šŸŒ³
Aera Force Greenpaper
/
šŸ“ˆ
Fund Structure + Allocation Strategy
šŸ“ˆ

Fund Structure + Allocation Strategy

Overview
Syndicate Structure
Key Syndicate Investor Terms
Portfolio Allocation
Pre-Seed Investments (20% of capital)
Seed Investments (60% of capital)
EIR or Incubation Investments (20% of capital)
Opportunity > Investment Funnel
Investment Policy Notes
Overview
Thereā€™s a bit of math and percentages below, which we encourage you to read through. In the early days, Aera Forceā€™s first iteration of a DAO syndicate will initially lean on a quasi-traditional venture model while folding in collaborative and participatory elements. We will focus our initial experimentation on collaboration and opportunities for community members (non-accredited investors) to support the DAO and earn bounties and/or upside (carry) in the projects weā€™re investing in.
As our investments become successful and processes become refined as Aera Force grows, we hope to build a platform that can be replicated to launch niche initiatives using this first syndicate as a roadmap.
Syndicate Structure
ā„¹ļø
Aera Force Syndicate 001 will be 2000Īž
Key Syndicate Investor Terms
  • Drawdown: Funds will be committed and drawn down 100% at Day 1.
  • Investment Period: Initial investments are expected, but not guaranteed, to be allocated within 2 years across the portfolio, with any subsequent follow on to be completed by year 3/4.
  • Harvesting Timeline: We expect to be exiting positions faster than a trad-fi fund due to the faster time to liquidity in the crypto and blockchain ecosystems, such that within 24-36 months partial liquidity could be achieved on a deal-by-deal basis. However we may retain portions of deals we believe have further upside for longer periods, and may still be ā€˜managing downā€™ underperforming assets into years 5-7.
  • Fee Structure:
    • 10% to the General Partnership to cover management, legal, accounting and core operational expenses (2% per year x 5 years)
    • 5% Community Pool for community contributors to grow and maintain the DAO (over 5 years)
  • General Partnership Carry:
    • 100% of returns are booked up to Investors until initial investment amounts are returned;
    • Thereafter, returns are divided in an allocation of 80% to investor tokens and 20% to the General Partner, until investment return equals five times (5x) the initial investment;
    • Thereafter, returns are divided in an allocation of 70% to investor tokens and 30% to the General Partner, until investment return equals fifty times (50x) the initial investment; and
    • After a 50x return is achieved, all subsequent returns on investment are allocated 50% to the investor tokens, 30% to the AeraForce Treasury which funds will be used for non-profit and ecosystem accelerator grants, and 20% to the General Partner.
    • See ā€œAeraForce Fund General Partnershipā€ for further example of calculations owed to the GP on a hypothetical investment return.
Ā 

