Quick take:
- Algorand and Near Protocol are among the investors backing an $80 million DAO fundraising.
- The funds were raised by Orange DAO an organisation founded by Y Combinator Alumni to invest in crypto startups.
- Decentralised autonomous organisations (DAOs) are investment entities where members participate in decision-making through a blockchain-based voting mechanism.
Orange DAO has announced the successful completion of an $80 million fundraising backed by layer-1 blockchains Algorand and Near Protocol. Orange DAO is a decentralised autonomous organisation (DAO) comprised of Y Combinator Alumni. The DAO is raising funds to invest in crypto startups.
DAOs have become an exciting avenue for groups looking to invest in the crypto space due to the blockchain-based voting mechanism that allows all members to participate in the decision-making process.
DAOs are limited to about 100 members according to the Securities Exchange Commission (SEC) rules to operate as an investment entity. However, Orange DAO boasts over 1,000 Y Combinator Alumni.
The organisation has launched an associated venture fund, allowing it to exceed the capacity set by the SEC for an investment group.
Speaking to Tech Crunch about the fundraising, Orange DAO general partner Ben Huh said: “They wanted to support our mission of bringing more entrepreneurs into web3. For them, working with us and getting exposure in front of our entrepreneurs is really important, because if one of our members builds a billion-dollar DeFi protocol, the investment that they made in us is trivial compared to the amount of upside that they get from it.”
The fundraising was also backed by an undisclosed number of DAO members and a few institutional investors Huh said.
According to Huh, the group has planned to raise $10 million to back Web3 startups. However, it has since grown to 1,300 members up from 1,000 members in January and backed more than 90 startups, up 60 over the seven-month period.
On average, Orange DAO writes $100,000 checks to each startup, with “crypto cap table management service Liquifi, decentralized credit platform Goldfinch and crypto payments tool Spritz,” among the beneficiaries of the fund.
Orange DAO has managed to grow its membership to over 100 by operating the fund separately from the DAO. According to Huh, the DAO acts as a “[platform] for entrepreneurs to apply for funding,” leaving the fund to identify and assess investment opportunities in the crypto space.
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