Episode 15: Decentralized Venture Investing with the LAO

Ben Lakoff, CFA
November 11, 2020
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In this conversation with Pri Desai we go into more detail on The LAO. The LAO is a For-Profit, Limited Liability Autonomous Organization. A smart contract-based investment club. Sound interesting?

Early 2020, the LAO opened and quickly raised over $5M to fund blockchain startups based on its community members votes.

The LAO has since made a number of investments and seems to be off to a great start. The new version of Venture Capital? We’ll see. We dive into all things the LAO, the history of “The DAO” and why this investment vehicle might be worth investigating further for investors interested in blockchain startups.

Enjoy this conversation with Pri Desai.

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Show Notes

0:00:00   Welcome and context

0:04:17   What is OpenLaw?

0:07:26   Why did somebody like OpenLaw decided to start the LAO?

0:10:45   What DAO stands for?

0:13:50   Investing through the wisdom of the crowd

0:17:21   The current state of LAO

0:20:34   LAO voting and decision-making process

0:25:37   Rage quitting in democratic investing

0:27:33   How do potential investors think through the LAO timeline and strategy?

0:29:51   Can investors make a decision to invest outside of crypto?

0:34:39   What is the elevator pitch to attract new investors?

0:37:41   What was the biggest surprise in running LAO for the past 4 months?

0:41:56   What was the biggest hurdle for you so far?

0:45:35   What investable projects are you looking for?

0:48:47   Where can people find out more about you?

Show Links


Currency Wars


The Infinite Machine

Pri on Twitter

Episode Transcript

Ben: [00:00:00] Welcome to the alt asset allocation podcast, exploring alternative investment opportunities available to the everyday investor. Here’s your host

Ben Lakoff. Hello and welcome to the all asset allocation podcast. Today’s interview is with Pri Desai and we go into more detail on the Lao. So decentralized autonomous organizations or dowels have had a bit of a resurgence in popularity lately.

The Lao is a for-profit limited liability autonomous organization. It’s a smart contract based investment clubs. Sound interesting. Okay. Early 2020, the Lao opened and quickly raised over $5 million to fund blockchain startups based on its community members votes. The Lao has since made a number of investments in seems to be off to a great start.

The new version of venture capital. Well, see, we dive into all things, the Lao, the history of the Dao and why this investment vehicle might be worth investigating further for investors interested in the blockchain space. Before you listen, please don’t forget to like, or subscribe to the podcast or even better leave a review.

This really helps more people find the podcast and keeps this. It really, really helps. The Lao, Daos and all things venture in crypto. Enjoy this conversation with Pri Desai morning. Welcome to the alt asset allocation podcast. Excited to have you. So I wanted to start off just with a little bit of your background and what you’re doing.

Pri: [00:01:33] Sure. so I lead operations for a project called open law, which recently, put out the Lao here, launched that back in April. you know, I didn’t see open law team for about close to three years now, which is crazy. prior to that, I. Was a law student, kind of fell down the rabbit hole even further into this space in law school.

and then before law school, I, worked in politics, so sort of a left turn here, but I was in DC for several, several years. and, and I mean, if you’re curious, I guess the story of how I fell into this space was more. Political social perspective. so like in, you know, my father used to talk a lot about this.

He’s definitely, one of those, like Goldbug hardcore, type of like James Rickards currency Wars type of guy. And so found out like the Bitcoin thing back in like 2014, 20, 15, maybe, even actually he was talking about it earlier than that. And that was in DC at the time. Sounded interesting. And then.

And last school, wanted to write about Bitcoin Aaron Wright. The cofounder of open law was actually a professor at my law school. So I found him. he would kind of coauthor at least supervise, my, my last school note on Bitcoin and he actually introduced me to theory. so that was like 2013, 2016, I believe.

And so wrote a paper on a Syrian and then kind of worked with him, my entire last year of law school. And then. That was when the whole, Dow hack happened. People trying to figure out whether that was security or not ever writing a paper for my security wall class about that. So from there, the space, I think just blew up, you know, thereafter, shortly thereafter, it was like ICO, boom, and, and, out kind of came up, came, opened on all these other incredible projects.

So, yeah, it’s been an interesting ride, in this space, but. I feel like every month is like a year

Ben: [00:03:28] it’s like dog years. It’s crazy. And the amount of innovation happening at breakneck speed, it’s really overwhelming and hard to keep track of a lot of it. especially right now. I mean, we’re recording in September, 2020, and there’s a lot going on right now.

Pri: [00:03:44] Right. Yeah, it’s crazy to think that like Bitcoin really is only like 11 years old.

Ben: [00:03:51] Yeah. Yeah. But it’s like dog years. That’s interesting. I mean, so, your father introduced you, I mean, currency Wars, the book, I forget the author, but, creature from Jekyll Island, like these, these books for so influential in me, like.

