GCP #4: Token Investments Carry Economics

Summary/Proposal

We propose to distribute 5% of the carried interest (”Carry”) to the Contributors involved in any GCR community investments completed to date and those going forward. The three broad categories of Contributor roles will be the Deal Sourcer, Deal Lead, and Operations Lead. Currently, on each investment that GCR does, the GCR investment vehicle charges 10% carry as an incentive fee. Carry stands for the percentage of the investment exit value of the token investments that the GCR community invests in; this carry definition only applies to token investments.

Motivation

To date, GCR has invested in and supported numerous projects within the Web 3.0 ecosystem. With this proposal, we aim to create a framework that will fairly distribute the carry across the contributors/partners who helped facilitate the investment.

Specification

Definition of Carry

Carry is simply calculated as a percentage of the investment exit value on GCR token investments. For example, on a $100 investment that becomes $1,000 at the exit, 10% carry on this will be $100.

Deal Contributor Role Categories

Deal Sourcer: 2.0% carry distribution share. To qualify for this share, Deal Sourcer should at the minimum do the following: (i) secure an investment allocation amount for the GCR community; and (ii) manage the relationship with the project pre-investment. NOTE: As an additional benefit, if the Deal Sourcer chooses to invest in the deal, they are exempt from the 10% carry costs.

Deal Lead: 1.5% carry distribution share. To qualify for this share, Deal Lead should at the minimum do the following: (i) conduct due diligence on the project (e.g. leading the deal call, taking notes, etc.); (ii) manage communications within the GCR community; (iii) support the project post-investment; and (iv) manage the team responsible for active management of investment proceeds in GCR Treasury.

Operations Lead: 1.5% carry distribution share. To qualify for this share, Operations Lead should at the minimum manage the back-end processes behind the investment that include: (i) setting up the investment vehicle; (ii) confirming allocations and securing funds from GCR community members; (iii) legal and tax work; and (iv) distributing the funds.

Broadly speaking, these three roles represent the beginning, middle, and end of an investment. The Deal Sourcer initiates, the Deal Lead conducts diligence, and the Operations Lead conducts the back-end execution. The details around the roles and the enforcement thereof are subject to change based on the Core Team’s learnings from ongoing developments.

It will become a standard requirement for all GCR investment vehicles to pledge carry to the Deal Sourcer, Deal Lead and Ops Lead as per this proposal.

This new carry framework will apply to the following investments completed to date and future investments.

Previous investments made to date include:

Structure Finance Coinvise Dystopia Matrix Tracer Orca Apollo Verto Manta Parcel Nifty Comedians Aurora Endemic Ruby Rawbots Hedgey Talent Protocol Solchicks Socialstack Convo Space Startupy Sismo Sweatcoin Passage Good Ghosting

Vote

The ‘Single choice voting’ Snapshot voting system will be used for this proposal, meaning each voter must hold at least 1 GCR token to be able to vote and may select only one choice:

Yes - Approve the proposal No - Decline the proposal