Former Polychain Partner Charts Radical Course for New $125M Venture Fund

key takeaways

The “dao5” fund will target seed and pre-seed stage startups and sports a host of high-profile crypto names among its advisors
Participants, including the founders of portfolio companies, will eventually receive a stake in the VC firm’s profits through DAO tokens

These days, nine-figure venture capital funds are a dime a dozen, but the latest spin on the VC model from Tekin Salimi is that it should morph into a DAO.

Salimi, a former general partner at Polychain Capital, says his new fund, dubbed “dao5” has raised $125 million from crypto-native investors, earmarked for seed and pre-seed startup rounds. His plan is to help incentivize the founders of the fund’s eventual portfolio companies by giving them direct participation in the dao5 fund’s success through a DAO (decentralized autonomous organization) structure using tokens that represent the fund’s profits.

This structure is novel in that it actually dilutes Salimi and his co-investor’s stakes, but it encourages the founders of the companies they back to collaborate in ways that benefit the collective as a whole.

“We believe that cross-pollination is essential to fostering a collaborative founder community,” a document outlining the fund’s principles states.

For now, though, this plan is very much still on the drawing board, and will only be implemented in roughly three years, after 70% of the fund’s capital has been invested.

Notable among the avowed principles is a respect for pseudonymous participants. The fund “works closely with pseudonymous advisors, and invests in tokens launched by pseudonymous founders,” the principles document states.

“We believe that individual privacy is an inalienable right in the cryptoverse. We do not invest in surveillance technologies.”

Among the advisors are a who’s-who of crypto executives, investors and builders, including Do Kwon (Terraform Labs), Emin Gün Sirer (Ava Labs), Ben Fisch (Espresso Systems), Ivan Soto-Wright (Moonpay), Meltem Demirors (CoinShares), and the pseudonymous 0xb1 (founder of Fodl and an NFT curator) and Cuckqueen (Femboy Capital).

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.