Unlocking the Power of DAOversity

Transcript

all right I think our next speaker is is ready to go she is miked up and ready to talk to you um so this next talk is called unlocking the power of diversity uh and it will be given by IA Monro hawm so give her a round of applause as she makes her way onto the stage hey everybody uh so I'm iser I'm one of the co-founders of for the wind Dow uh I'm also the gr lead at the safe Foundation which I just joined very recently and I'm here today to talk to you about unlocking the power of diversity it's a huge passion topic I also think it's incredibly important to our space to the entire Venture Capital space and uh yeah hope you enjoy so uh I'm going to take you on a little bit of

a personal Journey uh and share where We've Ended up and what we're now up to it for the wow but also a little bit how that journey is affecting the way I think about the safe grants program and hopefully maybe share some lessons for others uh to apply in their projects so where it started uh I was 23 years old uh straight out of University and had a passion for Capital allocation uh it sounds like a really boring thing for a 23-year-old to have a passion for but that came essentially from the realization that where people invest their money and where they allocate their capital is actually a message of how how we value things and the things

that we value and the future that we want to create and so I was really excited getting into the Venture Capital industry uh straight out of my Master's Degree I also studied economics so I was passionate about the jobs that can be created by startups um only 20% of employment is actually in startups but 50% of new jobs are created by startups so I realized pretty early on that this was a an exciting space to be if you wanted to define the future and that's where I started um ultimately getting into Venture Capital was incredibly uh exciting I learned a lot I spoke to hundreds of Founders um many of which were incredible and who I

would have loved to fund myself but I also immediately saw issues with the industry uh was very very lacking in diversity uh massively toxic culture uh also just really not good for my health I was drinking a lot going out like I I was not voluntarily it was part of the necessary culture to be sort of working super long hours and then also uh partying even longer and then getting straight back up and doing it again and so I had thought about you know I also feel a little bit too Junior to be in this industry I want to at some point start my own thing before kind of coming into venture capital and and deciding on which Founders should be getting Capital to build their visions and so I thought

I don't know I want to become a Founder I want to maybe maybe do something in fintech I'll go to I'll go to a bank and um that's how I'll figure out how to disrupt Finance um ultimately a very naive decision I feel banking is not the place to go if you want to learn about disruption but uh I did learn some useful things uh while I was in the wealth management industry um I also got a really bad burnout and depression um but the good thing that I took away was that I spent two years looking into the data on where if you if you invest in diverse teams whether it be uh diverse startups teams or diverse funds uh they actually perform better so

if you invest in diverse teams uh they're going to have on average two and a half times more return on your Capital than if the team isn't diverse uh they're less likely to fail and they're also going to interestingly enough exit on average one year faster which in many cases in the VC SE world is something that um people are looking for so I had this understanding that diverse lead funds are good for investors they're also good for society so um when you invest in diverse teams on average they perform considerably better in terms of returns to society not just the financial returns um and that was kind of an aha moment I was sitting

there with burnout depression and uh there were two startups that I had scouted for the VC fund that I worked for that they had decided um in their Infinite Wisdom were not worthy of investment uh but they were becoming billion dooll companies and at the same time I was looking at all of this data which I'll show you in a moment that was saying actually the VC industry is kind of not not working that well um so that was kind of my the emperor has no closed moment I may be completely underqualified to start a VC fund but that's what I'm going to do so where the where where is the no clothes moment so despite the those statistics that we just saw of if you invest in diverse teams they're going to perform considerably better 92% of VC funding is going to all male teams and

it's actually getting worse and I'm not just talking about gender when I talk about diversity but often when you have data it's male female and gender related data so that's often where you have the best data to prove the point um so 92% of EC funding going to all male teams 80% of VC funds actually underperforming public markets and for those of you not not not Finance nerds VC funds are supposed to do a lot better than public markets not underperform them so this is like okay VC funds aren't that good maybe all of these smart guys that are running them are not as smart as they think they are um also I was getting quite passionate about the topic of mental health at the time and um I looked into the data of mental health

