For Entrepreneurs

Introduction

One way to frame MetaDAO is “a place for ambitious companies to raise money through community ownership without the usual token-launch traps.”

That is, if you need capital to build or grow your business, you have a few options available to you today:

1. Follow the standard path, selling token warrants to VCs and launching a token in 2-3 years
2. Raise venture capital and never launch a token
3. Collect creator fees from Pump / Believe / Heaven or a similar platform
4. ICO on Metaplex or a similar platform
5. Launch on MetaDAO

Of these five options, only the fifth is purpose-built for building a long-term company with community ownership.

The standard token-launch path is broken and getting worse

Standard token launches (a hyped token generation event, paid centralized-exchange listings, a 10% airdrop, separate Labs, Foundation, and DAO entities, and linear vesting) are not optimized for building a long-term business. The playbook often shifts value from retail buyers to insiders while avoiding securities-law obligations.

If you try to use it to build a long-term business, you're going to have a bad time:

Some may believe that doing a venture round doesn’t lock you into this path. But we find that once teams raise money, they feel pretty locked into it.

Keeping ownership in equity can be the right choice

Some teams choose not to issue a token and let value accrue to equity, as a conventional startup would.

That can be the right choice. If you can raise from backers who do not expect a token, seriously consider it.

Launching on a bonding curve is terrible

Recently, a few projects have launched on or considered launching on a platform like Pump, Believe, or Heaven. The main problems with these are as follows:

• You don’t raise much money - the median token only makes $10k - $100k in creator fees.
• These tokens don’t have any intrinsic value, and the market will recognize them as such. You may have lots of traders, but you will have few long-term holders
• Snipers will scoop up large percentage of your supply and sell onto your believers.
• “Hey, would you like to come work for our start-up for a below-market salary and 1% of the supply? Yes, someone was able to purchase 1% of the supply for $150, but what does that matter?”

Normal ICOs can work if you have enough trust, do the legal work, and avoid the pitfalls of the standard path

Another option is to launch at a place like Metaplex. Essentially, a 2018-style ICO where you’re given discretion over the money.

Historically, many of these ICOs ended with teams misappropriating funds. That has made serious backers wary. You may attract short-term traders, but it will be harder to attract long-term holders.

But if you have sufficient trust, are willing to do the legal work to align the token with the business, and avoid the low-circulating-supply, high-fully-diluted-valuation playbook, this can be reasonable.

MetaDAO is the place if you want to align a community the right way

But if you want to align a community by launching a token and you don’t want to do a bunch of legal, smart contract, and marketing work, MetaDAO is today the place to go.

On MetaDAO you get:

• A valuable token, which leads to longer-term and higher-quality holders
• Provable transparency, so no one will wonder whether you made undisclosed over-the-counter deals
• To enter the arena early
• A mintable token - you won't need to worry about running out of supply
• A potential community of early believers

It's not a free launch - there are plenty of trade-offs, including the psychological effects of having a liquid token that can go down.

But if we were launching a new company with community ownership today, MetaDAO is where we would want to do it.

-Proph3t and Kollan House