Being becoming more of a believer in Bitcoin, at least questioning these things that you never questioned before. Right. So I think those, those were quite influential for me as well. So tell me a little bit more about open law, which you guys do. I mean, obviously we’ll get into the, the Lao, but what else does open law do?

Pri: [00:04:26] Yeah, so open, not really wants to build out this generic legal layer that sits on top of blockchain. So. by that, I mean like, and you’re familiar with smart contracts, I’m sure your audience is fairly familiar, but just to kind of like strip down all the hype. I mean, if you look at a smart contract, it really is just code transferring one digital asset to, someone else.

And that digital asset can be crypto native, like EA or Bitcoin, or that digital asset can be, representing real world assets, like, you know, intellectual property rights, real property rights. No, whatever, whatever that token may be. but if you want to give that digital asset, any sort of real world significance, do you need to have those rights and obligations memorialize through some sort of paper documents?

So in this case it’s illegal. so what we do with openness is you can take any legal agreements. Convert that through our domain specific markup language into a data object that sort of wraps these smart contracts, and then you can digitally sign the agreement, have that signature memorialized on Ethereum, or really any blockchain and have the agreement reference.

And then as that agreement, You know, gets executed a smart contract that is in the agreement embedded in the agreements gets called and you have like this full stack and, and really, you know, in our vantage point, we, we call it the Ole stack, but we think like smart contracts will sort of adapt to have this stack of like an Oracle layer and.

In this case, like link open law and then in theory on blockchain. So we think those that come with those, the combo, those three technologies is extremely powerful and I’m open, not really the piece of that. So we see ourselves as like a fundamental layer, think about blockchain. you know, blockchain really is that data layer.

Yeah. On top of that, you’re going to have these. Lego like identity. Did he through the exchanges and then legal, which really sits between the two of those, cause that’s, that’s really, we fit in and there’s so much you can do with open law. you know, there’s, we’ve done several demos of law firms and other institutions.

so. Again, like I said, super generic and can be used across every industry. Legal really is pervasive and every single industry. yeah. Yeah. That’s open in a nutshell and there’s obviously some components to that, to unpack, but at a high level, That’s really what we’re doing here.

Ben: [00:06:54] Yeah. Fascinating.

Yeah. The legal agreements, this, that, and central bill  of all of this, right. And these crypto native people that want to, you know, burn, burn down the institutions or whatever. But I think it’s a, it’s a really useful, vital part of the ecosystem. for this conversation though, I’d rather focus a little bit more on the Lao, which was, Project from open law.

So maybe, maybe just talk about, where the inspiration for this was from and why somebody like open law decided to push this project through.

Pri: [00:07:28] Yeah. Like I mentioned open is like hyper, hyper generic, and it can be applied to different products, make building depth faster and easier. And we had the team had been pretty animated by this idea of Dao for quite some time.

I feel, you know, both, both cofounders David rune and Aaron Ryan had been thinking about Dao. loved the idea in 2016. obviously there was a major hiccups there, but, but the idea itself, was sound. And we felt, you know, with our toolkit at open lawn, this idea of like a research, the doubt conversation, I think like Mala, Dao.

Released its code on until like may of last year. And I just remember there was like this Dow Renaissance once again, like folks are really, getting into it and, and it was kind of amazing to see the conversation around Dow’s back, like early spring of last year. And we’d been percolating in our side and we, actually sort of released, a vertical of open law called.

Open OpenLab Dao where you could effectively build limited liability wrappers using open law and really responding to the ground. We, you know, we thought to ourselves, why don’t we recreate the vision of the Dao? the tech maturity is there from, from way back when, and then not only that, like we get the team can structure, structure this stuff, and we also have the toolkit to really bring this to life.

So why don’t we? and so it really was, Just kind of responding to the great feedback and thought it would be a great way to prioritize in the work we did with open law. started building on that late fall and winter, and then released it, later this spring. that that’s really where we come in and as open law, just to come kind of define the relationship between open law and the Lao.

we are like a service provider of allow for the Lao is entirely member managed. however, we, take a small fee just to maintain the DAP and coordinate, between. Members and projects. We do some of the touch points in the real world, which unfortunately we can’t avoid like annual mailing out annual key ones and, you know, maintaining the legal documents and doing the lead restructuring and doing accreditation checks, things of that nature.

we handle on the open loss side of the software provider.

Ben: [00:09:47] Awesome. Yeah, those are, those are definitely still necessary. Right? So. The Lao is inspired by the Dao and we’ll go into that. But so the allow is a member directed venture fund, right?

Pri: [00:10:02] Yeah. That’s a good way to think about it. Yeah.

Ben: [00:10:05] Okay. Before we jump into the lounge more let’s, let’s talk about the DAO, which, you know, a Dow is just decentralized autonomous organization, there’s Mullock Dow, and all of these things.

There was a dao resurgence, but when people say the Dao, what do they mean with this?

Pri: [00:10:23] Yeah, it’s hard to forget that moment. I think it was kind of a crossroads for the Syrian community in general, back then in 2016. But, you know, with the Dow there, there was the vision actually isn’t dissimilar to the while, but it was this idea of a collective hive, mind of people coming together.

