🚫 no board? no problem
the traditional way
usually, if a vc or vc fund invests a significant amount of capital into a startup, that vc (fund or general partner) gets a seat or two on the company’s board
this is so that the vc's can help guide the company through executive decisions (hiring, management, finances, corporate actions, etc.)
things are a lil’ different for crypto…
being on the board, for the vc, would also mean that they'd be required to take on responsibility (and liability) if the startup or company for one reason or another gets involved in an undesirable event (i.e. lawsuit)
the problem is, regulators are increasingly aggressive in investigating and potentially disbanding crypto startups (here’s an example from the uk)
why is crypto being treated like that?
on the surface, crypto startups' operations being a part of defi can be alarming to regulatory bodies, considering how many fraud cases we've seen so far in the industry
imo: tokenization is also part of the problem
naturally, a lot of nascent crypto products offer tokenization as part of the service, meaning anything can become a tradable (and profitable) financial instrument using (that’s right) cryptocurrency
to regulatory bodies like the sec, yuga labs' bored ape yacht club nft collection is seen as an “unregistered offering”
to avoid all that drama, vc’s aren’t taking board seats
at crypto startups, that is
a16z led a $11m series a round for uniswap labs, one of the biggest decentralized exchanges, but the firm does not hold a seat on the board
firms specializing in crypto investments like pantera capital and standard crypto also generally "do not seek out board seats on token-issuing startups due to the legal risks", per the information
happy thursday!
💡 something im thinking about
that's all, folks 🐒
