**Listen (6:33:47 - 7:07:10)**

Speakers

Bo Brustkern

Twitter: @brustkern

Discord: BanklessDAO 🏴#7210

BanklessDAO

Carlos Pereira

Twitter: @cegapereira

BITKRAFT

Mel Oxenreider

Twitter: @emjicy

Discord: mel.eth#0001

Index Coop

Lou Kerner

Twitter: @loukerner

Discord: CryptoOracle#7248

Blockchain Coinvestors

Highlights

• State of the market
  • From the underwriting perspective, the idea is still to underwrite great businesses with a strong long-term potential and good risk adjusted returns.
  • The instrument tends to be different from the traditional rounds
    • There are still some equity rounds with token warrants, but
    • There is a skew towards a simple agreement for future tokens which is a variation of the standards YC SAFE
    • There is generally been an acceptance of lower official governance rights
      • no board seats
      • a normal voting token holder as everyone else (more akin to common equity than preferred equity)
    • True governance happens through the advice that investors give to the companies, the relationships they have with the businesses.
    • Tokens don’t have a claim to the assets of the business ⇒ it’s a different type of collateral that investors have to get comfortable with
  • Raising money for DAOs is about great storytelling
• Bankless DAO has raised venture capital
  • One raise: 10 participants, each around $1M
  • They raised money to diversify treasury ⇒ a unique challenge for DAOs
  • They have a native token, which is their coordination token/governance token, but they needed to pay contributors in a different manner
• A typical venture round would have a lead investor that would contribute 60% or more of the raise and the followers would contribute the rest.
• Two basic frameworks that categorize the token model
  • Assessing network value
    • Network value for single token models or for utility tokens
    • You are creating a digital sovereign and trying to create the maximum velocity of capital in that sovereign system. You are capturing tax on the economy and your main goal is to get the capital velocity moving to capture from a lot of transactions
  • The traditional governance route
    • A function of the ethos of web3 wanting the DAO to self-govern
    • A function of getting around the lack of regulatory clarity
      • It is really hard to assign cash flows to token holders without the risk of being deemed a security
• Misconception: everyone needs to vote and the more people who vote the better
• We are seeing a lot of innovation in DAOs, especially innovation in governance
• Investors’ perspective
  • It is a seller’s market.
  • It is hard to get in deals
  • There’s a ton of capital out there
  • There are not a lot of good deals
  • Not getting a preferred stake
• USDC are multi-purpose