[NON-CONSTITUTIONAL] Pilot Phase: Arbitrum Ventures Initiative

Description

TLDR

We are proposing a pilot of the Arbitrum Ventures Initiative Scope:

1. A 2-month pilot sprint of the core team focused on executing the market consultation part of the scope.
2. Running a series of online and IRL events before, during and after the 2 month sprint dedicated to the creation of an Arbitrum Ecosystem Investment Thesis. This thesis will help integrate the various investment initiatives already being run or proposed to the DAO.

Shortcast

https://x.com/Sinkas_/status/1796573051414302910

Full proposal text

https://forum.arbitrum.foundation/t/non-constitutional-pilot-phase-arbitrum-venture-initiative/24247

Context:

This proposal builds upon discussions during ETHDenver, and a subsequent six weeks of conducting the Arbitrum Venture Initiative (AVI) Working Group.

As a result of the above, the AVI Working Group has identified existing pain points related to venture development and investment frameworks, and has proceeded to submit this proposal with the intent to formulate an eventual comprehensive go-to-market strategy for the AVI.

Abstract:

The AVI team’s mission is to grant the ArbitrumDAO an effective and practical knowledge base so as to equip delegates and future AVI contributors with the necessary toolkit to deploy the AVI Ecosystem Fund (or nomenclature equivalent).

Why conduct a pilot phase?

Operating AVI represents a bold and pioneering initiative for blockchain ecosystems and as such it is also a complex undertaking that involves high capital needs. It also is one of several such initiatives the Arbitrum DAO that require complex stakeholder alignment around setting up legal and governance structures. Thus, it is not appropriate to rush before the relevant structures have been put in place.

At the same time, there is a significant opportunity cost in not progressing with good velocity on at least the components that can already clearly be acted on. A lean and pragmatic pilot phase to analyze key themes thoroughly and develop the necessary clarity, will provide us with a solid foundation to build on.

A pilot phase will help us derisk the AVI initiative, provide a better understanding of the landscape and options at hand, surface and validate key assumptions, and engage and align key stakeholders. Running a pilot phase will help us refine and optimize our investment strategy to cater to investors and target developers of highest strategic significance and return potential to Arbitrum, while at the same time further fleshing out the next steps and cost assumptions. Ultimately, our goal is to foster iterative learning, robust and effective investment approach, and strong engagement from key ecosystem participants.

Pilot approach

The pilot sprint outputs intend to provide the DAO delegates and stakeholders with sufficient information to decide on advancing the Arbitrum Venture Initiative (AVI), or parts of it into the next phase of development. The sprint is designed to fund the operational team for 8 weeks and is the natural progression of our existing Working Group efforts. We will also be hosting the IRL thesis development event and online workshops before and after the core sprint. Thus, producing an overall timeline of up to 18 weeks.

The sprint will kick off in-depth research and workshops to identify opportunity areas (thesis development).

The pilot sprint will provide concrete data and analysis from various ecosystem participants and stakeholders. Armed with this information, we will have the strategic perspective (thesis development) ready for AVI’s operation.

Key Output // Deliverables

• Thesis Development Report:
  • A detailed thesis report outlining the strategic vision, objectives, and target areas for investment within the Arbitrum ecosystem. This should include:
    • Identification of key sectors (e.g. within DeFi, Social, Consumer, DeSci, DePIN, etc) and their relevance to Arbitrum.
    • Analysis of market trends, opportunities, and competitive landscape (while collaborating on any work done by other groups with clear overlap).
    • Potential impact on the Arbitrum ecosystem and long-term value creation.
    • Foundational hypothesis development on strategic relevance of key sectors and investee profiles.
• Market Consultation Findings:
  • A synthesis report from market consultations (Indicators in mind: 30 founders and 15 funds). This should cover:
    • Insights into market perceptions and expectations.
    • Identification of potential challenges and opportunities from the perspective of market participants.
    • Recommendations based on feedback for refining the investment strategy.
• Community Engagement and Feedback:
  • A summary of community and stakeholder engagement activities, and feedback collected, including:
    • Details of public events and their outcomes.
    • Assessment of the effectiveness of alternative community engagement activities.
    • Summary of feedback from community members and how it has been incorporated into the strategy.
    • Plans for ongoing community engagement and transparency.
• Set of Strategic Recommendations:
  • A conclusive set of strategic recommendations for the ArbitrumDAO, encompassing:
    • A clear roadmap for the next phases of the initiative.
    • Analyzed specific strategic investment priorities and actionable steps for fund deployment.
    • Substantiating the above with examples for potential deal warehousing.
    • Metrics for evaluating the success and impact of the venture capital arm (initial version).
• Operational Plan and Budget:
  • A detailed operational plan for the next phase of the Arbitrum Venture Initiative. This should encompass:
    • Timeline and milestones for key activities and deliverables.
    • Resource allocation and roles of core team members.
    • Detailed budget breakdown for the pilot phase and anticipated future phases.

