CreatorDAO raises $20 million in VC funding to mentor and fund content creators in return for a share of the creators’ earnings.
CEO and co-founder Michael Ma sees the company becoming the Web 3 version of venture capital firm Andreessen Horowitz, from which it raised a portion of its funding.
CreatorDAO came out of stealth to make the announcement and did not raise funds using an initial coin offering. Initial coin offerings are token sales used to raise funds for Web 3 and cryptocurrency companies in a similar vein to how a traditional company would host an initial public offering or IPO. Raising funds using ICOs lowers the barrier to entry and democratizes access to investments.
Decentralized Autonomous Organizations (DAOs) have come in all shapes and sizes and for varied purposes.
In Sep. 2021, Andreessen Horowitz invested $5 million in a Discord chat comprising crypto enthusiasts and artists that later morphed into a DAO, raising $10 million. This fundraising underscores the value potential of online communities that gather on social media platforms.
In Nov. 2021, Constitution DAO became the first DAO to bid for a rare copy of the U.S. Constitution at a Sotheby’s auction. The DAO consisted of 17000 donors, which raised $40 million, demonstrating the concept of a bidding DAO, even though it lost to Citadel CEO Ken Griffin.
Not technically a DAO yet
There is a third class of DAOs setting up to disrupt the venture capital space by raising money from Web 3 investors and deploying capital to projects, placing individuals on equal footing with traditional venture capital firms. That’s the class CreatorDAO falls under, albeit with a slightly different operating model.
Initially, creators will not need to buy a governance token to benefit from mentorship but will need to apply to the DAO. Shortlisted applicants stand to receive coaching from Paris Hilton, an angel investor in CreatorDAO, two former NFL players, and others. Creators would need to pay the DAO from revenue from their business activities.
The lack of a governance token means that CreatorDAO is not a true DAO. At least, not yet. It is still highly centralized until a nucleus of mentors is set up to coach its future members. Communications and logistics still need to be ironed out, according to Ma. The introduction of a governance token will herald a transition to greater autonomy.
Potential in the creator economy
CreatorDAO has raised funds from Hilton and her 11:11 Media company, former One Direction singer Liam Payne and the Chainsmokers. It also received funds from M13, Audacious Ventures, 6th Man Ventures, and Abstract Ventures.
Ma and co-founder Jonathan Wald see great potential in the creator economy. Ma hopes to create a niche for fans of creators in the DAO that can receive awards for supporting artists within the DAO.
Money from the seed round will be used for setting up infrastructure and contributing to new creators.
What do you think about this subject? Write to us and tell us!
Trusted
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
