- J Markezic and M Bacina
The first rule of Syndicate’s new Web3 Investment Clubs: Talk about them
Decentralised autonomous organisations – or DAOs – are quickly emerging as a relatively new strategy to organise and improve corporate democracy and governance in groups. DAOs have recently been tipped to overtake crypto-venture capital by providing access to people who ordinarily may not have access to deals and founders.
DAO services start-up Syndicate has sought to streamline the way these DAOs are created with the announcement of the new Web3 Investment Club platform.
These Investment Clubs (presently asserting US compliance only) allow up to 99 participants to pool their capital and elect as a group on where to invest the raised capital. Not only does Syndicate’s announcement provide some much needed clarity on how DAOs operate, the announcement is an important step to:
radically transform investing through accessible, effortless, and social Web3 technologies.
Traditional investment clubs will ordinarily share their knowledge, resources and pool their capital to invest in common forms of securities such as stocks, bonds, real estate and emerging cryptocurrencies.
Despite traditional investment clubs utilising the internet to make their investment decision process more efficient, there are still identifiable timing and compliance issues. Groups seeking to enter the investment market are able to easily create and run an investment club natively on the internet – built with the full power and composability of web3. Membership in these Web3 clubs are by invitation only, and all such members are required to participate in investment decisions.
The Web3 platform’s use of smart contracts allow investors to formally associate their club with a US legal entity which they say makes compliance with regulation such as tax obligations easier.
Syndicate’s announcement clearly indicates that they are positioning themselves at the forefront of the DAO environment in order to garner as much engagement from potential small group investors as possible. Whilst Web3 Investment Club are currently US centric, with emerging Australian-founded DAOs such as MODA DAO (which does not advertise investing as a feature), it may only be a matter of time before budding Aussie investors are able to join these clubs.