Using smart contracts too, on the operational side, on the backend and investing in projects, based on a democratic voting system. so I believe if I remember correctly, I think it raised like 153 million. I forgot the exact amount, but it was obviously a huge deal. I mean, raising that kind of capital in a matter of, in that short amount of time, it’s be incredible.

But again, like the idea there was to invest in help the ecosystem grow. yeah, the vision, again, we still, I really believe in that and, and love the team that puts that together. Unfortunately it ran into, you know, this major hiccup. from a technical side and, there was the doubt intimate stuff hack, I actually think, is, you know, it’s, it’s been documented in great detail.

I think that I forgot his name. The Bloomberg reporter is actually writing a book specifically around the Dow and the hack and kind of the politics around that.

Ben: [00:11:38] Rousseau’s book. The infinite machine goes into a lot of detail and shines a lot of light on like what was happening. I mean, the smart contract wasn’t that audited money started flowing in way quicker than they ever would have thought.

Like, that’s, that’s a good one as well.

Pri: [00:11:53] Yeah, no, that she definitely, I think she has like a chapter on the doubt too. yeah, no, it’s just a crazy story and it’s kind of hard to not think about a theory of, without that turning point of the doubt. so there’s obviously a lot of conversation at that point about that, but very exciting stuff.

again, ran into some legal and technical issues, but. Profound and far as far as vision. And I think it speaks to the fact that it raised so much money that people really do believe in this idea of, pooling capital, like water and distributing that in a very seamless, seamless fashion, using smart contracts.

So, you know, we were very much inspired by, by the, original Dow and actually one of the members of the Lao is Christoph who helped put that together. So. He himself is, is I think, quite interested in this and building this out. So yeah, I mean, we love that project and I’m glad to see that we’re seeing a resurgence in, in Dow.

think it’s a huge killer app and killer use case for theory. so.

Ben: [00:12:56] These DAO investment vehicles, they function from my understanding. I think you mentioned the high of mind or the wisdom of the crowds. Typically the wisdom of the crowds. Isn’t that right with investing decisions. Right. So how do you think through how this, this thing is going to be successful based on the wisdom of crowds investing in early stage startups, something that perhaps they don’t know much about?

Like, how do you think through this.

Pri: [00:13:25] I, you know, I guess I, I, I actually think that the, this high minded people they’ve made pretty good decisions. And I think that they’re pretty in touch with what’s happening. Like a lot of them live, breathe, this stuff they have since the inception of Ethereum they’ve been early on and have spotted good stuff, we’re actually have built great protocols.

We have a great like number of founders that are also members of allow. yeah, I mean, like, if you look at defy, if you look at some of these trends that have emerged in Ethereum, and I guess in crypto, in general, like traditional venture has missed much of that as well. or not as well. They’ve missed some of that.

And, You know, if you look at this group of people, a lot of them have different skillsets. Some of them have scaled up companies and are running companies, have been since, you know, before 2017, some of them have been, at the founding floor of a theory. some of them have just. Really invested in the space, our liquidity providers in defy.

So they know the ins and outs of everyone, these protocols, and know what could be improved or not improved. So I think that’s, there’s like this emergence of. Operator investors. And I think that that’s really what the Lao has. So when you started talking about the operator investors that are angels or have been angels, and then you kind of get them together, you’re getting a crowd of people that are experts in different subject matters.

So we have, like I said, those deep by liquidity types that, you know, know balancer from front to back. we have folks who are so entrenched in the NSP digital arts space. They’re on every platform. They’re buying art, they’re selling art. They just know that emerging digital artists, they can speak to that.

And I think, you know, because of that, you can get a really diverse group of people that can comment from their perspective. And, you know, we have some people on the venture side, some people on the. operational side of all these startups and you get that mixed together and actually the decisions do come out of it.

And that’s really the thesis of, of the debt of both the Dow and that allow, this idea of people just, you know, being living on crypto Twitter all day and making decisions and voting on it. And you hope that. that, that democratic system of voting, but I mean, from my vantage point, sitting, listening to the members, deliberate on certain projects, both on the calls and in our discord, that’s like very active.

you know, I I’ve learned a ton and I think they’re all, you know, coming at it from different angles. And so. It brings a different perspective. So, I mean, I actually think that the Hivemind does doesn’t work, especially when it comes to this space. And so many of these like siloed industries, like traditional venture kind of missed the boat.

so yeah, I mean, I mean, yeah, I think it’s working so far.

Ben: [00:16:07] Yeah. Well, I mean, having a diversity of opinions really changes the way I think about, you know, this hive mind sort of thing. If you have a, a good collection of diverse opinions, especially these startup. Operators slash investors. These, these are great people to make these investment decisions.

Right. So walk me through some of the events, like the track record. So, the Lau launched earlier this year, it’s made, it’s raised X amount of, ether it’s it’s made X, investments kinda walk me through an update.

