Management of Fund 1 is conducted by a combination of smart contract controls and assigned parties that carry out specified duties.
While the majority of funds are kept safe at all times through the Fund Contract, the following parties establish checks and balances on each other to ensure transparent and honest behavior in actively managed capital.
The Stacker Ventures DAO will conduct the primary investment activities, including sourcing, vetting, and approving investments by the Fund Contract. This is a bit of an experiment and we will continue to build out these functions over time; however, it is worth noting that investors in Fund 1 retain full control through their ability to veto proposals, pause the fund, and dissolve the fund early if needed.
The Stacker Ventures DAO will facilitate the following functions:
Incentivize the sourcing of quality projects by community members
Appoint Investment Leads and conduct rigorous due diligence of applicant projects
Guide applicants through the funding process
Negotiate investment terms
Initiate an investment escrow function within the Fund Contract through STACK token holder votes
Compensation: The Stacker Ventures DAO will receive a 5% management fee to its Treasury. The treasury is controlled by STACK voting through Snapshot and/or the Aragon DAO framework.
Members of the Stacker Ventures DAO that hold more than 1,000 STACK tokens have access to a token-permissioned due diligence group. These members will be tasked with helping vet opportunities, guiding projects through the funding process, and proposing Fund 1 investments that the DAO then approves by vote.
Members of the Stacker Ventures DAO may be appointed as due diligence leads on applicant projects to guide the applicants through the funding process. Any individual member appointed by the DAO that takes the lead on an applicant project may be referred to as an “Investment Lead”. Note: there may be multiple Leads at a time, each focused on vetting different projects. It is up to the Stacker Ventures DAO to decide how and when Leads are determined.
Fund 1 investors (SVC001 Token holders) retain ultimate control of assets through the ability to veto management (pause the fund) or dissolve the fund early if dissatisfied with the performance of the fund or the contributions of the DAO. Investors may also choose to dissolve the fund early if extreme returns are achieved and a majority of investors wish to capture the returns.
In the case for any reason that tokens get stuck in Fund 1, a function has been built into the Fund 1 contract to initiate a decentralized governance rescue. The calling of this function will be limited to the DAO Council. The likeliness of this having to be called is very low and was built-in solely as a contingency (and purposefully hard to initiate as a worse-case only).