Also this proposal does not make it clear if the 5 people are just doing this out of goodwill or if there is some payment to them. Who incorporates the fund? Seems like it needs leadership.
Remember, I have nothing to gain here either way. That being said:
Yes, and it respects that many of the community members came here for a financial benefit, not for guild members to collect salaries or for projects to receive grants.
I’ve never encountered a single startup that $10k moves the needle on. That’s 1 month of salary for an entry-level software engineer… do you want to invest in world-class teams or…?
Each member of the investment committee will be voted upon via CIP, hold the position for 6 months (after which a new vote will be held for the membership seat), and will receive $5k per month as compensation.
Wholly owned by CityDAO = CityDAO is responsible for fund incorporation. The problem with centralized “leadership” is that, without checks and balances, it becomes a group of people putting their interests in-front of the DAO’s and tacking @DAOvolution’s name onto things with 5 minutes of notice to make up for lack of credibility. I’m confident that there are 5 people amongst us who, with $300k in discretionary budget, can collectively handle this.
I like the idea of funding start-ups. It seems like a natural extension of the grants guild and the excellent work they’ve done finding meaningful ventures and helping with small grants. I think there is great potential to CityDAO to fund start-up ventures as a VC investor. My concerns relate to the committee and to the amount of funds allocated.
Regarding the committee, this proposal would give $30K per month compensation and use of nearly the entire CityDAO treasury to a group of 5 people chosen in a single 2-week election. This election would be decided by the number of NFT votes. Large NFT holders could sway the elections. This would not take into account real VC investment experience. Candidates would not be vetted. Anyone could claim experience without proof, or hold up a “resume” or “CV” that lists experience they may not actually have.
To put nearly the entire CityDAO treasury in the hands of 5 people might warrant a careful hiring process based on serious KSAOs and the appropriate skill sets.
Does the community have the appropriate tools to determine if someone is qualified, or are they voting on whether someone says they are qualified? Couldn’t this just become a popularity contest?
Yes. Seeing as many (most?) of the Citizens purchased the tokens with the expectations of earning a profit, achieving the stated mission (build a city on-chain) or doing both, our collective efforts should be focused towards these ends. In other words, we should “fork” into a VC firm seeing as our internal efforts (projects, guilds, etc.) to achieve these ends have largely failed to move the needle by any measure.
We dont have the funds to spare, we need them so we can build not to invest in others.
CityDAO becoming an investment focused DAO detracts from the real mission and isnt the point.
This would also pay far more than the current treasury managment/finance team that have (very successfully) managed much more $$$.
We do also have permissions for some level of investment but seed rounds are going to be too illiquid and longer-timeframe. We might not have the funds we need to stay operation before we can exit investments in startups.
Always been clear on trying to steer CityDAO away from active investing/trading because then the entire goal and point of the DAO shifts.
Yes we need revenue but this should be from our own land and property not speculation.