Table

Syndicate Proceeds Breakdown
Classification
Allocation
Breakdown
Use of Proceeds
Syndicate Management Fee
200Īž (10%)
2% Management Fee per year, assumed 5 year active management cycle (aggregate of 10% on initial proceeds).
General Partnership management and all core operational costs, external service providers etc.
Community Pool
100Īž (5%)
5% work and earn pool to fund community members contributing to the DAO
Community Members
Treasury
1700Īž (85%)
85% of proceeds (after fund management and community pool allocation) is available to back projects (See "Portfolio Allocationā€ below)
Investments
Ā 
Portfolio Allocation
Aera Forceā€™s first syndicate will deploy throughout 2022-3 in opportunities fitting our thematics and impact goals. We will adapt the lessons and community from this period to create further vehicles where capital can drive the greatest impact for the planet.
Investing efforts will largely be split 80/20 as follows:
  1. 80% - Pre-seed and Seed
    1. Pre-seed: founding teams are aiming to build prototypes to go to market (20%)
    2. Seed: founding teams, companies, projects, or DAOs in the refi ecosystem that are live with working functional activity or very soon will be (60%)
  1. 20% - Entrepreneurs in Residence - internal or external incubation investments or projects
      2. Ā 
      Ā 
Pre-Seed Investments (20% of capital)
ā™¦ļøĀ Investment Size: 20-40Īž (10-20 total)
Founding teams who donā€™t yet have a demonstrated business model but aim to build a prototype to test out a number of hypothesis. This will likely be the first round of capital beyond the founders own resources or friends/family.
Ā 
Seed Investments (60% of capital)
ā™¦ļøĀ Investment Size: 100-200Īž
Projects which have been stood up, have a working prototype or product, ideally with transactions and customers live and active. These are likely to have followed a prior round of funding from external sources.
Ā 
EIR or Incubation Investments (20% of capital)
ā™¦ļøĀ Investment Size: 50-100Īž
We are at the very beginning of the intersection of climate and blockchain innovation, as such we expect to build or back a handful of concept stage projects with strong founding teams. DAO members and founders may propose projects aligned with the Aera Force mission. In some cases, funding may be released on a milestone basis.
Ā 
Opportunity > Investment Funnel
Ā 
As the blockchain-based refi space is nascent it is hard to anticipate the volume of opportunities we will review. However it is anticipated that upwards of 500 opportunities can reasonably be expected to be reviewed during 2022-23. The flow below anticipates a ā€˜conversionā€™ flow of:
  • Approx 10-15% of inbound opportunities make it to a Pre-Screen
  • Approx 50% of Pre-Screen Opportunities convert into full Due Diligence
  • Approx 66% of opportunities undergoing full Due Diligence convert into investments
notion image
Ā 
Investment Policy Notes
  • Aera Forceā€™s first iteration of initial and follow-on investments will progress through the same core investment process. Each will require diligence and new approval through a community vote. Investments could be in the form of:
    • Equity Investments
      • Investments in return for equity or convertible notes in a company around the companyā€™s seed stages.
    • Pre-ICO or Token Agreements
      • These investments replace equity in many blockchain investments. Our capital will support projects at early stages in return for a % of future tokens. Or, in return for our communityā€™s strategic support, Aera Force may receive offers to purchase discounted tokens during a projectā€™s launch.
    • Investments in other DAOs
      • Aera Force will consider investments in investment DAOs that focus on catalysing investment in climate-action niches. These might include DAOs creating an accelerator, focusing on a type of climate investments like carbon capture, or driving activist investments. If these DAOs flourish, investments here could generate both immense returns and valuable partnerships for Aera Forceā€™s portfolio.
    • On-Market Tokens
      • Aera Force may consider purchasing on-market tokens where the community proposes that the token is undervalued, meets other valuation-criteria and/or Aera Force can add strategic value. In these cases, the token purchase will follow the same diligence process.
Ā 
Ā 
āž”ļø
Next Page
šŸ¤
Investing in Aera Force
šŸŒ³
Aera Force Greenpaper
/
šŸ“ˆ
Fund Structure + Allocation Strategy
šŸ“ˆ

Fund Structure + Allocation Strategy

Overview
Syndicate Structure
Key Syndicate Investor Terms
Portfolio Allocation
Pre-Seed Investments (20% of capital)
Seed Investments (60% of capital)
EIR or Incubation Investments (20% of capital)
Opportunity > Investment Funnel
Investment Policy Notes
Overview
Thereā€™s a bit of math and percentages below, which we encourage you to read through. In the early days, Aera Forceā€™s first iteration of a DAO syndicate will initially lean on a quasi-traditional venture model while folding in collaborative and participatory elements. We will focus our initial experimentation on collaboration and opportunities for community members (non-accredited investors) to support the DAO and earn bounties and/or upside (carry) in the projects weā€™re investing in.
As our investments become successful and processes become refined as Aera Force grows, we hope to build a platform that can be replicated to launch niche initiatives using this first syndicate as a roadmap.
Syndicate Structure
ā„¹ļø
Aera Force Syndicate 001 will be 2000Īž
Key Syndicate Investor Terms
  • Drawdown: Funds will be committed and drawn down 100% at Day 1.
  • Investment Period: Initial investments are expected, but not guaranteed, to be allocated within 2 years across the portfolio, with any subsequent follow on to be completed by year 3/4.
  • Harvesting Timeline: We expect to be exiting positions faster than a trad-fi fund due to the faster time to liquidity in the crypto and blockchain ecosystems, such that within 24-36 months partial liquidity could be achieved on a deal-by-deal basis. However we may retain portions of deals we believe have further upside for longer periods, and may still be ā€˜managing downā€™ underperforming assets into years 5-7.
  • Fee Structure:
    • 10% to the General Partnership to cover management, legal, accounting and core operational expenses (2% per year x 5 years)
    • 5% Community Pool for community contributors to grow and maintain the DAO (over 5 years)
  • General Partnership Carry:
    • 100% of returns are booked up to Investors until initial investment amounts are returned;
    • Thereafter, returns are divided in an allocation of 80% to investor tokens and 20% to the General Partner, until investment return equals five times (5x) the initial investment;
    • Thereafter, returns are divided in an allocation of 70% to investor tokens and 30% to the General Partner, until investment return equals fifty times (50x) the initial investment; and
    • After a 50x return is achieved, all subsequent returns on investment are allocated 50% to the investor tokens, 30% to the AeraForce Treasury which funds will be used for non-profit and ecosystem accelerator grants, and 20% to the General Partner.
    • See ā€œAeraForce Fund General Partnershipā€ for further example of calculations owed to the GP on a hypothetical investment return.
Ā 

