ContinuumDAO Funding Proposal
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The numbers in the example table were arrived at after discussions with some VCs. My own feeling is that we offer CTMDAOVOTE tokens as soon as an investment is made and that these would be convertible 1 CTMDAOVOTE == 1 CTM vested in a veCTM for 4 years, with full voting rights with our TGE. We should not make sales to any person of USA citizenship or residency, any US business, or any person or business in any other proscribed or sanctioned country in line with other recent crypto funding initiatives. I see our series 'A' Fully Diluted valuation at about 400 mm USD at a stage when we have ~100 blockchains connected, several hundred MPC nodes, audited contracts and code, mainnet launched and healthy initial traffic and revenues. We could offer 10% of the Total Supply at this valuation, but that is the subject of another DAO proposal when the time comes. We could launch our token along with the series 'A', together with CEX listings and DEX liquidity.
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@Selqui this all sounds great for Series A in December and I agree with your vision and strategy it will be a great place to be once we reach there
For the seed funding round in June I’m guessing the valuation will need to be a lot lower so I think maybe limit the amount we sell at seed round how many was we thinking maybe 2.5 % or less I’m guessing valuation becomes difficult at this early stage and we need to make many concessions to Series A if we want to attract a serious investor
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@John-CTM We should only sell as many tokens as we need to at this lower valuation to fund ourselves until we can offer a seriously attractive series 'A'. The figure in the table is for 2.5%, with gradually increasing valuation. Note that the suggestion has the sale of the final part spread over 3 months, approaching the mainnet launch. Another objective of this seed round is to attract early stage VCs, who would be able to guide us through the series 'A', as well as other communities (e.g. investment DAOs), who could dramatically increase our community.
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Given the prevailing market dynamics, it seems prudent to establish the seed round valuation within the range of 10 to 20 million. This strategy aims to entice competitive VC investors to join the venture. The primary objective of this funding round is to secure sufficient capital for ongoing project development until we're prepared to unveil an enticing offering to the market and initiate our Series A phase. It's worth noting that excessively valued projects tend to underperform in the secondary market due to inadequate liquidity and insufficient support from retail investors, leading to a decline in token prices.
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Concurred with @0xCTMC ’s point that seed and Series A funding round doesn’t necessarily need to be very high; secondary markets will price the project fairly over time, and launching at a lower FDV benefits participants with no access to primary markets. From my perspective anywhere between 15-25M FDV for seed and 50-100M for Series A, depending on traction and market conditions, seems fair (5% seed, 7.5% Series A would be a fundraise of 4.5-8.75M USD)
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@toast I strongly disagree with this. I can accept that we need to offer our seed round at a low valuation to attract investors, but if we gave future offerings with a shorter unlock period, then these people could dump on early investors, the existing community and future retail holders. Our veCTM voting escrow contract has a 4 year lock, BUT it allows liquidation with a 50% penalty at the beginning, decreasing linearly to 0 after 4 years. So anyone can either sell their veCTM as an NFT, or liquidate at any time. Meanwhile they have voting rights and their veCTM gives them a share of the profits. This is very fair to anyone.
We need to attract investors who hold our long term vision, even if it means losing some potential investors, who would probably not be the right fit for us anyway. I will vote against any proposal to offer a shorter unlock period for investors.
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Our contributors have been working in the past months and also been rewarded in veCTM valued as $1. I assume with TGE it’s fair to put minimum $2 per CTM for DEX liquidity. VeCTM are locked for 4 years and can get unlocked with 50% penalty. If we sell with low FDV for seed we need extra cliff vesting on top of veCTM. There is no way we want seed and investors dumped on our holders.
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To secure and amplify the (ambitions of) the community, i'm a strong advocate of providing community members the opportunity to participate in the seed phase as well. If we take the example from Jerry in the opening post: suppose we aim for 200k and minimum ticket size 50k. That's max 4 investors.
Why not split 1 ticket in smaller tickets for community members. With tickets sizes of 50k and up, it will only be the 'big money' that can participate, while i think we need the community members just as much. And therefor they should be able to buy a real stake and become a real part of the project they believe in.
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@sanderrrrr Hi sanderrrr, you have a good point! The only reason we’re looking for a few seed investors is because we don’t have to deal with so many investors. Should we break down $50k into 5x $10k? Maybe just a group buy into $50k?
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5*10k gives only 5 individuals the opportunity. I'd say tickets of 1k or 2k with a max of 5k per individual.
Maybe we can use a smart contract for this: if is filled 3 weeks before the seed, it's executed. If it's not, money is refunded and we offer only tickets to VC's. Or we accept the partial funding TBD.
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@sanderrrrr I get this. The Community should be have the option to be part of the process. Not sure what the implications are with regards to financial regulations.
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@sanderrrrr I think there should be no cap even for individuals. You can’t police who create more wallets. Put a max allocation on each wallet does looks nicer for later. I think we should aim for $5k minimum but we need to add cliff vesting on top of veCTM 4 years lock.
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One of the reasons for offering at a low valuation to VCs in the seed round is that we don't only need their money. We also expect to leverage their network and their marketing reach to help us grow. Frankly, we don't get that with small retail investors. We also have to conduct KYC, which at this time is simply a burden to us. I'm not in favour of a retail offering at this point. There is a way for the community to get veCTM now though and that is to contribute.