Pri: [00:16:41] Yeah. So, we launched. the Lau at the end of April. So April 28th. and since then we’ve just compounded both interests and growth.

so the membership has just increased. I think, you know, we have close to 55 different members, and the Lao is actually closed at this time. but we’ve raised, I think, you know, the, the, the, the, the price of ease I’m fluctuating, but it’s about 12,000 East right now. It closed, I think it was like 5.3 million.

So that’s the, a number of assets under management that at the time, we’ve just since launch has, you know, invested in projects, So there’s a nice cadence with the investments that we’ve had. there’s actually an interesting, deliberation between the members currently. so legally we can’t have more than a hundred members, so we have to have up to 99 members.

so right now, as I mentioned, we have about 55. I think the members are considering opening it up for, an additional 40. For members or whatever that excess. So hopefully at that point we’ll like even increase the, the amount of ease that’s in there. But I mean, since then, just to kind of give you a sense of like the portfolio, you know, we’ve had a wide range of projects, get funding.

Our first was plenty of cash, which is in the privacy preserving. Based off of projects. from there we invested in super rare, which is the NFP digital arts space. we also, I think a lot of the members wanted some exposure to the options insurance space. there’s a clear need for that in the, world at the moment.

So. Potion and pods and for both really interesting projects with awesome founders. and I, from there also like personal tokens is another one. So role look, another investment in that space is like about to pop, a lot of interests on the social token side. So I think that, you know, because as I mentioned the numbers, I have a lot of interests.

we’ve been able to. Had this diverse portfolio as of late. So these have been moving. we have a couple other doubts that we are also going to, Probably announced in that, in the near future here, but maybe I’ll save that for later in the conversation.

Ben: [00:19:02] Yeah, sure. That’s exciting. Definitely made a note of that.

We’ll bring it up. So the process, so 12000 eth came in full it’s, like $4.3 million right now, 55 members. The decisions are all decentralized and then thus. Decided by this collective. So you put up vote and you say, we’ll increase this up to 99. You’re limited because of legal, to, to not go above that, obviously.

and then these 55 members vote based on the amount of money they’ve contributed to the fund, they have voting shares and they say open it up or close it. Right. Yes. And then the, the process for investing. So that’s like a governance, I guess, of the Dao, but the process is I, I, I’m basically, I’m a member of the Dao or not.

I propose this, this project for investment and then all the members vote on it and we’ll walk me through what this looks like.

Pri: [00:20:00] Yeah. So that’s kind of been a fun experiment. you know, we didn’t really know how that deal flow would operate before we launched and, you know, we kind of wanted it to happen organically.

So the way. That it’s an emerges twofold. you know, a lot of these members are really playing coast, close, close attention to the space. you know, they’re on crypto Twitter, they’re talking to people. so a lot of what the interesting projects that comes through are brought in through members. so they’ll find something, they’ll see some thing, you know, raise it in our discord.

There’ll be a little bit of chatter. We might create a channel specific on this project specifically about this project. People play around and chat about it. A member or myself will just reach out to the project, gather some basic information. Super quick call, just to understand, what the project is about.

Like their team, you know, the product and whether they’re fundraising or, or what their situation is there. And if not like how we can help them otherwise. if there’s a lot of interest around the project, so long, sorry, that was kind of long winded, but, I’ll do that initial kind of outbound, share that with the members or the member themselves.

We’ll also do that on if they’re talking to them separately. And we have these weekly calls, two week, where members will discuss it, discuss the project in greater length. We’ll take that to the discord. The conversation will just continue to flow. generally speaking, the members wants to talk to the founders and meet the founders.

So we’ll work on, you know, putting together a member call, between the members and, and then the projects themselves. And, really from there, kind of quickly know whether or not they want to, you know, propose that project for both. So if they are, will signal to the project that there’s definitely a lot of interest is may, should apply through our application process.

And then a member will nominate it and, there’ll be a one week voting period. and if they’re more yeses than nos, that’s capital is committed through a smart contract. it doesn’t get deployed into the project, or the founders yet we have a one week grace period where any members that potentially may or may be unhappy with that decision or would, like to.

I would like, or just generally unhappy with it with the allow itself, they may be able to rage quit, and take any undeployed capital. At which point thereafter the project gets funded and all the legal documents get signed. So that’s the process, in, in, in one regard and I would say most of the time, that’s how the deals have been flowing.

there’s also the case where projects applied to the Lao. and I mean, the misstep recently where a project applied to Lau, will bring. It’s to the members, they think it’s really interesting or cool to learn more about it and then nominate the proposal. So really it’s either inbound or outbound is, just a long way of answering that question.

But I will say like, surprisingly, I think there was some questions initially with allow, like whether or not there would be deal flow, whether or not projects would be comfortable with this group of people or a Dao investing in them. but I, that hasn’t been yet. In fact, a lot of the projects are pretty excited about this group of folks who are really excited about supporting them.

So, it’s worked out pretty well.

