Hydra Ventures, a newly launched DAO(Decentralized Autonomous Organization) is shaking the world of fund of funds as it raises $10 million for other DAOs. Before I go any further, it is important to note that DAOs are a collection of organizations and entities with no central Authority. The DAOs instead utilize blockchain technology for governance and allow the entities to vote in order to reach consensus if need arises. DAOs are still nascent and data indicates that there are only 40 in existence currently. The funds raised by Hydra Ventures DAO will be used to build a DAO that will back other investment DAOs. The firm is a brainchild of venture investor who is also a partner at 1kx venture firm. Hydra Ventures is also backed by prominent investors like 1kx, ConsenSys and Seed club. The fund-of-funds model being utilized by Hydra Ventures is set to shake the sector as it is an innovative approach towards funding the crypto industry.
According to pet3rpan, the brain behind Hydra ventures. this is the first time builders are operating a fund-of-funds as opposed to the norm where most people operating such funds come from institutional capital backgrounds. This is the first time active direct ecosystem participants are operating such a fund in such crypto-native way. Pet3rpan was involved in the creation of one of the first investment DAOs, MetaCartel Ventures which has 75 members and managed to invest over $13 million into more than 70 projects including GitCoin. Pet3rpan who is also a partner at 1kx initially thought that the rapid deployment of investment DAOs was a drawback but has since changed his mind. He now sees them as an advantage while noting that they are amazing mechanisms for indexing exposure across certain ecosystems or market focus. Hydra ventures is targeting to invest in 30 to 40 DAOs accounting for 10% of the investment DAO itself.
The core team of Hydra Ventures has been drawn from other numerous organizations and brings with it valuable experience that could be used in navigating the challenges of tax, accounting and legal matters when it comes to operation of DAOs. To streamline these issues, Hydra Venture will integrate Things3, an operations-focused service DAO. According to partners from other DAOs, Hydra Ventures is well positioned to pioneer the DAO fund of funds model. The venture is particularly keen on investing in DAOS with a strong investment thesis. Hydra ventures started its fundraising rounds in June last year and closed the round in January this year. The funds are then set to be stored in a set of diversified stablecoins from where they will be deployed in a period of 3 years.
