What is DAO?
A DAO, or decentralized autonomous organization, is an online -based organization that exists and operates without a leader or governing body. DAO is managed by code written in a blockchain like Ethereum (ETH) and is owned and operated by the person using it.
Abide various types of DAObut they all have one thing in common: they are decentralized, meaning that decisions about the future of the organization are decided by a collective group and not a single individual.
It is this decentralization that makes DAOs promising, because theoretically eliminating the possibility of corruption or manipulation by a single entity. Intelligent contracts (and not people) enforce the terms and conditions of an organization, making them highly efficient and resilient to change.
How does DAO work?
DAO is a collection of living intelligent contracts in the Ethereum block. These contracts interact with one another to form an organization. This is written in a way so that anyone in this world can use it.
The code for DAO is public, and anyone can look it up to see how it works. This transparency is one of the main features of DAO. Compared to traditional organizations, DAO is more efficient because it does not need intermediaries or central authorities.
Another key feature of DAO is autonomy, meaning it can operate without human intervention. This can be done by using intelligent contracts, which can perform tasks automatically according to pre -programmed rules.
DAO is self -contained and self -contained, meaning it can continue to exist and operate even if the original creator is no longer involved. This is another advantage of using smart contracts. He made sure the DAO continued to follow the original rules even if the person running was changed.
Steps to collect money from VC after joining DAO
Write a white paper
After joining DAO, you need to write a white paper. A white paper is an important document that explains what your DAO is, what it does and how it works. It should be clear, concise and easy to understand.
Your white paper will be used to convince potential investors to support your DAO, so it’s important to make sure it’s well written and persuasive. To help you get started writing a DAO white paper, check out the detailed guide here.
Make a pitch deck
In addition to white paper, you will also need to create a pitch deck. The pitch deck is a short presentation that gives an overview of the DAO and its objectives.
Your pitch deck should be clear, very good and easy to follow. You should also include information about your team, your progress to date and your plans for the future.
Create a website
The next step to raising money for your DAO is to create a website. Your website should be professional and informative. You should include your white paper as well as other relevant information about your DAO.
You also need to have a way for potential investors to interact with you. This can be through a contact form, email address or social media account.
Get to the VCs
Once you’ve created a white paper, pitch deck and website, you can start approaching a venture capitalist, or VC. When contacting a VC, it’s important to be clear about your goals and what you’re looking for.
Some VCs may be interested in investing in your DAO if they believe in its mission. Others may be more interested in the financial returns that will result from investing in your DAO.
It is also important to remember that a VC is a busy person. He receives hundreds of pitches every week, so you have to make sure your pitch is visible.
Once you find a VC who is interested in investing in your DAO, you need to negotiate the terms of that investment. This includes the amount of money the VC will invest, and the equity shares that will be received.
It is important to remember that you are in a strong position when negotiating with a VC. After all, they are the ones who want to invest in your DAO. So, you need to target terms that are relevant to you and your team. This includes acquiring a large and high value equity stake for your DAO.
Close the deal
Closing the deal is an important step in raising money for your DAO. Once you have negotiated the investment terms, you need to close the deal. This includes signing a contract with the VC, as well as receiving the agreed amount of money. It is recommended that an attorney check the contract before you sign it.
Use the funds
Once you close the deal and accept the investment, you need to use your money wisely. This means spending in a way that will help your DAO achieve its goals. Some of the things you can use your money for include hiring employees, marketing DAO and developing new features.
It’s also important to remember that you need to report back to your VC about how you used your money. Therefore, make sure your costs and progress are all tracked correctly.
Eventually, you have to pay back the VC. This could be through the sale of your company, an initial public offering (IPO) or other exit strategy. VC repayment is an important step in the DAO life cycle. This is also a great way to show that you are committed to your business and have faith in the future.
Can DAO replace VC?
Is DAO a viable replacement for venture capitalists? The answer depends. VCs typically invest in early -stage companies and help them grow through capital providers, mentoring and connections.
DAO may provide some of the same services, but is not suitable for investing in early stage companies. This is because DAO is decentralized and cannot make decisions quickly and decisively.
VCs, on the other hand, are centralized and able to make quick decisions that help a company in its early stages of growth. So, while DAO may provide some of the same services as a VC, they are not a perfect replacement. A VC may be a better option if you are looking for an organization to invest in an early stage company.
The future of traditional DAO and VC hybrids
DAO is a new and innovative way to manage people and resources. Although it may not replace traditional VCs, it may disrupt the industry.
We will be able to see a future where DAOs and traditional VCs work together to support early -stage company growth. For example, the DAO can provide capital and resources while the VC provides guidance and connections.
The hybrid model will allow early -stage companies to achieve the best in the world: the capital and resources they need to grow, and the guidance and connections they need to succeed.
VC DAO already exists, proving that the model is feasible. One example is LAO, DAO venture capital. Focus on early stage blockchain projects based on Ethereum (ETH) and has funded more than 30 projects to date. The way it works is that the government remains a blockchain function while external service providers take care of administrative and legal procedures.
Other good examples are MetaCartel Ventures, a private VC DAO and a spin-off of Ethereum’s ecosystem grant fund, MetaCartel. The VC DAO arm is managed by a board of “witches”, which perform functions such as providing investment proposals, diligence and selecting proposals. He primarily funded the current early stage decentralization applications and protocols.