Ben: [00:23:18] Yeah. I had an interview with the guy from we’ve under talking about crowdfunding in general, and it’s surprisingly founders are open to these crowdfunding mechanisms or like in the, the Lao case, you know, 55 people investing in your company. Basically, it’s probably just one line on the cap table in this case, because it’s the Dow, which is the legal or.

Allow a legal entity, but then you suddenly get 55 ambassadors and promoters and advocates for your project. And each comes with its own network and his own specialization to actually really. Hopefully help that project succeed in the long run. So I’m curious about, you had mentioned the rage pudding aspect.

So the idea is that the whole collective photo on this project and, you know, majority rules, so number of units and in the Lao, so 60% vote for this thing. So that other 40% then is kind of. Maybe not angry, but this wasn’t an investment that they wanted to go into, but because of the way that the Lao is structured, they then invest into this project unless they rage quit and exit allow completely.


Pri: [00:24:35] Correct. Correct. Yeah. Yeah. A lot of folks have asked like whether or not you can pick and choose which investments you would like to. Be exposed to as a member, but you know, this is a collective. So even if you’re unhappy with the investment, you are exposed to it, unless you do rage quit. And at that point you have to, we allow entirely, but you get, you do get to take any undeployed capital and you do still have a closure to those projects that you invested in prior.

so, you know, it’s really up to you and, and that’s what kinda makes this whole structure a bit fluid and interesting. And. Completely different than normal, normal venture as well also. yeah, there’s, it’s very investor friendly in that regard.

Ben: [00:25:16] Nice. And speaking of how it’s different from a venture in general, all of the projects that you’re investing in are crypto native sort of.

Companies, do you, all of them have tokenize shares or governance or some sort of token representing the investment or a, or is it sometimes just equity?

Pri: [00:25:38] It’s it’s really both. so it can be token or it can be equity. so we have invested in some equity, only projects as well.

Ben: [00:25:45] I know that the loud doesn’t have an investment thesis or anything.

It’s kind of determined by the Lao members, but what is, what is the time horizon for these sorts of things? I mean, it just launched this year, so we can’t say if it’s been successful or not, I don’t know, in 10 years we’ll find out. Right. but

Pri: [00:26:02] yeah.

Ben: [00:26:02] What, when you’re talking to investors or potential investors, you know, how do they think through this timeline or, or strategy or all of this?

Pri: [00:26:13] Yeah, I mean, the it’s funny initially, like when the loud wants, there’s definitely like, we even still have a thread in the discord about like Lao thesis, like what we’ll be going to target, or we’re going to be the first money in heavy, want to operate. And actually like a lot of the members at the end of that conversation were like, you know, it’s probably just best not to define that and see how this evolves.

like we don’t want to, as a collective, like turn down great opportunities because we’re decided we only want to be the first money in, I don’t want to speak to the members, but there definitely seems to be, a bent towards having projects or investments in projects that. Have a product. So not like that white paper pre-product phase.

so I think there’s definitely like these exceptions, but for the most part, I think folks really want to see some product and, and traction. And whether or not that’s, you know, they, they don’t want it to accrue themselves as far as, but, yeah, I mean, I don’t know if that answers your question fully, around the thesis, but it’s still like evolving.

you know, I think it’s really up to the members where they want to take that. you know, maybe over the next couple of years, as more capital gets called and the fund just grows or there’s people, rage, quitting people coming in and out with new capital. it might change too. Like a theory. I’m only it could evolve to another chain or something like that.

So it’s very dependent on what the members want. you know, initially it kind of was, did start out as like a, an Ethereum button, but. We’ve talked and looked at some book about projects. so you know, it really just depends on, on, what the members are thinking. and, and what’s trending at the moment.

again, sorry. I don’t know if that’s like a satisfying answer, but

Ben: [00:27:56] wow. Don’t worry. I’ll ask more questions if it’s not so.

So that’s, I mean, that’s interesting, I guess, on, upon first glance, I thought it was Ethereum only token only, but it sounds like there’s a mix of equity and all sorts of things. So I’m curious with, because it’s it’s community, member driven.

If the community decides they want to invest in a restaurant in a local town or real estate or something like that. So far away from crypto. Technically it could?

Pri: [00:28:30] I guess technically I’d have to probably look into the operating agreement. but you know, because with how these structures actually operate, maybe there’s like, oftentimes there’s only like a 20% side pocket kind of fun where you can do, other alternative type investments.

the way it allow us structured because there’s no GP or general partner. It’s entirely member managed. They could presumably do that. That just hasn’t really been the case. but you and I don’t think it will be. but yeah, I mean, it could, I guess, presumably. Okay.

Ben: [00:29:03] So, so the consensus view is stay within crypto, stay within this.

Decentralization movement without it explicitly being part of the investment thesis.

Pri: [00:29:13] Yeah. Yeah. I mean, I think that’s definitely the ethos of the project. It’s all crypto native, the members themselves, you know, they self selected into a project that is investing in. Theory I’m in decentralized technology.