Table

Syndicate Proceeds Breakdown
Classification
Allocation
Breakdown
Use of Proceeds
Syndicate Management Fee
200Īž (10%)
2% Management Fee per year, assumed 5 year active management cycle (aggregate of 10% on initial proceeds).
General Partnership management and all core operational costs, external service providers etc.
Community Pool
100Īž (5%)
5% work and earn pool to fund community members contributing to the DAO
Community Members
Treasury
1700Īž (85%)
85% of proceeds (after fund management and community pool allocation) is available to back projects (See "Portfolio Allocationā€ below)
Investments
Ā 
Portfolio Allocation
Aera Forceā€™s first syndicate will deploy throughout 2022-3 in opportunities fitting our thematics and impact goals. We will adapt the lessons and community from this period to create further vehicles where capital can drive the greatest impact for the planet.
Investing efforts will largely be split 80/20 as follows:
  1. 80% - Pre-seed and Seed
    1. Pre-seed: founding teams are aiming to build prototypes to go to market (20%)
    2. Seed: founding teams, companies, projects, or DAOs in the refi ecosystem that are live with working functional activity or very soon will be (60%)
  1. 20% - Entrepreneurs in Residence - internal or external incubation investments or projects
      2. Ā 
      Ā 
Pre-Seed Investments (20% of capital)
ā™¦ļøĀ Investment Size: 20-40Īž (10-20 total)
Founding teams who donā€™t yet have a demonstrated business model but aim to build a prototype to test out a number of hypothesis. This will likely be the first round of capital beyond the founders own resources or friends/family.
Ā 
Seed Investments (60% of capital)
ā™¦ļøĀ Investment Size: 100-200Īž
Projects which have been stood up, have a working prototype or product, ideally with transactions and customers live and active. These are likely to have followed a prior round of funding from external sources.
Ā 
EIR or Incubation Investments (20% of capital)
ā™¦ļøĀ Investment Size: 50-100Īž
We are at the very beginning of the intersection of climate and blockchain innovation, as such we expect to build or back a handful of concept stage projects with strong founding teams. DAO members and founders may propose projects aligned with the Aera Force mission. In some cases, funding may be released on a milestone basis.
Ā 
Opportunity > Investment Funnel
Ā 
As the blockchain-based refi space is nascent it is hard to anticipate the volume of opportunities we will review. However it is anticipated that upwards of 500 opportunities can reasonably be expected to be reviewed during 2022-23. The flow below anticipates a ā€˜conversionā€™ flow of:
  • Approx 10-15% of inbound opportunities make it to a Pre-Screen
  • Approx 50% of Pre-Screen Opportunities convert into full Due Diligence
  • Approx 66% of opportunities undergoing full Due Diligence convert into investments
notion image
Ā 
Investment Policy Notes
  • Aera Forceā€™s first iteration of initial and follow-on investments will progress through the same core investment process. Each will require diligence and new approval through a community vote. Investments could be in the form of:
    • Equity Investments
      • Investments in return for equity or convertible notes in a company around the companyā€™s seed stages.
    • Pre-ICO or Token Agreements
      • These investments replace equity in many blockchain investments. Our capital will support projects at early stages in return for a % of future tokens. Or, in return for our communityā€™s strategic support, Aera Force may receive offers to purchase discounted tokens during a projectā€™s launch.
    • Investments in other DAOs
      • Aera Force will consider investments in investment DAOs that focus on catalysing investment in climate-action niches. These might include DAOs creating an accelerator, focusing on a type of climate investments like carbon capture, or driving activist investments. If these DAOs flourish, investments here could generate both immense returns and valuable partnerships for Aera Forceā€™s portfolio.
    • On-Market Tokens
      • Aera Force may consider purchasing on-market tokens where the community proposes that the token is undervalued, meets other valuation-criteria and/or Aera Force can add strategic value. In these cases, the token purchase will follow the same diligence process.
Ā 
Ā 
āž”ļø
Next Page
šŸ¤
Investing in Aera Force