The most advanced effort to build a decentralized autonomous organization (DAO) for professional venture capital investing comes out of stealth mode today. VC3 invests in Web3 startups by tapping into the networks and expertise of more than 150 members, all of whom are venture capital professionals and Kauffman Fellows, a VC leadership program with alumni representing more than 600 firms across six continents with $290B+ AUM and $8.5T+ in exits.
“The level of sophistication this group of VC investors brings to blockchain and crypto is phenomenal for the industry as a whole,” said Jehan Chu, managing partner of Kenetic Capital, who has been investing in crypto since 2013. “We’re able to pull in deal flow and best practices from more than one hundred firms to inform our investment process, and at the same time are rapidly educating some of the world’s best VCs on the nuances of Web3.”
VC3 DAO members all start with an allocation of $VC3 tokens when they are onboarded, then earn additional tokens for sharing dealflow, participating in due diligence, supporting the portfolio and serving on committees. Entrepreneurs are given $VC3 tokens in addition to the fiat investment, allowing them to tap into the network by using their tokens as bounties to incentivize introductions, advice and other support. LPs are also given tokens and have the opportunity to participate directly in the DAO, including a unique token-based coinvestment bidding process.
“The venture capital landscape is changing, and we need to change with it. We’re building a new model for investing based on the principles of Web3 and decentralization, which allows us to do things that are not possible in a traditional fund,” said Jules Miller, partner at Mindset Ventures and founding member of VC3. “The DAO tokens reward the people who actually create value and align incentives for investors, founders, LPs and our community as a whole.”
After starting in December 2021, launching privately to the Kauffman Fellows network in March 2022, and issuing $VC3 tokens to all members in June 2022, VC3 has now completed three investments from dozens already submitted by the DAO members. Investments are made through the adjacent VC3 Fund, managed by Mindset Ventures, with the inaugural fund expected to close at $25M. The Fund completes full due diligence, while DAO members vote as a signal to move the deal through each stage of the investment process. Compliance is a core value of VC3, so the Fund does a final vote on all investments with participation from a six-member General Partner Advisory Council (GPAC) who are all Kauffman Fellows.
VC3 invests globally and actively seeks out underrepresented founders, aligning with the Kauffman Fellows’ long standing leadership on DEI in the venture industry. “The tactical democratization and unbundling of venture capital enables more efficient allocation of resources to founders who wouldn’t otherwise be seen by the traditional VC landscape,” said Ramphis Castro, General Partner at ScienceVest and member of the VC3 governance committee. “This is the most exciting innovation in our industry since AngelList in 2010.”
About Mindset Ventures
Mindset Ventures is an international venture capital firm investing in early stage B2B software startups in the US and Israel. Founded in 2016 in Sao Paulo, Brazil, the fund also helps portfolio companies expand internationally, especially to Latin America. Mindset has invested in more than 60 startups, including Brex, Turing, Payjoy, Future Family, Priori and Rain. For more information about Mindset Ventures, visit mindset.ventures.
About Kaufman Fellows
Kauffman Fellows is the world’s premier leadership and venture capital-focused program with the largest and most connected network of investors in the world. Since 1995, Kauffman Fellows has accelerated the development and success of venture capitalists around the globe, supporting Fellows to navigate every aspect of innovation investing, from deal flow to public markets. For more information about Kauffman Fellows, visit kauffmanfellows.org.
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