So I would say like, if there is a thesis pretty broad, but I would venture to say that the members and would agree with me here that it’s more, investments in decentralized technology and really pushing the space forward. yeah, I think, I think all of them are pretty committed and have had either work in the space, have, you know, Invested in his base helped launch a lot of, help go launch, in some regard in the space.

So, there’s definitely, A leaning towards a decentralized facts.

Ben: [00:29:56] Definitely. I mean, the minimum buy-in was what, how many ETH?

Pri: [00:30:02] Yeah, it was 120 ETH initially. And then that changed, Based on the number of investments we had at one point. So there was, that was our first governance proposal where, the current members, passed the proposal to increase the buy in amount because for every new member that comes in, they get diluted.

so it was only fair to really increase the, premium to join the allow for any prospect of numbers.

Ben: [00:30:27] Yeah. So, I mean, they’ve got significant investments in the space that’s over 30, $40,000. So, yeah, it makes a lot of sense that this would stay within the crypto world. Just wanted to throw you that singer there,

Pri: [00:30:38] you know, beyond just like a, because I would say the Lao is definitely like more of a broad based Ethereum, investment.

Fund, or like, whatever you want to call that. But, we also are thinking about other collectives that can come together and back in different pieces of decentralized technology. So for example, we are. Thinking about putting together a Dao called Flamingo. we’ll probably announce that in a few weeks, but it’s a collective of people who are super into the NFP space, whether that be gaming, that’s digital arts, you know, ENS domains, whatever.

you’re. Fancy there to like, get that group in and start buying NFTs. I’m thinking about sectionalizing them for each of the members of the collective, which is pretty interesting or different aspects of that. You could take it, but, the fundamental, I guess, thesis or interest of up purview of the, The, that doubt, the Flamingo doubt itself is to invest in NFP or purchase NSPs.

and then they can lend NFP from there if they want. So there’s a lot of things that they could do. but that’s something that we’re thinking about putting together. we’re also thinking about putting together a Dow for liquidity. So, you know, pulling together folks assets, folks assets, so they can start thinking about, you know, all of those.

Parking your cash and, and an exchange like, you know, so upper balancer and or in those, the provider fees. So you can do that as a flat as well. so that’s that those are some other avenues that we’re thinking, but we definitely are focused on the crypto native.

Ben: [00:32:16] Awesome. Awesome. Yeah, those are, those are great ideas and good use cases for the dowel structure.

And you definitely have fixed out with the Lao, how to do it legally, safely. All of these things when you’re talking to new investors. So say you opened and this thing up to another 40 people, what is the elevator pitch for them? For investing in something, some sort of structure like the Lao.

Pri: [00:32:40] I mean, that’s a great question.

So it really depends on who we’re talking to and what their interest is. I mean, most of them know and have like a, like some friend or some connection to the loud, but, generally, I mean, it’s not dissimilar from just describing the structure as, as I did prior. So, I mean, when you start thinking about this idea of.

Protocol founders, early Ethereum folks, people who’ve just been investing and thinking about, what projects and what avenues are needed. And necessary to really build out this entire crypto native ecosystem. you know, that’s really what we’re trying to build and you have this collective hive, mind of people.

So, I mean, that’s also, I think why folks want exposure to this? Cause it’s not, it’s not just an opportunity to, you know, invest in cool projects, but it’s also a way to like, meet like minded individuals, meet projects that you might not normally get exposure to. And, Learn from other people and other interest areas.

So I think that’s, that’s been a huge, you know, motivating factor for people to join. a lot of people also like this idea of experimenting in this space, this idea of having investment collective or a Dow is super compelling. I think for people who’ve been around, we’ve had folks that were, Members of the original dowel and, and were pretty upset to see that kind of go out the way it did.

So reliving that vision through the allow is, is a great opportunity for them. and I mean, a lot of people have been following this loosely and. No have invested in the space. So having, kind of expanding their own personal portfolio and their exposure to these different projects is pretty compelling as well.

I think it’s this weird accent spirit man, and that there’s a certain type of person and that would want to join that. So I’m like pretty, I think a lot of it, or just a lot of it is just spread off. Like folks is curiosity and wanting to join this structure like this. And, I think people see how fast we’re moving, how different it is from venture, how we’re trying to streamline a lot of these operations and legal and make everything quick and fastest smart contracts and voting mechanisms that they just want to be a part of it.

and, and, like I said, it’s reliving that vision of the doubt that never really got to happen. And so I think folks, folks like it, And it’s only an experiment. So I think people are willing to be a little dice and that’s kind of the cool thing about people in crypto is like they see something new and they just are curious and want to dig in.

So it’s, it’s great.

Ben: [00:35:13] And have enough investible cash for a $30,000 experiment. No, but jokes aside. I mean, I do think it’s a, a great idea. And I think looking forward to watching it closely, over the coming years, that’s for sure. So it is an experiment. And thus far, what has been the biggest surprise in running this thing for the last well for four months?