and Founders and actually it's pretty shocking uh 50% of Founders suffer from mental health issues at some point I think they're also about eight times as likely to have bipolar disorder um and so it's partially a matter of a partially a matter of actually the kinds of people that become Founders but it's also about how we treat Founders when we invest in them and the kind of Journey that Founders go on uh when they have to scale a company maybe they've never led a company before and suddenly they need to lead a team of a 100 people so that was kind of the proc the thinking process I was going through and then also realizing that unicorns actually kind of suck um so a lot of you may have actually seen this but for those who

haven't only seven out of about 87 unicorns in the past number of years have actually ever made a profit ever ever um so while we like celebrate these unicorns and they're very exciting and sometimes they create returns though going back to this maybe not as many as we think they do um there may actually be better companies to be be funding and that's kind of the the journey that we started to go on so finally I had a problem worth solving I'd been kind of worried about you know I've always wanted to start something and I've never come up with that thing that I'm committed enough um and unfortunately for me it was like let's create a better VC fund um unfortunately I say because

like disrupting the VC industry is a really hard task um the VC space is very ingrained in its ways and the entire system is set up to reinforce the existing structures and the existing power so basically it kind of come down came down to two things who invests defines what we get so the people on the investment team that you have and the kinds of mindsets and preferences that they have they have Define the kinds of things that get funded and the ultimate future that we live in but also how we invest defines what we get if we're looking for fast exits and if we don't care that the founders have ever had any sort of leadership coaching or training then we get toxic cultures like as an

example um Uber was very unpopular we get people that have to work 80 hours a week we get teams that are burning out and funnily enough we also don't get much diversity in those teams so we went on this kind of design thinking journey of how do we design a fund that where the investment team is genuinely diverse where we don't need to push for fast fast exits uh and when founders are actually valued as humans and where we invest in their leadership capabilities right at the beginning before they need to lead a company with 100 people not after they've already burned out become depressed and screwed up the lives of hundreds of employees um and by the way we also wanted to do this while getting better

returns than in traditional VC so no minor task um and as we kind of went along on this journey we started building a team to actually have on this fund and the first major realization that we had was that if you want to build that team you have to find the people to be in that team that have a track record uh because you're never going to get money from LPS if you don't have a track record but the only way to get a track record is to get into VC and who's hiring the people in VC goodness they look all very similar and they like to hire people that look and sound like them so the system reinforces the system and what we really need to do is create a new pipeline of diverse investors

um and so there was this moment of like we can't just create a fund that's not going to change anything we need to find out how to actually increase the pipeline of diverse investors so yeah Venture Capital needs a makeover and the entire structure of VC funding is broken and we got a third requirement basically what we get defines who we invest therefore um if you take this recipe for VC homogeneity that you have get funded by people people who look and talk like you build an exit a company start Angel Investing with people who also built companies create a fund with those angel investor friends that all look and sound like you and then create a fund with those lovely friends and fun

people who look and sound like you this is what you get um that's a great video unfortunately I couldn't link and play it but um this is what most VC funds look like even though they will make a lot of PR announcements about how they're looking for equal opportunities and diversity so we added to the wish list how do we design a new funding model where investors actually can come from nontraditional backgrounds where they can work part-time where if they're recovering from burnout and depression like I was they can still contribute to a fund and not work an 80h hour work week um we also wanted to create a pipeline where succeeding and the old model wasn't the only way of

getting in and honestly we were really close to giving up we took about half a year off at one point because it was like how the hell are we supposed to do this but then someone told us about daos and it found it it felt at that moment like we'd found the Holy Grail everything that we'd been asking the universe for in a way suddenly appeared in the form of venture DS um the first one that we had seen was the LA uh which was the first Venture da with a legal entity and it was really exciting because we had this image suddenly of what the future of investing could look like and we said the future of venture investing is decentralized um we can do a better job of sourcing deals because we have a much

