jakiro
Competitiveness comes from the perception of a sufficiently diversified network and leading markets in specific fields.
In the previous article, the characteristics, structure and the importance of building a member network are discussed.This article will thoroughly disassemble the daily operation of investing in DAO.The same sentence: There are many models for investing in DAO, and the content of this article cannot cover all models in the market.And even if the organizational pattern is similar, the specific operation details will be different for each DAO.
As a DAO, how do you invest and how do you advance specific affairs?
This is a question I have been asked 100% of the time in my past communications.
We usually rely on 3 tools.1.Discord, daily communication and use.2. Investment portal, this is a customized portal, which lists all project opportunities and displays them by stage (New, Active, DD, Voting, Closing, Archive).It is convenient for members who don’t have time to watch discord to quickly understand the current project opportunities and investment status.Portal also includes functions such as on-chain voting, net value statistics, fund changes, and voting statistics.3. Zoom, used to deal call and weekly meeting.
When a new investment opportunity arises, we will have a discussion on Discord for several days.If you are not interested, you will pass.If everyone is still interested, they will invite the founder to hold an online meeting and all members can participate.There is 2-3 days of discussion after the meeting, and DD will also happen during this period.If no significant differences occur after the discussion, a preliminary vote will be conducted on Discord to determine whether to make investments and investment amounts.Once a consensus is reached, the next step is to initiate a formal vote on the blockchain.After the vote is passed, funds can be unlocked and related paperwork work can be carried out.
The entire process is flat and relatively efficient, and can quickly respond to market opportunities.Of course, the saying that there are too many people and mixed things is also applicable. If most of the projects like, they will naturally be very efficient, most of them don’t like them, and they will also be very efficient.However, if there is a large disagreement, it means that there will be a long quarrel, and in the end it will often not reach a consensus, and some opportunities will be missed.But to be honest, I like the “noisy” process quite a bit. This is a collision of wisdom, and I often benefit from it.
The daily work of an investment institution is definitely not just about discussing and making decisions.Simple disassembly include:Fundraising, investment research, finding investment opportunities, due diligence, post-investment, exit.
Fundraising– It has been covered in previous articles. Investment DAO attracts members through targeted invitations, and each member must invest funds, so while building a member network, the fundraising is completed.To ensure that voting rights are not too concentrated, there are strict restrictions on the investment ceiling of individual members, which means that the total assets (AUM) managed by DAO are not large.
The AUM is not big, so the checksize in a single project will naturally not be too big.If you encounter a project that everyone is optimistic about but the minimum investment amount exceeds the acceptable range, we have a process to quickly start a SPV.DAO will participate as a funder of the SPV, while other funds will be supplemented by additional funding by members.Most members have additional funds and interest in participating in this type of investment.In this way, we can flexibly deal with various investment opportunities, and effectively expand the investment scope and impact even if the AUM is relatively small.
Investment research– No systematic workflow.However, DAO members have good research skills and have a unique understanding in their respective professional fields. There are often various discussions on discord every day, which can be regarded as a non-traditional form of investment research.Although it is not systematic, it covers a wide range of topics and in-depth analysis.For specific directions, we sometimes organize concentrated discussions, from technical research to industry development trends, and then to the analysis of various players in the track. This method relies on everyone’s professional knowledge and active participation, and has good results.
Find project opportunities– DAO members are mainly founders and investors from different fields, a considerable proportion of whom are deeply rooted in the Silicon Valley area, which is the center of this AI wave.This background allows us to access many projects, and so far almost all investment projects have been obtained through networks.However, the systemic and coverage of relying solely on networks has limitations.
As the portfolio gradually takes shape, we have gradually established a certain reputation in the AI founder circle, and the number of projects that actively contact us has increased significantly.For areas that are particularly optimistic, we will continue to express our opinions and investment theories to show that our opinions will attract more investment opportunities. This is a future plan and has not yet begun to be practiced.
There are also projects that are particularly interested in but no one knows, and they will take the initiative to contact them.However, this kind of project is generally the subsequent round, and it is often more expensive. We will only deploy a small amount of funds on this type of project.
Of course, only half of the projects can be found are completed. Popular projects are oversubscribed, which is very picky about investors.Most of the founders of the AI projects we are currently investing in have no idea what DAO is, but they are willing to leave some quota after chatting.This is because during the communication process, the other party can recognize the collective’s professionalism and diversified resources and background, which is attractive to the founder.
due diligence– Similar to investment research, it is carried out through collective discussion and feedback.
Post-investment management– There is an internal AI tool to track public information on all invested projects and provide weekly reports.In addition to tracking information, each invested project has a designated member responsible for communicating with the team.Our strategy is to try not to bother the founder as much as possible. We will only actively intervene and help when the team needs resource support or encounter obvious problems.Since each member has a field and connections that he is good at, this has led us to form a strong EIR-like (Entrepreneur resident) team.Relying on such resources, we have effectively helped the founders solve problems.
Exit execution– There are some basic strategies that everyone has discussed, but they are still in the early stages of the investment period and have not yet withdrawn from practice.
In addition to work directly related to investment, there are also some spontaneous virtual groups responsible for media releases, ecological cooperation, and organizing Portfolio and Friends annual gatherings.
This issue will be written first, and I will write another article later to talk about the challenges encountered and lessons and learn.
