Press Start Cap x Developer DAO Fellowship

Authors: @drop_knowledge (Ryan Gill, D_D), Steven Chien (Press Start Capital)

Summary

This proposal suggests initiating Developer DAO’s first Fellowship Program in partnership with Press Start Capital. The partnership aims to provide first checks, mentorship, and camaraderie to aspiring Web3 builders and entrepreneurs to bridge them to top accelerators, downstream investors, and customers.

Motivation

Press Start Cap :point_right::video_game::billed_cap: is a pre-seed Web3 fund founded by builders with exits. They invest in the “full stack” of Web3: from infrastructure & dev-tools to game studios to liquid NFTs.

Web3 is still in its early stages, and the gap between weekend hackathons and accelerators has widened with time. The Press Start Fellowship is an opportunity to seed the next generation of Web3 builders at Developer DAO. The fellowship provides its fellows first checks and a structured program with experienced founders, enabling them to gather feedback and iterate their ideas before they reach accelerators, investors, and customers.

Scope of Work

Domain of Operations & Team

Domain: Entrepreneurship, Fundraising

Fellowship participants receive

  • First check ($15k) using YC’s MFN SAFE and a token side letter. This SAFE only converts to equity if and when the fellow raises a round or joins a future accelerator within 12 months of issuance.
  • Mentorship from builders who’ve walked the walk.
  • Accountability of building and shipping alongside peers in 6 week sprints.
  • Safe space to experiment alongside like-minded Web3 builders.
  • Perks such as company incorporation, priority banking, free merch store, discounted legal, discounted API access, etc

The fellowship is open to the larger Developer DAO Community, and is not restricted to members. If any non-members are selected for the fellowship, Developer DAO will provide them a sponsorship of 400 $CODE to admit them into the DAO. $CODE allocation covered in Budget Request.

The Press Start Fellowship team will focus on providing first checks ($10k-$20k) to ambitious Developer DAO members, running day-to-day operations of the Fellowship, bringing in experienced mentors who have walked the walk, and connecting fellows to downstream accelerators/investors. The Developer DAO team will collaborate with Press Start Capital and partner organisations to execute cross-marketing to attract fellowship applicants, assist fellows on PR/marketing, join top accelerators, and raise new fundraising rounds.

The Team:

Developer DAO

@drop_knowledge:

  1. Has been with Developer DAO since 2021
  2. Currently one of the DAO’s Governance Stewards
  3. 2x Founder in web3, successfully raised $3M venture funding
  4. Prior experience working at a startup accelerator

Press Start

Steven Chien

  1. Co-founder and GP of Press Start Capital
  2. DeFi and NFT advisor
  3. Serial founder with multiple exits; raised $30M+ as a founder
  4. Co-founder at PRIMA Cinema, Growth & UX lead at DivX, Techstars, United Talent Agency, etc.

Luke Xie

  1. Co-founder and GP of Press Start Capital
  2. NFT advisor
  3. Founder of MIT Beaver Blockchain group
  4. Extensive operational experience at McKinsey, Airbnb, Walmart, CODA Automotive, etc.

OKRs

VIBE
O1 Support and grow the DAO’s community of Entrepreneurs Owner
KR Channel for fellowship recipients within Developer DAO’s discord @drop_knowledge
Developer DAO to provide operational as necessary (e.g. company incorporation support, etc) @drop_knowledge
KR Two twitter spaces announcing the program to generate interest @drop_knowledge, Press Start
KR Fellowship to be advertised during weekly Dev N Tell interviews, as well as connecting with prior Dev n Tell participants. @drop_knowledge
KR Meeting with the D_D Agency team to educate them on Fellowship opportunity and encourage projects to apply for fellowship @drop_knowledge
LEARN
O2 Provide DAO members the opportunity to learn from successful founders Owner
KR Fellowship kickoff intro (30 min), Fellow ice breakers (30 min) Press Start
KR Product AMA with speaker (60 min) Press Start
KR Growth AMA with speaker (60 min) Press Start
KR L1/Technical/etc AMA with speakers (60 min) Press Start
KR Demo day practice with Fellows (60 min), Demo day practice with mentors Press Start
KR Demo Day (90 min). Fellows are expected to present a proof of concept, demo, prototype or working product. Press Start
KR Blog Post recapping the program, including interviews with the fellows and learnings from this initial program. @drop_knowledge
BUILD
O3 Support DAO members ton their journey to become entrepreneurs Owner
KR 8 Accepted Fellows @drop_knowledge, Press Start
KR 50% Acceptance rate into Accelerator or funding round within 6 months @drop_knowledge, Press Start

Budget Request (Including value returned to the DAO)

Press Start Capital is paying Developer DAO $5,000 via USDC to cover operational expenses of the fellowship program.

Ryan Gill: Developer DAO to pay @drop_knowledge 2000 $USDC (40%) and 600 $CODE to manage the fellowship marketing effort, application management, recruiting, podcast/spaces, blog post, and fellowship community.

$CODE Rewards for accepted Fellows

8 Fellows, each receiving 400 $CODE regardless if already a member of the DAO.

400 x 10 = 4000 $CODE

Total $CODE Requested = 4600

Drawbacks

This is an MVP Program, and so there are plenty of learnings to be had in regards to running the fellowship program.

Due to this being open to only 6-10 selected fellows, the exposure to mentors and expertise will only be available to a few members of the DAO.

This program will reduce the DAO Treasury by 4600 $CODE.

9 Likes

Overall supporting this, questions include:

  • why Press Start?
  • future plans if this goes well?