greater pipeline we have much more investors in Aventure the Lao for example had 99 investors so if you compare 99 investors in a fund to three or four the amount of diversity that you can get into that fund is just so much greater um we can do better screening because with those diverse investors uh 99 people looking at a deal versus three or four you're going to get a lot more insight uh potentially also from experts in a particular space as to whether that is actually something that you want to invest in and whether the idea has Merit and what potential pitfalls might come but also when it comes to supporting the portfolio that you then have when you have three or four investors there's only so much

support you can give but if you look at a dow that has 99 investors and each of those can jump in at a point where it makes or if you look at a dow with thousands of members potentially that's a huge difference and if you get that right there's a way of actually supporting your portfolio and making the Journey of being a Founder a much less lonely one so that was kind of the vision that we got to but we also realized at about the same time that Venture dos are still a massive DIY project we kind of had seen the AA catalog and then we'd gone and bought this thing in our heads and realized that Venture DS were very far from being perfect and that a lot of the stuff that we needed to create the perfect Venture towel still needed to be

built so 3 years in I'm like a massive WEP three in Dow Maxi um but it's been a long journey and it's still we still have a long way to go both us as for the win but also the space as a whole um and we kind of have this realization that what we need to build is something that makes it easy for people to become investors so we're talking about the Venture duse case one of the issues that we came across was the fact that if you want to be part of a true Venture dial you have to be an accredited investor and when we were thinking about how do we make the investor investment space more diverse it didn't make a lot of sense to us to actually only on board accredited investors because then we're

just more or less again faced with the same problem of you get what you already have so we had to think about new ways of thinking of around Venture dos and for the win our solution was that we actually created a social da first that anybody can be a member of um and that was something we put together about a year ago and in the past year we've been building up our membership and we've been very happy to say we've been growing very well um but we've also been working on an app um and the idea of this app is that actually the whole pipeline of startups anybody can find a startup anybody can suggest a startup and actually in the traditional

VC world that's already happening it's just that at the moment the only people who are benefiting from finding the startup are the investors so I would imagine that there's actually a lot of people in this room have suggested a startup to someone to invest in but I would imagine that a much much much smaller number who have ever gotten returns from that or who have a track record of investing where they can say I I was the first person to notice that startup so our idea here is to essentially create an app where anybody anywhere can suggest a startup for investment and they can stake tokens and signal to investors that these are startups worth looking at and then we as a dow can have a

more curated uh pipeline that we look through but essentially if somebody has signaled to us early on that this is something worth looking at that there's a bounty and reward uh system and that they can build an onchain track record so that if that startup that they found in 10 years becomes the billion dollar startup they have a track record and can go out and talk about raising a fund uh and if we want change in the Venture industry we need more people like that raising funds and less egos so that's something that we're working on but this is not the whole answer it's just one thing and I also joined safe recently so I just wanted to share a little bit about how I'm thinking about the grants program and how the learnings that I've

had from that process are transferring over to the stuff that we're doing at safe so and these appli generally so please feel free to steal them for what you're doing but what do we need to be doing more of I think we need to be Thinking Beyond devs so devs are incredibly important for building the technology that we want to build but we also need product designers we need design thinkers we need ux designers we need scientists uh we need marketers we need communicators like the startups that I've in my experience the ones that were looked great and also really did great were actually ones that had really great prod marketing and that's something that I don't think many people think about hiring for early on so let's think Beyond devs when we're trying to

create a pipeline of talent in web 3 Let's Talk less about the technology less about various rollups and more about real world problems that we can solve together um let's create grants teams and councils uh for grants that are actually more diverse and that's something I certainly am thinking about and I notice that many in safe are thinking about how do we actually create create a diverse team and how do we when we create a council from the Dow how do we make sure that we get diverse perspectives into that Council and not just the same old thing also I think that incredibly useful for many large Dows is we can actually leverage the wisdom of the crowd we don't have to do everything as

