About a year ago, @luis and I were walking in the forest contemplating the beauty and uniqueness of nature, the utter failure of humanity to live in harmony with it, and the destruction we’ve brought upon the very planet we live in (Luis recently let the frustration out in this blog post). We talked about the death spiral of outdated governments running the show, setting curriculums for how children get educated, and turning them into industrial-age zombies. We talked about how the society is failing to realise that pensions will crumble down sooner than anyone imagines. And we talked about the urgent need for a change. Not just another ‘cosmetic’ fix, but a deep, fundamental change.
We realised that the issues are so profound and so many, that lobbying through or instilling change on any of these individual, vertical problems will be purposeless. What is needed is a change in the very way societies organise and govern themselves: we need new nations.
Our initial thinking at the time was to set up a VC fund with a thesis of investing in cloud countries and the infrastructure required to make them possible: circles-based insurance, UBI DAOs, circular economy tools, meritocratic reward systems, on-chain dispute resolution systems, and more. Our vision was to start with a small fund to test the thesis, and then take a multi-decade, multi-fund approach to making this future happen. In fact, the original ‘Cloud Nation Ecosystem’ we sketched out in Figma was a Tech Tree we mapped out for the purpose of refining the investment thesis for the first and subsequent funds (as some especially attentive community members noticed!).
As we started talking to people we respect a lot in the space like Balaji, Albert Wenger, Santi Siri, Alex Lange, Max Mersch and many others, we realised that the vision and the thesis are much, much bigger than the fund: they were strong enough to create a movement of people who are equally committed to building this future, and an attempt at actually creating one of the first cloud nations: the Nation3 DAO.
This is how the idea for kick-starting the DAO was born. The launch was just extraordinary: many thousands of people subscribed to the Manifesto and became the first DAO members. We felt like the vision resonated with so many people that it reinforced the need for both this community to exist.
As the Nation3 DAO is well underway in organising itself to research, build and advance the goal of building the first cloud nation, the next logical step, in our view, is to establish the Nation3 VC as an independent entity with an aligned thesis, designed to help make this future possible by investing in the relevant pieces of infrastructure.
We both believe that the Nation3 DAO and Nation3 VC would be highly synergistic, if structured correctly. At the point in time when the DAO has successfully diversified part of its treasury, and is ready to deploy various strategies to maximise its financial returns, we would like to propose the establishment of a VC fund as one of such treasury strategies.
Our vision is for Nation3 VC to be the early stage investing partner of the DAO, structured as a fully independent legal entity with a traditional GP / LP set up. The reason why we think it’s important to keep it independent is to allow the fund to retain the investment decision making power, which is critical when making conviction-based, early stage ‘moonshot’ investments. Some of the best VCs in the world have argued that opportunities with biggest potential require conviction, not consensus:
“most interesting companies are often doing things that most rational people would too outlandish, too against industry norms, too difficult technically, too much regulation or similar. I can’t imagine most consensus-driven decisions would have thought Oculus, WhatsApp, Airbnb, Uber or DropBox would have been as massive as they have become.”
For the fund purposes, we’d likely keep the team very lean with Luis & I as the fund managers. At the point in time when it makes sense to turn this into a formal proposal we’ll of course share a more detail overview of our experience and investment track record, but to sum it up: I have been VC since the beginning of my career, and co-founded my latest fund, Fabric Ventures (one of the first Web3 funds in Europe, currently operating with close to $200m under management). Luis co-founded Aragon, and since then has been personally investing in more than 30 early stage startups with relevant ethos.
How do we envision the synergy between the DAO and the VC fund?
- The DAO can be the largest stakeholder in Nation3 VC, alongiside other (already committed) external investors that bring both niche expertise and brand to the table, inc. Balaji Srinivasan, Fabric Ventures, Ryan Selkis (founder, Messari), Michael Dunworth (Founder, Wyre), and other founders & builders like them.
- The DAO will help build a movement and a community around an infectious brand, helping refer dealflow to Nation3 VC
- The DAO will be able to crowdsource intelligence through its members, casting an unparalleled net in the cloud nation ecosystem, and assisting with due diligence by actually experimenting with products internally
- Nation3 VC would deploy the fund exclusively into cloud nation ecosystem, consistent with the Nation3 DAO Manifesto
- As Nation3 VC deploys its fund, including part of the DAO treasury, the fund will aim to bring outsized returns to the DAO and its members — something that is typically difficult to access for the wider audience due to restrictions on who can invest into VC funds. Allowing the Nation3 community to benefit from the success of the fund would also be consistent with the ethos.
To clarify, this is not a formal proposal to establish the VC fund — it’s mostly just us sharing the origin story behind the Nation3 idea, and an invitation for the community to comment & express thoughts on the potential of Nation3 VC. If the community is happy with this, and when the DAO is in the position of diversifying its assess in a healthy way, we can turn this into a formal proposal from Luis & me.
