Understanding Our Structure

The goal is trust

The main goal of our structure is to instill trust.

In venture capital, trust can come from the investor and the entrepreneur being in the same social network, or in the same geography, or the investor being able to monitor and influence the company via a board seat.

We can’t assume any of these things. And so while we can’t eliminate fraud or misappropriation, we use three tools to mitigate risk:

• Treasuries with investor oversight: when an entrepreneur raises funds on MetaDAO, the funds don’t flow directly to them. Instead, they’re held in a treasury. Investors may be able to claim a portion or all of the funds back under certain circumstances.
• IP held in an investor-aligned entity: when an entrepreneur raises venture capital, they generally need to assign the key intellectual property - the copyrights, code, social media accounts, domain names, etc. - to the company. The same principle applies here.
• Performance packages: normal companies are extremely illiquid. So it’s fine for an entrepreneur to start off with all of their shares, or to vest them over a few years. There’s less risk of pump-and-dump or a founder getting too rich early and losing motivation. MetaDAO companies are liquid, so to mitigate this risk founders earn their stake over time and as they grow the business.

Large decisions - spending beyond the monthly budget, diluting investors, wind-downs - go through governance.

MetaDAO is still an early system and everything is subject to change. If you’re a founder or an investor, and there’s something about MetaDAO’s structure that holds you back, we would love to hear your feedback: reach out.