Team

The AVI team brings deep expertise in the investment landscape (web3-specific and Venture Capital), working with early-stage builders and in ecosystem building (Development Venture Capital) around frontier and emerging technologies.

• Lino

  • 3x founder, 15 years of experience in developing startup ecosystems and specifically through VC instruments with development aspects.
  • LinkedIn

• Konstantina

  • Head of Equity Financial Instruments in a EUR 1.3 billion Fund of Funds, focusing on Venture Capital ecosystem development.
  • LinkedIn

• Ana

  • web3 VC, 8 years of experience in web3, deep expertise in investing through executing 80+ deals as well as actively supporting early-stage founders.
  • LinkedIn

• Bart

  • Former design researcher and founder with expertise in entrepreneurship education and community-based venture creation. He is Entrepreneur in Residence (EiR) at Hogeschool Arnhem Nijmegen and Guest Lecturer Entrepreneurship at Wageningen University in The Netherlands.
  • LinkedIn

• Paul

  • Entrepreneur with 7 exits worth $4.7B and later head at Innov8 a $250m Singtel corporate venture fund.
  • LinkedIn

• Joseph [Immutable Lawyer]

  • Lawyer & Regulatory Analyst at Axis Advisory; a digital asset law firm founded by Joseph which is based in Europe; with expertise in legal & corporate structuring as related to capital raising, investment strategies and DAO-Oriented investment vehicles.
  • LinkedIn

• Anish

  • Co-founder, Chief Scientist, and CTO of Panther Protocol, focusing on privacy for DeFi. With over 20 years of experience in security and cryptography, he advised projects like Ripple and Ocean protocol and contributed to Ethereum swarm.
  • LinkedIn

Timeline

• Kickoff: Within 2 weeks after approval and KYC.
• Initial discovery interviews: Weeks 1-2 after kickoff
• Workshops Identifying 3 key areas to focus the research: Weeks 2-4 (the team will try to leverage participating in Brussels to progress this, discovery interviews and recruiting participants for the market consultation)
• Market consultation interviews: Weeks 4-8
• Market Opportunity Mapping workshops: Spanning weeks 6 to 10
• Ecosystem Investment Thesis Development Event: Weeks 10 to 16
• Completion and submission of final report: No later 18 weeks after kickoff

Budget

Core Team for 2 months (interviews, research and report production) Konstantina (lead), Ana, and Lino + Immutable Lawyer, Paul and Anish 1 to 4 d/mo capacity $50,000.00

Data Services and Misc Items $4,000.00

Running a Thesis Development Event (IRL) with 3 preliminary opportunity mapping workshops and continuous community and stakeholder engagement Lino (lead), Bart (facilitator), Ana $45,000.00

Total - $99,000.00

FAQ (answers available on the forum post)

1. What happens if we don’t do this now?
2. What is the outcome of this pilot proposal? How does that tie to a larger vision?
3. How does this compare to other proposals? Aren't other people already working on this (Foundation, Treasury Working Group, GCP, M&A, BoB, Elixir, etc.)?
4. Aren't there parts we need to wait to be established, like the VC entity or OpsCo?
5. How does this relate to the OpsCo and GCP entities?
6. Why is the IRL event not being done in Brussels?
7. What does the timeline actually look like?
8. Given the seniority of the team, why don't you already have a thesis? How come other initiatives seem to have more specific proposals?