Pri: [00:35:38] Good question. I’m pretty like, I guess it’s not surprising now, but I guess early on, I was surprised to see the number of projects that really. Wanted a Dao investment. Like a lot of folks will reach out to her, like super pumped about this idea. A lot of project founders, like love this idea of having a collective of different people from different backgrounds, investing in them.

Like, I, I never really thought there would, I didn’t, it didn’t really compute to me that a project founders would really, you know, find it interesting. I thought for them where it was like a fast way to get capital focused on product and, and not necessarily. No, have to spend four to eight weeks with the music, the trying to get funding, you know, pretty quickly.

Wow. And it’s pretty like people are on top of it. So I, you know, I thought that would be more of the appeal, but rather it was actually, you know, this idea of a new structure investing in them and having this. Obvious to me now, but having this like group of 50 people who are early on in this space, promoting their projects and supporting it and making connections.

And a lot of folks, a lot of allowed project founders have reached out for job postings or whatever their needs are. And I just kind of send that off to allow members and they pass it on to me and will help fill roles for them. So, I mean, it’s like this whole network that they’ve. been able to get along with investments and, that to some extent is more valuable.

Like we’ve had a lot of startups that are over subscribed, but we’ll reach out and they’re like really thrilled to make room for the Lao. And I think that’s super cool. I think like it, it makes me feel that not only are the members of the Lao. Really to willing to like take, you know, the financial risk and the time and everything to experiment with something like the structure.

But so were the project founders themselves, like they really liked this idea. They’re committed, have everything crypto native and yeah. Get investments from dowels. And I think that being that come from from their side has been pretty amazing. And, I guess on that note on a personal note, like being able to talk to founders all the time is.

Tremendous. Like, I don’t think I’m like a founder type at all, but I definitely love talking to founders and working with founders. And I think just learning, learning from them, I think it was like quick 30 minute calls with them has been like a huge, benefit and like making my job pleasurable. Like I just feel like I learned so much from them.

So I really enjoyed that piece, of this job so far, but. Yeah. Yeah, there was a lot I just had there, but point is I think, I think, I think it’s great to see the crypto community embrace this. and, and, and like, Venture is fine, but I, traditional venture is fine, but like this idea of, you know, centralizing it out of Silicon Valley and having money pooled from like all over the world by different people is super compelling to them.

And I think that’s great. it’s exactly what you want to see. And I think that that attitude is really gonna push this ecosystem along. Cause I mean, I guess it would make sense since we all have like that decentralized, attitude and, and this idea of. Breaking things apart. So, and then making things better and rebuilding.

So, yeah, I guess I’m a bit surprised by that from their, from their vantage points.

Ben: [00:38:54] Decentralized. Yes, but you are omnipresent in the areas that I see you. And I know you’re doing a lot of stuff behind the scenes, so I know you and the rest of the team really, really hard to make this thing work and function so seamlessly.

So hats off to you and the team. I know you guys are working really hard and not a lot of people recognize that as

Pri: [00:39:15] well. great.

Ben: [00:39:16] And on, on, on that, I mean, it sounds like it’s, it’s going really well and great thus far, but what has been, what has been the biggest hurdle so far?

Pri: [00:39:26] Yeah, I mean, I will say things have gone, you know, leaps and bounds better than I anticipated.

I guess the hurdle is like, we. I there’s a couple of things, I guess. we tend to move really fast. So, you know, we, compared to working with other, as compared to, you know, project working with traditional VC. So like, you know, allow the lab, we’ll have a couple Jack that they find interesting.

And within like, you know, a few weeks of chatting, chatting with them, then talking about it, you know, whatever there there’s a decision can be made quite quickly. So challenge has been kind of waiting for the code investors to figure out what the terms are and wrap up. So then we can close that fully close the loop on that.

It’s not even really a hurdle. It just takes longer than what our timeline is. So it’s more just being patient in that regard. but it’s not, you know, a massive. A deal. I think another hurdle has been kind of the gas costs. so, you know, we have a very active community members if allow. but you’ll notice on the voting, a lot of folks that they see more yeses and nos, they’ll probably just bow.

They don’t want to, I don’t even blame them. They don’t want to pay the gas cost. So I think like technically that’s kind of a hurdle. I think, people, so we we’re, we’re very active community. As I mentioned, like keeping up with our discord is honestly like borderline a full time job. So, just making sure everything is running smoothly there, it takes quite a bit of effort.

However, you know, there there’ll be phases of just having to, Push people. I think sometimes there there’s so much going on in this space and a lot of distractions. So just, having folks fully engaged at the same time when you’re coordinating between like 50 people is oftentimes, difficult.

But, I mean, honestly, I feel like it’s totally manageable. It’s almost like in a way a good thing that that rule is. Say that you have to have more than 99 numbers. Cause I think once you start getting past that, it gets hard, really hard to herd cats and like wrangle folks. So, sometimes that can be challenging, but that’s really grasping.

