Proposal Key Aspects
- Receiver Entity: CeLatam
- Status: DRAFT
- Title: CeLatam Venture studio
- Author(s): CeLatam team
- Type of Request: Funding
- Funding Request: Return of 347K Celo and receive $220K cUSD instead
When CeLatam was created, a venture studio was outlined as one of the initiatives it wanted to pursue. The approved budget in CGP 76 for this initiative was $280K, equivalent to 424K CELO at the time (the Celo price used for reference at the time was approximately $0.67).
Since then, the price of Celo has dropped to $0.3246 (moving average of the last 25 days). The DAO currency holds 347,676.89 Celo staked and 65K Celo deposited into Aave, that adds up to a total of 412676.89 Celo, equivalent to $133,954 at the time of writing.
In order to pursue the venture studio, without being exposed to Celo price fluctuations, we propose to return 347K Celo to the community fund and request $220K to guarantee the funding of the venture studio. Budget is reduced from the original number ($280K) to be mindful of current market conditions, with the philosophy of doing more with less. This is more than a 20% budget reduction, without counting for inflation.
Direct investment and/or no-strings-attached advisory will be given to startups focusing on LATAM that are already building, or have an intention to, build on Celo.
65K Celo will be kept for long-term incentive alignment with the Celo Community, to be deployed only after the budget in stables has run out. It will be used to vote on governance, stake for validators and provide liquidity on Celo, particularly on project focusing on Latam.
The DAO can not guarantee that the Venture Studio will be able to fulfill its originally stated goals, because the budget now it’s reduced significantly, exposed to Celo price fluctuations, and we believe it is a bad time to sell Celo to fund operations and investments. Instead, it makes more sense to use the cUSD available in the Community Fund (>2 million cUSD at the time of writing).
In contrast to creating a for-profit structure, the idea is to create a foundation/NGO/non-for-profit to advise and invest directly in LATAM startups building on Celo. The final legal structure will be defined after the funding is approved. Control of the new entity will be managed by a board composed of current CeLatam multisig signers, and this board can be rotated on request of Celo Governance or CeLatam. The board will not hold equity directly in startups, but operational teams will be entitled to fees and carry related to the investments or advisory they are involved in.
The remaining capital after an exit (discounting fees and carry) should be used to fund more startups, thus creating an ever-green, self-sustainable fund.
The DAO has been using the Celo it holds responsibly, by staking to elect validators (and thus getting rewards) and depositing it into Aave.
The proposal will send 220K cUSD to the CeLatam DAO multisig (celo:0x38DBAB5C651F352C8f5F765fDA292E9B92d850Ff) and will execute a transferFrom taking 347K Celo from the DAO multisig. The multisig would have previously executed an approval so that Celo Governance can execute the transferFrom and everything can be executed atomically (in a single tx).
Create a Web3 Venture Studio to launch the next gen of Web3 initiatives by: (i) helping expressive Web2 companies launch on Celo and (ii) nurturing native web3 initiatives.
Founders active on Celo community may play a joint role in this initiative: either by providing services, collaborating and/or other formats that we feel may further advance the Celo mission.
Countries and initiatives that are more mature and show product market fit will be prioritized. LatinAmerica is a vast region and while we have representatives of different countries and aim to further increase reach, initial actions will focus on more mature markets and initiatives.
Key metrics: scout and support 10 entrepreneurs building on Celo.
The DAO has been active since October 2023 with five team members that all have been involved for more than a year, and two since the very beginning.
The budget is ready to be executed. Legal advice has been received about the legal structures and jurisdictions to incorporate the venture studio in LATAM.
The CeLatam team is ready to start executing this budget right away.
4 weeks since approval: legal vehicle ready to execute, and formal internal governance processes in place.
8 weeks since approval: actively advising two seed or pre-seed startups.
16 weeks since approval: two investments of at least $5K each deployed into two seed or pre-seed startups.
At a maximum of two years since approval: all investment capital deployed.
Long-term: upon exiting, return of capital or liquidity event, carry should be distributed to the team members involved at the time of engaging with the relevant startups, and the remained proceeds should be invested in a new batch of startups.
Direct investments: $50K
No-strings-attached advisory: $50K
Marketing, events and sponsorship: $50K
Operations and team: $50K
Legal support: $20K
All numbers in USD.
CeLatam returns 347K Celo and receives $220K cUSD, executed atomically upon execution of this governance proposal.
CeLatam team: Susanne Zarpellon, Cristobal Pereira, Marcelo Silva, Gabriel Ribenboin, MartĂn Volpe
Reports:
Season 1 H1 (1st Semester 2024)
Web3 Latin American Landscape Report
Hacking Growth in Latin America: Regenerative Finance, Real-World Assets, and Stablecoins