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A former partner at a crypto venture, Polychain Capital, Tekin Salimi, has completed a $125 million funding for seed investments. Salimi added that the fund will be converted to a fund-owned decentralized autonomous organization (DAO) in the future.
This is coming at a period when crypto-native investment DAOs and traditional venture investing are increasingly merging their activities. Top players in the industry are also leaving the giants in the industry to establish themselves on their own.
The fund was raised mainly from “crypto-native” investors, with Salimi bringing part of the invested funds.
Doa5 To Target Both Pre-Seed And Seed Stage Deals
The plan is for dao5 to target check sizes of between $500,000 and $2 million for both seed-stage and pre-seed stage deals. However, Salimi stated that changes may be made in the fund structure, and is considering giving the portfolio company a stake in the platform by converting the fund into a DAO.
“I think one venture capital ideal has always been to create a community of their founders,” Salimi commented.
He gave examples of incubators such as Y Combinator which has an illustrious alumni network. Salimi noted that it is always not easy to organize founders to work together, but DAOs unlock the financial incentives that make it possible.
The Fund Will Be Invested In Layer-1 Chain Infrastructure
The fund will be invested mainly in projects that specialize in layer-1 chain infrastructure, decentralized finance Fi), crypto-based social platforms, DAOs, non-fungible tokens (NFTs), as well as privacy technology.
In traditional venture capital funds, company owners can receive direct funding from venture capitalists. But DAO5 takes a different approach. It provides a grant of governance tokens to recipients. This governance token is made up of the future DAO of the funds. Governance tokens are also given to advisors and employees of the dao5.
Dao5 will be offering the project founders a certain level of risk diversification by pursuing a DAO governance structure. The firm noted that founders will be incentivized to ensure that they maximize their chances of success. The fund is expected to begin its transition into DAO by 2025.
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