LIP-17: Portfolio Sub-DAO Deal Flow Expansion

Authors

Lizident, Adam, JP, Danny, Haitzu, SeaGolem

Summary

This LIP proposes to establish a partnership with basedVC and use their protocol for the following reasons:

• Raise the coming DAO seed round
• Provide the community with a new deal flow open to direct participation through a licensed VC fund

Abstract (what)

basedVC introduction: basedVC is a next-generation VC fund, that allows communities to invest in early-stage web3 projects on the same terms as the world's leading VC funds. Its legally-compliant fund structure allows communities to pool capital and co-invest alongside our VC fund. basedVC has deployed over 20M USD in the past year and has invested in competitive deals such as Heroes of Mavia, SupraOracles, Nillion, Midnight Society and more. basedVC is excited to potentially partner with thriving communities with strategic synergies like Ethlizards.

https://basedvc.notion.site/basedVC-7ff7dd407db54311bc5dde8d26651e88

Motivation (why)

Up to this point, the DAO has been leveraging our partner, Aelin (a decentralised investment protocol), for multiple use cases such as: Allowing the community to participate directly in early stage fund raising rounds of partnered projects Raising our own pre-seed round

Part of operations were focused on increasing the deal flow provided to our community and extending those opportunities to other very aligned partner communities. This is known as the Project H (Herpetarium) initiative.

Unfortunately, Aelin closed down recently and left us with a void on two major infrastructure issues to: Raise our seed round (P1) Develop Project H (P2)

Joining forces with aligned partners can increase the deal flow to our community and would translate into a direct increase of our Genesis and Venture Lizards utility.

Specifications

Overview (how)

By integrating with the basedVC ecosystem, we would benefit from both their infrastructure to raise our seed round, as well as providing a new stream of deal flow to both our Portfolio Council, as well as our community directly. basedVC would provide the legal framework and platform required to open investments directly to our community and facilitate the Lizcoin seed raise (for a fee).

The Lizard DAO would get:

• Additional deal flow to both Portfolio Council and Lizard Holders
• Legally-compliant platform that will host Lizcoin seed raise
• Platform marketing fee (small percent of any funds raised by our participating holders)
• Referral fee for deals our Council refers to basedVC
• Ongoing investor education through basedVC AMAs with portfolio companies pre/post investment
• Convenient and reliable customer service support, they will be in basedVC Discord for direct tags in addition to formal tickets

Rational (reasoning/tradeoffs)

Can we develop our own solution? Adapting the Aelin code base (open source) to our needs, is possible, and perhaps in the long term desirable. However, the workload and cost related to the development and maintenance of such a product is fairly high. On top of that, our legal structure is not yet up to the compliance standards that would make us comfortable in providing such a service.

In order to generate a positive ROI from fees generated by such a product, we would need a much larger deal flow than we currently have. We aim to build this out in the future, but also recognize we are still far away from that goal. Therefore, it is too early for us to build such a platform. Further down the line, when deal flow has strengthened, it may prove worth exploring again.

At the time of this proposal, no additional viable solutions have been identified.

Why basedVC?

Throughout our discussions with basedVC, we have come to realize how much of an overlap exists between our visions and core values. They also demonstrated their capacity to generate high quality and quantity of deal flow (averaging roughly 1-3 out of more than 100 deals reviewed monthly), thanks in part to the legal framework they have put in place and their connections in the space.

All these elements make them a serious force in the web3 gaming investment sector as well as good partner material for our community. Additionally, basedVC offers an all-in-one solution for the needs we currently face as a result of the Aelin closure.

Technical specifications

Lizard Labs Seed Round

A percentage fee will be taken by basedVC from the total amount raised until 250k USDC, at which point a flat-rate fee will apply.

Token-Gated Community Raises

The Lizard DAO will pay $5k to set up a Ethlizards’ token-gated structure on their platform (Including any token assets generated by Lizard DAO). basedVC would take a fee on the money raised by our participating community when providing a deal hosted on their platform. The Portfolio Treasury will earn a platform marketing fee from basedVC based on a small percentage of any funds paid by our community. The Portfolio Treasury would earn a referral fee based on a small percentage of total funds raised when Lizards are the ones referring a deal to basedVC that they host on their platform.

Non Exclusivity

This is not an exclusive agreement. Lizards can still engage with other community-raising platforms or create its own.

Project H Onboarding

By creating an extended token gated structure (minting an NFT collection), we would be able to onboard our extended community of partners to participate in deals through our partnership with basedVC.

Voting Options

• Yes, approve this proposal
• No, deny this proposal
• Abstain