TL;DR
Web3 companies have overcome fundraising challenges of 2018-19 given the broader acceptance by institutions. Also, with the decentralised and composable nature of Web3 companies, Venture partners are contributing more than capital to their portfolio companies. This model has been evolving through community investment DAOs and crypto native funds the last few years and is seen to 10x in the future. MetaCollab will work with dApps and protocols to contribute to the growing Australian crypto community.
Venture Capital was primarily a domain of few wealthy families post WWII. As people’s wealth increased and regulations improved, multiple individuals pooled their money into a fund to invest and advise their companies. The ability to pool capital and contribute experience to portfolio companies continues to improve, as more wealth is created from tech and tooling like AngelList become more available. This is even more so the case in crypto where financial organisation is very easier through a DAO, to the point where teams expect more contribution from the Venture partners than just their funds.
Web3 is built on the ideas of Open Source and decentralisation which makes it easy for technical researchers of investment funds to contribute to other their portfolio companies. 2021 had a great story where Sam Sun, a Paradigm researcher, prevented a $350m protocol hack for SushiSwap - which is not even portfolio company of theirs. But more generally, Paradigm is known for making technical design contributions to portfolio company such as Compound Protocol. Apollo capital also supports their infrastructure company such as Pocket Network by running nodes for the network. But contribution doesn’t have to be hard core research or product related as solo investors Not3Lau Capital contributed at a more operational level with product testing and business partnerships. These fund are why venture contributors are becoming more of a trend in the space.
This may only the start of the trend as someone like @cobie mentions it in his 2022 outlook. He has been in crypto for a decade and has helped build Lido Protocol which is one of the biggest projects on Ethereum. With his insight into the ecosystem he says “the venture contributor model is going to 10x in the future as DAOs will demand more contribution from Institutional investors”:
Scaling this model is challenging and shown to evolve to a point where each institution specialises in their own field. It is challenging for funds to have a 1 to 1 relationship with their portfolio companies, that’s why institutions either specialise as funders, advisors or technical researchers in Web2. Although, 1-1 relationships maybe more achievable in web3 because of the open and composable projects, especially at the early stages of the ecosystem.
MetaCartel is an example of a successful Venture Contributor and one we look up to. Building on the learnings of The DAO and Moloch DAO, their experiment with a grants DAO evolved into a for profit DAO which is made up of crypto natives contributing to other crypto native projects. The precedence they have set with their process and principles is one we look to adapt.
Metacollab will figure out a way to help crypto natives companies instead of just asking “how can we help”. Based on talking to crypto native founder and working in DAOs Metacollab will be an active participant in governance, run nodes if necessary, onboard users where possible, help with product testing, collab with LPs who can review smart contracts, share the vision with other investors, all with a long term outlook of the token price. This is a challenging undertaking but one that keeps up with the founders vision.