Proposed Structure

Human buy a product → Human becomes a / (secured both domains already!) member automatically.
Once the company becomes profitable, the migration from a company to a foundation starts. Members can invest any amount in a specific window each year. Early-stage investors (VCs and Angels) will be offered an exit from a portion of the raised money (let’s say 25%), with preference to who committed the earliest. Valuation will be calculated based on a multiplier of the net profit (let’s say 10x).
Then, founders may gradually exit in similar fashion but after hiring and incubating a capable team to serve the community.
Shares != voting power. 1 member = 1 vote. Members verified via an anonymous KYC system.
Topic 1: Can’t market as an investment opportunity, have to be careful when selling to certain regions because the period pre-DAO till the conversion can come under a lot of scrutiny if sold to “retail” investors
Not planning to involve retail investors pre-DAO. If we feel the need to involve them anytime pre-DAO, we’ll launch a classic equity crowdfunding campaign.
Topic 2: Also once a DAO, if you show any relationship between the foundations profits and the value of the token then it will be considered an investment DAO which will require KYC of members etc and can’t be sold on most exchanges, even decentralized ones. Otherwise if you have a team running the “company” then regulators will come after them.
Wow, that’s crazy to think about! So, correct me if I’m getting it wrong: the government is turning a blind eye to orgs with a speculative nature and focus on the ones with profit multiplier in the smart contract? If this is the case, what is the alternative here? Just leave the market decide the price like stocks? Is there a way to do the profit multiplier while complying?
Topic 3: Pre-DAO I’ve seen recently the use of a points system for users, which is later converted into a token. The projects are usually very careful to not promise anything or to make claims that it’s linked to any future value. This is also after done by protocol that plan to be fully decentralized
Fair enough. This one will be done for sure, but thinking about how we can pair it with the ability to put extra cash as investment as well.
Topic 4: Also with DAO you have to think about the marketing, tech build-out / outsourcing, legal costs, and who is your target audience who will buy the token given your product audience is not crypto native
Since we’ll build this on top of the community that we’ll nurture in the first 2-3 years from our hardware and software products, so marketing and target audience shouldn’t be an issue at that stage.
Regarding the tech build-out and legal costs, do we have to build from scratch? I’ve seen some platforms that streamlined the process of establishing a DAO like Aragon, thirdweb, etc. Are they legit? Have you heard anyone who relied on them rather than building the stack themselves?
Want to print your doc?
This is not the way.
Try clicking the ⋯ next to your doc name or using a keyboard shortcut (
) instead.