Start of Arbitrum M&A Working Group

[Bernard]

Summary: M&A Working Group Call #2 (March 27)

Thank you all for another productive working group call! Find below key items of discussion.

Telegram Group: Invite

Current working docs: Legal

Recording: Call #2 March 27 (access here still needs to be requested, Foundation is currently fixing this)

Looking forward to the next call!

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I. Main Discussions and Decisions

1. Legal Clarity for Equity Management

• We have set up a dedicated group with all relevant parties involved in these discussions (Foundation, Coinflip, Gaming Fund (Dan), AVI (Lino), M&A).
• Legal considerations are currently with Arbitrum Foundation which will get back when internal alignment is found to pave the way to operationalize the intitiatives mentioned above.

2. Operational Structure Exploration

• Discussed the v1 of an entity structure for Arbitrum DAO to hold and manage equity in an M&A construct
• Iterated on the legal structure in the call and discussed the need for further DAO steering bodies. I.e., structured management and reporting mechanisms to ensure DAO oversight, appropriate checks and balances between entities, and ultimate accountability to the DAO.
• Day-1 Idea would be a DAO-elected committee to oversee Management Company decisions and ensure GP accountability. With the set-up we need to strike a balance between maintaining confidentiality during M&A processes, while ensuring enough transparency for DAO engagement.

3. Strategic Target Exploration

• A first exercise to open the discussion for potential interesting strategic M&A targets for the DAO (full details below).
• Discussed potential collaboration with the ARDC on further researching strategic target areas for Arbitrum DAO.
• See the full Mural Board as a first attempt at identifying potentially interesting M&A targets for Arbitrum.
• The categories of types of M&A opportunities for Arbitrum were considered:
  • Complemetary Infra
  • Applications as L3s for Arbitrum Orbit
  • Talent / Acquihire
  • Other L2s / Consolidation
  • Ecosystem Development
• The following targets were of most intrigue:
  • Marketing Company (4 votes): as a potential acquihire, a marketing agency that is versed in web2 and web3.
  • BD/Partnerships (3 votes): to encourage strategically important projects to build on Arbitrum.
  • API/RPC Provider (3 votes): an infrastructure provider as a potential acquihire.
  • Stablecoin Issuer (3 votes)
  • zk Tech (3 votes)

II. Next Steps

1. Entity Structure: Refine entity structure with additional DAO steering bodies
2. Legal Workstream: Continue exchange with Foundation and other relevant parties
3. Collaboration with ARDC: Define ways to collaborate with ARDC on strategic target research and other topics
4. Review Omnbius Proposal: Review DAO Omnibus Proposal and assess if M&A group should be part of it
5. Target Areas: Take group exercise and turn into day-1 target view that is ready to be refined by other groups (e.g., ARDC)

CCing: @krst, @AlexLumley, @lino, @raam, @DisruptionJoe @stonecoldpat @cliffton.eth @coinflip @dk3 to keep you up to date.