I would say for the most part, things are. Running way, way more slowly than I anticipated.

Ben: [00:41:37] And, just really quickly high level legal entity, Delaware, LLC, open to foreigners, like, accredited only what else?

Pri: [00:41:46] Yeah, there is no general partner. It’s all number managed. so like that whole GPLP structure is something that you don’t.

Really have to deal with here. on that note, I don’t know. No you’re you are, but traditional venture operates on this, like two to 20 model. so 2% management fee with 20% carry, which means, any profits like realize from the investments go 20% of that goes back to the fund itself. we at allow actually don’t take a carry.

So it’s super investor friendly in that regard. they seek. All of the benefits of, of their decision making, which obviously makes a ton of sense is they’re making the decisions. Yep. Delaware, LLC, open to foreign investors. Everyone is accredited. We don’t like to cut corners. So everything we do is super thorough.

yeah, I mean, I’m trying to think if I’m missing anything structurally speaking,

Ben: [00:42:35] foreigners invest. I mean, obviously certain jurisdictions are excluded, but most, most foreigners can.

Pri: [00:42:41] Yes again, I’m under, I guess. Yeah.

Ben: [00:42:44] Okay. I mean, I wanted to give you a chance, like a call for projects. So it sounds like deal flow has not been an issue, but obviously you have Flamingo, which is the NFT.

So any cool NFT projects you have this liquidity Dow, which also will be really cool. But, yeah. Speaking to people with investible projects, like who, who are you looking for and why?

Pri: [00:43:05] Honestly, it’s a pretty broad umbrella. So if you’re someone who wants to receive, if you’re, first of all, we want like a great talented pool of founders and we want to support them in any way we can.

So with any, you know, any regard there, if you’re interested in a project, just kind of shoot that over to us. You’re more than welcome to like hit us up on telegram. We’re more than happy to pass along your information to the members, or you could apply directly. you know, there isn’t, like I said, much of a umbrella except for you’re working in a decentralized space.

So if you’re in that, you know, and it also would be great to also be at a stage where you have some level of product, you know, the ICO group with the white papers and all of that. I think everyone feels a little burned by that. So we want to see. Fractions of products. and on the NFP, if you’re someone who would like to either join as a member, or if you’re a digital artist or in the gaming space, or you think that that can be interesting to you in one way or another, feel free to reach out.

same goes for liquidity doubt. you know, we’re going to be doing that in our team now before liquidity now, but that’s coming soon. yeah. I mean, if you’re a member that likes to join the, wow. I think we have quite a lengthy, like not, I don’t wanna say waitlist, but a group of folks who are interested in joining, those last 40, themes.

so if you’re interested, let us know. We’re happy to jump on a call and chat. And if you’re a project that wants to learn more. Again, we have weekly community calls and, I would also like to add, this is kind of left field, but we, you know, have a great group of mentors also as part of the Laos. So we’re trying to have like these every two months, every.

Six eight weeks or something have a meeting, with the Lao mentors and all the project founders to help support them. Would that be like, you know, how to pitch a journalist, how to set up a bank account, you know, to talk with crypto companies. our next one is about legal and regulatory. Issues our last one.

And our first one of the first cohort of targets was we talked a little bit about governance token, and so we’re really trying to do that. So if you’re interested in becoming a mentor of the Lau, you know, we’d love to have a great group of folks we’ve already collected, a nice. a strong group of mentors who can help on the communication side can help on marketing, legal, regulatory, scaling of product operations, things of that nature.

So, if you’re interested in that or have that kind of skillset behind you, please let me know, love to have you on board there too. Awesome.

Ben: [00:45:40] Great stuff. And I’ll, I’ll make sure I list a lot of that in the show notes. So Pri really appreciate you coming on. Where can people find out more about you about the LAO?

Where do you want to send me

Pri: [00:45:52] telegram? I’m basically live on, so @pridesai, P R I D E S A I, I think that’s my. Twitter handle as well too. So either we’re pretty responsive on there. Awesome.

Ben: [00:46:04] Really appreciate it. Lots of good information in here. I think my listeners are really gonna enjoy it.

Pri: [00:46:09] Thank you so much for your time.

Ben: [00:46:11] There. You have it. Thank you for listening. I really appreciate your support. Show notes, transcript links, and more can be found on our website at If you’d be so kind, please share this with anyone you think might be interested or get some value from this conversation. If you have any questions or comments, please reach out.

I’m always happy to hear them. Lastly, if you’re on YouTube, please like the video or subscribe to the channel. If you’re listening to the audio version of this, please subscribe to the podcast and, or leave a review. This really helps more people find the podcast. And I really appreciate it. Thanks again, and hope you have a fantastic day.

Happy investing.

Ben Lakoff is an entrepreneur and finance professional. He has developed strong global finance experience through 10 years of international assignments in the US, Brazil, Afghanistan, Southeast Asia, Czech Republic and through the award of his Chartered Financial Analyst (CFA) certification.