Genesis Fund FAQ
Genesis Fund
What is the Genesis Fund?
The Genesis Fund is an Delaware LLC open to accredited Fight Club members. The Genesis Fund mandate is to make seed and early-stage investments in web3.0 companies and protocols.
Who can join the Genesis Fund?
Fight Club members, including non-US citizens and corporate entities, that qualify as US accredited investors.
How is the Genesis Fund similar and different from traditional VC firms and funds?
The Genesis Fund is a decentralized venture fund within a DAO structure.
Similarities:
- Genesis Fund is structured as a Delaware LLC and offers the same limited liability protection to its members.
- Investments are made via SAFEs or SAFTs.
- An operating agreement dictates the responsibilities and functionalities of members.
Differences:
- Investment decision-making is decentralized and made collectively by members via voting.
- There is no GP as each member is an LP.
- Members are responsible for deal flow and conducting their own due diligence.
- Governance and operations are controlled by smart contracts.
Should investors in the US and elsewhere have concerns about government intervention and regulation?
The Genesis Fund will be fully compliant with all SEC and other pertinent regulations.
Do you accommodate non-US investors?
Non-US investors that qualify as accredited investors may become members of the Genesis Fund. In the future, Fight Club plans to launch an offshore version of the Genesis Fund for non-US members that do not want to be exposed to US regulation and taxation laws.
How can I become an investing member?
Complete KYC to verify accreditation status. Post-close, potential investor members must be approved by the Genesis Fund members before being accepted.
How do members vote?
Genesis Fund members will vote via Moloch v2 smart contracts.
How is my vote counted?
Voting is based on the voting blocks purchased.
Can I quit anytime?
Any member can use Rage Quit to exit and will be able to retrieve their investment with consideration to the stage of investment the Genesis Fund is in.
Do I have to vote or is there a penalty for not voting?
There is no penalty for not voting.
Can I delegate my vote?
Yes, you are able to delegate your vote to another member.
Is there an Operating Agreement?
Yes, the current Operating Agreement is based on The LAO’s Operating Agreement with RageQuit and RageKick functions from MetaCartel Ventures added in. It will be reviewed by an outside attorney.
Investment
What is the minimum investment?
The minimum investment for individuals is $10,000 and for organizations is $50,000 per voting block. These numbers are still preliminary and will be revised until the launch. These minimums were set in an attempt to be as inclusive as possible while still meeting our fund size target.
Is there a maximum investment?
There is a soft maximum investment for investments. This is still being worked out.
How many investors can participate in the VC?
The maximum number of investors is set at 99 members as per SEC laws for the US entity.
Do I need certain skills or credentials to be able to invest?
To invest in the US entity, members must be accredited. This accreditation is based on a minimum annual income of $200,000 per year for two years or minimum assets of $1,000,000 per investor (excluding homes). The SEC has recently expanded its definition of accreditation to include certified investors. Our education arm is in the process of providing the final say on this issue.
Can I invest in individual projects?
No, each member votes on a deal that is done collectively. This is done to ensure maximum efficiency and value for potential projects.
In which currency will the proceeds be paid?
That is yet to be determined.
How will the proceeds be distributed?
That is yet to be determined.
How to participate if I am a U.S.-based non-accredited investor?
There are other avenues to participate, like becoming a junior analyst or deal manager or supporting with operations of FC funds that do not involve becoming a Genesis Fund member.
Accreditation
If I complete Fight Club education, will I become a US accredited investor?
Not at this point, but this is being researched and verified by our education arm.
Projects
What kind of projects does the Genesis Fund invest in?
The Genesis Fund aims to invest in emerging projects within the web3 or DeFi space.
Which stage projects are you focused on?
The Genesis Fund will make early-stage and seed-stage investments.
How will my project receive funding from the Fight Club?
That is yet to be determined.
How do you evaluate projects?
Each investor member will conduct their respective due diligence on projects. Projects are then voted on by the Genesis Fund members for investment consideration.
Does the Genesis Fund do their own due diligence in-house?
Yes, the Genesis Fund can utilize a deal team of Fight Club deal managers and junior analysts for due diligence. But each investor member should base their decision on their respective due diligence.
How long does it take for a project to be evaluated?
This varies on a project-by-project basis but Fund members will do their best to accommodate founders’ timelines.
What are the deal flow velocity and volume goals initially and longer-term?
The current target is 1-2 deals per quarter.
Will it be necessary to be incorporated to receive funds?
Non-investor Contribution
What if I don't want to be an investor, how can I contribute?
Non-investor members are encouraged to join Fight Club as a member and participate via a due diligence team. The education arm of the project will facilitate members becoming junior analysts and researchers who work on due diligence and support deal-flow.
Launch
When will the Genesis Fund launch?
The Genesis Fund is expected to launch in Q2 2022 following the Fight Club NFT sale.
What are the steps needed to launch?
The next steps required for launch:
- [In progress] Outside legal review of the Operating Agreement.
- [Rolling] KYC of all potential investors.
- [Q2 2022] Genesis Fund website testnet.
- [Q3 2022] Genesis Fund website launch.
- [Q4 2022] Soft close of Genesis Fund.
How can I help with the launch?
The Genesis Fund is looking for members to join the Working Group overseeing fund operations. Please go to the Fight Club Discord and access the Genesis Fund #manager-general channel. The Clarity roadmap page has the Genesis Fund remaining and in-progress tasks.
Deal Flow
What if a member is involved in some way with a project that is to be evaluated?
This member would recuse themselves from the voting process due to a conflict of interest.
Is there compensation for bringing deals?
This has been discussed and needs to be agreed upon by Genesis Fund members.