What is a DAO?
A DAO, or decentralized autonomous organization, is an online-based organization that exists and operates with no single leader or governing body. DAOs are run by code written on a blockchain like Ethereum (ETH) and are owned and operated by the people who use them.
There are many different types of DAOs, but they all have one thing in common: they are decentralized, meaning that decisions about the organization’s future are decided by the collective group and not a single individual.
This decentralization is what makes DAOs promising, as it theoretically removes the possibility of corruption or manipulation by a single entity. Smart contracts (and not people) execute the terms and conditions of the organization, making them incredibly efficient and resilient to change.
How does a DAO work?
A DAO is a collection of smart contracts that live on the Ethereum blockchain. These contracts interact with each other to form the organization. They are written in such a way that anyone in the world can use them.
The code for a DAO is public, and anyone can view it to see how it works. This transparency is one of the key features of a DAO. Compared to traditional organizations, DAOs are much more efficient because there is no need for a middleman or central authority.
Another key feature of a DAO is that it is autonomous, meaning that it can operate without human intervention. This is made possible by using smart contracts, which can automatically execute tasks according to the programmed rules.
DAOs are self-governing and self-sustaining, meaning they can continue to exist and operate even if the original creators are no longer involved. This is another advantage of using smart contracts. They ensure the DAO continues to follow its original rules even if the people running it changes.
Some of the most well-known DAO tokens and platforms are Uniswap (UNI), Aave (AAVE), Compound (COMP), Maker (MKR) and Curve DAO.
Steps to raise money from VCs after incorporating a DAO
Write a white paper
After incorporating your DAO, you will need to write a white paper. A white paper is an essential document that explains what your DAO is, what it does and how it works. It should be clear, concise and easy to understand.
Your white paper will be used to convince potential investors to support your DAO, so it’s important to ensure it’s well-written and persuasive. To help you get started on writing your DAO’s white paper, check out our detailed guide here.
Create a pitch deck
In addition to a white paper, you will also need to create a pitch deck. A pitch deck is a short presentation that gives an overview of your DAO and its purpose.
Your pitch deck should be clear, visually appealing and easy to follow. It should also include information about your team, your progress to date and your plans for the future.
Create a website
The next step in raising money for your DAO is to create a website. Your website should be professional and informative. It should include your white paper as well as any other relevant information about your DAO.
It should also have a way for potential investors to get in touch with you. This could be through a contact form, an email address or a social media account.
Reach out to VCs
Once you have created a white paper, pitch deck and website, you can start reaching out to venture capitalists, or VCs. When contacting VCs, it’s important to be clear about your objectives and what you are looking for.
Some VCs may be interested in investing in your DAO if they believe in its mission. Others may be more interested in the financial return that investing in your DAO would give them.
Related: Venture capital financing: A beginner’s guide to VC funding in the crypto space
It’s also important to remember that VCs are busy people. They receive hundreds of pitches every week, so you need to ensure that your pitch stands out.
Negotiate terms
Once you have found a VC interested in investing in your DAO, you will need to negotiate the…
Read More: cointelegraph.com