a core team and centrally we have this incredible community of talent that can help us find great talent they can help us filter that talent and they can help us actually Foster and support that Talent so figuring out how to do that best at safe is something that I'm really excited about also just reaching new audiences I think we spend a lot of time thinking about specific audiences and that if we broaden that lens we're going to do a lot better as an ecosystem and finally just thinking about Dow Governor diversity how do we actually get people into governance in Dows uh my experience honestly is that so many things in the even though I was heavily into the web 3 ecosystem it wasn't actually that obvious to me how to get

involved in Dow governance so I think really promoting having fellowships having these things that you don't actually have to be in web 3 for three years to find out how to start earning money and becoming a governor and contributing to a dow in a meaningful way and building a reputation so I think that's it for today I just want to leave you with one final thing money is more than a transmission of values my money but also how do I invest my money and what impact is that having on the world thank you very much okay look at the any questions should look at the screen look at the screen okay uh is there a financial

literacy Gap you have to address when educating for the VCS class absolutely so one of the things that we've been doing at for the wind out in the early stages of building up the social Dow is actually running cohorts of venture capital training training for people uh targeted to people who've never done anything in the investment industry at all so we did 8we cohorts I think we've done them now three times uh and we brought in people from Bank Clos Dow we brought in people from for the wind da uh and we had a really diverse bunch of people some of them had actually been VC investors before but they were really interested in what we had to say some of them had never touched Finance in their lives uh and a lot of them found it really helpful also Founders actually

found it really helpful to understand the way the industry works and to know how things are kind of going so yeah definitely there's a huge gap also there's a huge gap when it comes to educating family offices and LPS on investing in web 3 and actually potentially getting involved in web 3 they think it's all scams and I think there's a lot of work we need to do when I say talking about real world problems I think that we need to do a better job in web 3 of communicating the real world problems that we can solve uh and one of the initiatives I'm actually working on with Victoria is dalor uh so we're trying to sort of disrupt disrupt the um Forbes 30 and the 30 type model and have a dow that democratically and transparently curates talent in the web

3 space so that not not not just people who are already successful can actually be seen and heard any other questions there's one over there thank you thank you you it's very interesting but I I see that when all these kind of foundings get together and what together they want to work with you too and integrate with you what what is your approach when you're trying to work with traditional foundings or are you not doing that with traditional funds yeah because uh usually there are a lot

of people funding these companies yeah so at the moment there is a lot of these kind of founding so maybe you can integrate with them too have you tried yeah for sure and that's one thing that we actually one of the reasons that we like the app as a concept is that it's all about creating the pipeline of deal flow uh we don't necessarily even have to invest ourselves to create an impact we can just create a way of making sure that anybody anywhere that's building a great startup can be found and anybody who's capable of finding great startups can find them and so we would like to ultimately use it have it as like pipeline as a service for funds but also as individual Angel Investors hi how interactive would your

social app be because there could be like people that want to add a criteria about a specific industry startups in a specific industry um so that I mean how can you make this how do you think you can make this more Interactive or maybe even more adaptive the social app let's say from the uh criterias and filters that you could use are you working with something yeah no we're not that far yet but it's a great question and I I think it speaks to something important that I don't everybody's going to have a slightly different way of doing the VC pipeline what I would like to create with the app is something that's fairly modular that we have certain things like first you go

to the community or to a large audience then in the middle of the some kind of curation of a select group and beyond that it becomes genuine due diligence but there's many different ways that you could put that Pipeline and that flow together and I would love it to be something that's composable um and even maybe open source that people can actually just build on what we're building great thanks just just Pablo anyone else otherwise thank you very much everybody it's a pleasure to be here and thank you also to Manu uh when we talk about diversity and looking after this space Manu and East Barcelona do an incredible job um of curating a genuine

genuinely diverse set of speakers and participants and I'm really grateful to everyone for that so thanks