interesting proposal.
Let’s fly over for now on the mention of the stip results which, to me, seems like not that relevant in here as introduction.
Idea here from what i read is to setup the basis, through a potential 15M initial capital + 1.5M opex + 1M arb in bonus, to create basically create the capco we have been speaking about for the last 6 months here and in other meetings. Executor would be farstar. It would include the legal setup of the entity, the comp of the team including bonuses.
The long term plan is to have this consolidated toward a span of 6 years, with up to 1B in capitalization.
All of this should come under the oversight umbrella of the DAO, through a committee/council/etc.
Posting this to first have a sense check if i got the high level idea.
Assuming I did, few consideration on my side, totally personal.
In this proposal, I think there are several gaps.
- The main driver/thesis. There is, to me, a big difference between GCP and this. In GCP, the overarching goal is to push games in web3 and specifically in arbitrum, with a detailed thesis hopefully coming in the short period that will dictacte what type of investment will be done. In here, as far as I can tell, the driver is to have the ability in the DAO to invest through several programs such as incubators and others. I don’t think the idea is inheretely wrong, but is not as scoped as the GCP in relation to directo growth of the ecosystem, of Arbitrum. To be more blunt, we are in a moment in which we are literally trying to figure out how to do incentives in a way that makes more sense for us: I have some difficulties in thinking about us doing investments without first crafting a specific rational behind not really the why (is likely a mix of: making money, support growth in arbitrum, expand the reach of arbitrum through weaponization of the dao’s treasury as vehicle that can give back not only, hopefully, more capital than what was in, but also innovative implemented idea, kickass builders etc) but the why we want to do it through ventures and not in other ways
- The structure. This is the start of capco, which i am not against. I am actually in favor. But is following a different path from the opco. Specifically in here we will have farstar working on setting up the capco and signing a 1y exclusivity deal. I am not sure this is in the best interest of the DAO: is the DAO that would have to come up with the CapCo and potentially hire farstar as service provider. I also understand that this initiative should be spearheaded by someone and makes sense for you to come forward, but, here, you are both setting up the initiative and proposing yourself as service provider. The checks and balances on top should be not only broadly discussed but maybe written down by a more independent party, otherwise the risk is just to tailor too much the initiative itself (which as any initiative should be an expression of a dao need) to the skillset and ability of farstar. Which again, is not necessarily wrong, but is worth exploring in a broader way.
- The timeline and deal. We have a 6y forecasted plan, but an initial 1y exclusivity clause. Not saying I am against, saying numbers feels wacky in this way, because you are proposing here a 1B+ capital in 6 year, but with a 1y exclusivity with 15M which is 1.5% of the sum planned. Feels like there should be more alignment between the timeline, the exclusivity, and the capital deployed during the exclusivity phase. Exclusivity when we only have this low amount committed doesn’t feel like a robust deal.
To sum up: i am not against the initiative per se. I think it could be better aligned with the direction the DAO is taking (see opco, gcp, in which we basically source ceo/general partners/etc and then plug in people and service providers) and be more robust. In an extreme example, what would it happen for example if farstart, after 1y, decides to not renew the deal because another dao comes and wants to effectively have the exclusivity?
Also, knowing that we are currently figuring out incentives and setting up the opco, is it the exact time to set capco up? Likely is worth starting to talk about this in a broader way. But the way this temp check is posed, it feels like we want to push it right out of the gate, assign a mandate and start scoping the initiative. I am not totally sure this is the exact time to do so, and maybe i am obviously wrong here.
In general I might be just jumping the gun here, not understanding that you indeed want a structure similar to OpCo in which you are service provider. And I might have been jumping the gun on a lot of things, so please let me know if i misinterpreted anything here. Remember as usual, I am just a cow.