After reading this, Iām a bit concerned that the Fundraising HUB is attempting to bite-off more than it can chew, especially given it is only 1 person?
The Business Model you are describing is essentially Investment Banking, i.e work as intermediaries between companies seeking to raise capital and investors who are willing to provide that capital. It is not only attempting to do this via the private markets, but also through relationships with Grants teams at larger web3 organizations.
Personally as a founder who raised in the $1,000,000+ range, thereās no way that I would consent to using the Fundraising Hub with such exorbitant and seemingly predatory percentages.
Letās assume for. instance I land a small <$10k grant from x Protocol after you review my application. I am now required to give up 24% of this?
Internationally there is a business model whereby an investment network will charge a 20% fee for any intros it makes if that lead to investments. In the US, that system is illegal due to its predatory nature and we were advised by multiple firms to be wary of these āIāll help you fundraise, just pay me a percentageā programs.
Investment Banking is held under strict regulatory guidelines to ensure it does not replicate that model.
To make this OKR even stronger, it may be helpful to add more specific details or metrics to the KR. For example, instead of just saying āPerforming outreach,ā the KR could specify a target number of outreach activities (e.g., contacting 50 grantmaking organizations, 20 venture capital firms, and 10 angel investors). Similarly, the KR related to the database could include a specific target for the number of grant programs or funding opportunities added to the database over a given period of time.
Overall, I think that there needs to be more of an emphasis on relationships with Grant giving organizations, with direct channels between D_D members and those organizations established. I also think the resources like the Friendly Funders Report are in need of a revamp as they contain 5 that simply acknowledge āno grants programā, and none of them contain links to the grants. I think the https://airtable.com/shr86elKgWTSCP4AY/tbld93rVIguyQLORG looks great and would love to see a blend of the two.
Overall the proposal as it stands can not be introduced. It requires a significant make over. I will halt it in the main post.
Iāve been working with several D_D Founders from January off-season through season 2. Originally that was a part of the efforts to make the fundraising hub sustainable. After working for 10 different founders I helped them to polish their application, refocus business development, help design their pitch decks and help them create founders videos (with few I am still doing it). As a whole the process is slower than I would have liked and after getting more insights into the grants that are being provided for projects the amounts are not sufficient to pay for the salary long-term in the proposed model. Hence I think the proof of concept failed on the efficiency part here so far and I canāt make it for free any longer.
Most grants seek to establish partnerships with projects that would build on them nearly exclusively to see a ROI on the money they invested into their ecosystem. The grants for projects which offer to expand to their ecosystem as an option are sometimes rewarded, but are not the ideal grantee that they are looking for. When they are rewarded, the amounts at this point of time are below 50k, most often in the range of 5-10k. The bigger ones are being offered to projects that proved themselves with smaller intro grants, have traction and clearly help to develop the chosen ecosystem. To get to this point Founder needs to not only have a solid idea with market fit, but also deliver on the milestones and build trust. All of that can take months. Bigger grants are offered in the Web2 space like EU NGI grants who can offer above 100k, but these require much more detail to fullfil and are very specific in their scope. I suspect the current reality stems from the uncertainty with global financial markets and bear crypto market. Gathering funding through private route offers much bigger rasing amounts, easily above 1M, but the projects that go for them need to show an extensive amount of development with their projects.
Founders that seek our support are mostly unexperienced and lack either a market fit or skills. This is the part where I am unable to help to a point where they would be satisfied with enough funding to develop their ideas. I can help make their ideas compelling and translate it clearly to grantmakers, but from an empty cup itās hard to pour some water. The founders that already have traction, users or revenue which the protocols mainly seek mostly donāt require our support, because they can find it in other sources who are more than happy to help them out, when they see an interest in the business idea. As a side note most founders were okay with the proposed fee structure. The only difference I would make is to count from cumultivate amount of funding raised instead of each individual funding.
For me to really help those projects out I would have to become a temporary team member and spend a lot of time discussing with them, proposing changes and helping to create additional materials. At the moment it seems to require too much time and brings little value back to the DAO. It gives a lot of value to those individual founders, but it is not being felt across our community.
As stated by @drop_knowledge it is illegal in U.S. to operate on the success fee with securities with private capital. With grants this could be viable only when grants are offered in a non-agreement manner, but itās still on the line. We can avoid illegal activity by providing a service of fundraising consultation which can be paid through a one-time payment, monthly, weekly, daily, hourly or similar as a service. The amount might be accepted upon with the knowledge of how much the project had raised, which is basically a workaround.
I am in talks with two protocols that would like us to disperse grant funding in their name. They are ready to pay for it with extra administrative fee for our community, but they put high expectations for such a partnership. They want high quality projects with very specific focuses f.e. a specific crypto niche area only for their ecosystem. The problem is that so far we had 57 projects submit a request for fundraising support to date and those protocols would like to fund somewhere between 20-40 projects and they expect that for Developer DAO community this is a low number, because of our good word of mouth marketing outside. At a current state I find their expectations unrealistic with the current state of our community.
I will finish working for the projects that I started working with, but I wonāt take new projects for fundraising management service. Maybe after finishing helping those projects out I will find a much bigger success in the end.
I will open a thread on the Discord channel with other Initiative Leads to brainstorm if we can pivot the fundraising hub into a better direction or if it should be paused altogether.
Overall I see a lot of demand for education about project and product development, marketing, community management, fundraising education, education on pitching, Pitch deck building, project budgets and financials both current and for forecasts.
I will take a look at the D_D Friendly Funders list for one last time and make it up to date. Seems like founders like this resource and I have more insights and needs with regards to every grant program that Iāve spoken with so far.
Are you up for a Jam session others about how we can fit fundraising into the evolving DAO experience before submitting an updated proposal?
There is some really cool work going on in the Labs team and I personally believe helping folks secure grant funding would be an important level in the game weāre all playing. I think there is scope here for this role not to be revenue-generating if we can make the margin work from the revenue brought in by Labs. That said, I believe there is plenty of room for admin feeās to be charged when running grant programs similar to the one you were discussing with The Graph to help make this more sustainable as well.
Did we follow up on this in discord? I could see your efforts being a service that we offer to help people refine their companies as part of agency paid to agency in code and you get a salary
With new conversations happeing as mentioned in previous reply and thus plans likely to change significantly after speaking with @Wikist have marked this proposal as archived