Hey Daos, are risk capital providers your friends?

The way in which Daos work compared to traditional start-ups has inevitably changed the way in which risk capital providers finance web3 projects in the early phase, Hart Lambur, co-founder of the UMA protocol, told Blockworks.

"In the history of modern venture, the huge amount of raised risk capital has all used the same deal structures-but what we see is that Daos can actually get money in a completely different way," said Lambur.

"Dao's possibility to rewrite these rules in a way that we have not yet created," he said.

daos are primarily organizations operated by members. The majority of the existing DAOs today has one of two membership models: token-based membership and stock-based membership.

In the case of token-based membership-the most common form-the participants vote on important decisions, whereby the voice weight is directly proportional to the token ownership. In order to be really autonomous, these votes must carry out code directly on the blockchain instead of just signaling the intentions of the members on a topic that actually implement the developers (or not).

The stock -based membership is similar, but participants who want to become a member must first submit a proposal and approved before they join the DAO when shares represent voting rights and property.

Where does risk capital fit?

Franklin BI, director of portfolio development at Pantera, a hedge fund that focuses on blockchain-related projects, told Blockworks that a token-based membership often gives investors the same opportunity when building a position on the market.

"If you really believe in the minutes, express this conviction by the market by buying, then choose with the same conviction - it is a field for equal opportunities," said Bi.

The problem is often the early phase financing in a closed ecosystem or a DAO with stock -based memberships.

"Small investors cannot participate at this level [Early Stage], so it feels unfair," said BI. "I like to think that the compromise for the procurement of capital is also a hopefully high -quality participant in this ecosystem."

This assessment is shared by Andrew Jones, the head of growth and marketing at Web3 startup Index Coop, a collective that aims to create and maintain the best crypto indices on the market, who said that VCS definitely has a place in the Web3 ecosystem.

"There is a kind of hate love with communities and VCS, but I don't really think so," said Jones.

"We wouldn't be here - we would not work - if there was no fact that VCS had bought a token," he said.

"Governance is a process that starts with the founders, over time you build trust and a relationship, then you get a delegation and work towards decentralization and more autonomy, it doesn't happen overnight - it is a spectrum," added Jones.

Trust in risk capital providers can be justified for web3 startups in the early phase. In the case of later defi protocols (often enclosed with millions of dollars in their protocol), larger dealers who are often supported by risk capital and hedge funds-so-called whales-can have an excessive influence.

Marco Moshi, Dao director at Polygon, said in an interview with Blockworks in June that the greatest challenge in the token-based DAO government is that a community should not belong to the richest or those that have arrived before others.

"[The] The organization's stakeholders will probably change over time, and Daos should take into account that their organization will develop and the people involved will also change regularly," said Moshi.

Although this is sometimes the case, BI believes that these differences of opinion within protocols are actually quite normal.

"It is a déjà vu feeling, because if you enter a startup, it happens on most days. People are super passionate and argue with each other. The difference is that startups normally have a CEO that says everyone should go in a certain direction," said bi. "This is in the nature of people who like to take risks and do passionate things.

for BI as an investor is the most important thing that the protocol can develop and develop more independently.

"Good VCS recognize the value of the protocol in having the community on your side. If a VC sells everyone else out of the community, then shit itself," said BI. "So there is still a pretty good coordination with VCS and Communities."