@stewards

Great to see this live @drop_knowledge - will have a proper read tomorrow :saluting_face:

Curious what happens when a project raises? 7% to Press Start? Some more info around this would be appreciated!

Edit: raises within 12 months.

1 Like

Don’t remember any other similar proposal. More of it would be great.

1 Like

To me seems like a good opportunity to our members. In the future I am keen to help it grow, if more work is necessary. For the time I am happy to see it going.

2 Likes

I love this. The more we can support builders in the DAO in meaningful ways to take their ideas, make them a reality, and scale them up, the better.

Adding to @pbillingsby.eth s point, I wonder if there are any reference materials/articles that explain how SAFE token letters work to help folks understand the concept better.

Any further info on the selection criteria would be cool too!

Thank you for bringing this opportunity to the DAO :saluting_face:

1 Like

Great question, there are a few reasons why we felt Press Start Capital was the ideal partner to do this with.

  1. Proven Track record in designing and operating fellowship programs.

    • Prior to approaching Developer DAO, Press Start collaborated in the design and launch of OrangeDAO’s fellowship program.
    • Based on what we read and conversations with the OrangeDAO team, it was clear that they would be a great partner to work with. Here are a few resources that covered the OrangeDAO program: announcement, recap, and podcast.
  2. Alignment with Developer DAO’s Values

    • The Press Start team approached Developer DAO because they recognized the potential for our members to make a lasting impact on the advancement and adoption of web3, by supporting builders in their journey to become entrepreneurs.
    • They demonstrated their intention to support DAO members by structuring the $15k as a grant. This way fellows do not feel pressured to return any funds if they do not go on to raise a subsequent round.

Press Start made it clear to us from the beginning that they intend for this to be a long-term relationship. From our perspective, they bring exactly what Developer DAO needs to its mission to support members on their journey in web3.

3 Likes

Great question!

I’ll give a quick overview of funding in general.

What is capital?
Capital refers to the financial resources that a startup can use to fund its operations. Think of capital as the lifeblood of a startup. It pays for recruiting and retaining talent, server costs, legal fees. Startups look to raise funding when they need additional capital to get off the ground, fuel their growth, and achieve their business goals.

Raising Capital
Startups can use a Simple Agreement for Future Equity (SAFE) as a financial agreement to raise money from investors when seeking funding. When someone invests in a company through a SAFE, they’re giving a startup money now in exchange for the potential to own shares in the company in the future.

The exact terms of the agreement vary, but generally, the company will promise to issue them shares of stock in the future when certain conditions are met, like when the company raises more money or goes public.

One of the benefits of a SAFE is that it’s usually a pretty straightforward agreement with few legal complexities, so it can be a quick and easy way for startups to raise money in the early stages.

D_D Fellowship Example

A D_D fellow receives $15,000 from Press Start Capital (PSC) using YC’s MFN SAFE and a token side letter. This money belongs to the Fellow, and there is no requirement or expectation for this to be repaid in the event the fellow does not raise a round or join an accelerator within 12 months. The MFN clause guarantees that Press Start receives the best terms and conditions of the subsequent funding round. By being the first investor to commit funds to a Fellow, Press Start believes it fair they get equal terms (MFN) as the later investors who commit funds after them.

Let’s say one of our fellows goes on to raise $1,000,000 in funding from venture capital, in exchange for 10% of their company. With these two numbers, we can calculate the startup’s post-money valuation aka the company’s estimated worth after outside financing and/or capital injections.

Post-money valuation = total amount raised ÷ % of ownership sold
$1,000,000 ÷ 10% = $10,000,000

Because of the MFN clause in the original SAFE, Press Start will also receive equity at the same post-money valuation. Ownership Percentage is calculated using the following formula:

Ownership percentage = (Investment amount / Post-money valuation) x 100%
($15,000 / $10,000,000) x 100% = 0.15%

So, Press Start’s SAFE would convert to .15% equity ownership.

3 Likes

This is by no means an exclusive deal. Is it? In other words, the following statement is true:
Any other of-similar-profile entity can sponsor fellowships under the same terms.

Are you open to manage any other such efforts within the same infrastructure or it would necessarily be the case that a new proposal and project will have to be established for any other partner?

There are risks associated with the US jurisdiction and the power asymmetry (dev - well capitalized silicon valley firm). Can the DAO secure independent legal advice for the fellows if need be?

In the absence of any selection or eligibility criteria, a minimum a cap on externally sourced fellows would be nice. 50/50 is reasonable. It’s not that 10/10 external is likely, but the fact that it can happen is in purely transactional terms against the interest of the current membership.

This is a W in a dooming market and fits the profile and capabilities of the D_D.
Will likely vote for and even potentially apply if eligible.

2 Likes

Thank you mate! This makes much more sense to me, and hopefully others now!

1 Like

Great observations here.

This partnership is meant to serve as the MVP for what will become a much more structured SubDAO focused on managing and supporting partnerships with venture partners. It is definitely something I would like to continue operating and building a team around.

The details of that subDAO will be proposed at a later date. I do see an opportunity to give DAO members access to experts that can at the very least give entrepreneurs guidance as they consider relationships with venture capital.

Regarding the cap on outside members, this is something we can definitely consider moving forward. I’ll make sure to include a way for applicants to confirm if they are a D_D member or not in the application so that we have those numbers and can take that into consideration.

Please try to be transparent about the process to select the projects.
I support the proposal.

After reading the proposal above. I believe Ryan has done his complete due diligence to best of his abilities.

I support the proposal.

2 Likes

This proposal is now live on Snapshot for voting.