This proposal suggests the final steps to the process laid out in IIP-32. Continue with the OTC Initiative laid out by IIP-32 and approve selling 92,759 INDEX tokens to Sequoia Capital, White Star Capital, and Blockchain.com Ventures at a price of $24.26 USDC per INDEX. This will bring the total amount raised to $10,000,000 which is the limit authorized in IIP-32, fully completing Index Coop’s treasury diversification efforts.
The OTC sale will be carried out by three separate investors, who will each provide USDC to the treasury as follows:
Sequoia Capital ( @auilag ) - $1 million
- Sequoia helps daring founders build legendary companies, from idea to IPO and beyond.
- In partnering with Sequoia, startups benefit from close to 50 years of tribal knowledge and lessons learned working with companies like Airbnb, Alibaba, Apple, Dropbox, Google, LinkedIn and Stripe early on.
White Star Capital (@neilh @tklocanas ) - $500 thousand
- $50 million crypto fund (investors in Paraswap, Rally, Superfluid, Liquality, Alethea, Ledn, Multis, others)
- Ability to bolster product integrations (Paraswap, Superfluid, Ledn, etc.), distribution partners (institutional tradfi + government LPs that can further distribution past the crypto-natives), upcoming liquid fund (liquidity provisioning)
Blockchain.com Ventures (@samuelharrison ) - $750 thousand
- Investors in Set, 0x, Aave, Zerion, Arbitrum, Eco and many others. Portfolio includes many potential product integration partners with leading consumer on-ramps in various geos, such as Argentina, Brazil, Indonesia and the African continent
- Over 76m wallets allow for material distribution of Index Coop products. Blockchain.com is a top 5 most visited crypto website and accounts for double digit % of all BTC transactions. Support in the exchange and wallet product would offer significant consumer exposure and we have a good track record for listing portfolio companies (Enjin, Aave, BitClout, Origin, Efinity, Sushi)
- Exploring a branded Index product would bring further distribution and product offerings, with a trusted and well recognised brand with almost a decade of operating experience. Blockchain.com 2 is looking to bolster its DeFi offering and INDEX would be a perfect partner
- Significant expertise in building and scaling crypto companies
- Our internal DeFi fund has already been getting exposure to INDEX via providing liquidity in prior programmes. We’d look to expand this project in a more meaningful way going forward
- Top tier legal, regulatory and security expertise which has enabled us to safely and compliantly secure billions of dollars of assets
In April of this year, the community passed IIP-32: Index Sale which laid out the mandate to raise $10 million through a direct sale of the INDEX token to select investors. Through this process, a number of world-class venture capital funds joined our community.
During the months of May and June, conversations with three major funds to participate in the raise were ongoing but were not funded due to their diligence and funding processes, notably Neil from White Star Capital who has been speaking to the BD working group since April. Each fund committed for the remaining $2.25 million in June (the amount short of our original target laid out in IIP-32: Index Sale 2).
These three funds committed to participating in the round in late June, prior to the official OTC closing and deal announcement. They agreed to commit a total of $2.25 million (which would bring us to the full $10 million laid out in the original IIP). At no point did any of the 3 funds halt conversations, waiver on their commitment or backup, even when the price dipped significantly below the sale levels. They committed in June with the full intention of participating and funding the original $10 million OTC deal. Given some time has passed since their commitment and the original IIP, we are bringing this topic back up to the community to close out the original IIP and complete the 2nd and final closing.
- $24.26 USDC per token for a total of 92,759 INDEX Tokens (price is similar if the TWAP was moved to today)
- 18-month linear vest
- Tokens unlock linearly following a 12-month cliff
- Investors can vote with their vested tokens
The voting rights for the INDEX sold in this close of the OTC sale will not have its voting rights activated until an IIP addressing community ownership is passed, or block 13635000 is mined (expected on Nov 15), whichever comes first.
After completion of the sale, the Index Coop will benefit in a number of ways:
- Long-term commitment from world-class investors
- Align long-term incentives around mutual value creation
- Deep connections across traditional finance. These connections will accelerate large scale adoption of our products by major financial institutions
- Significant quantity of stable coins to fully diversify our treasury and guard against any market downturns
- High-level strategic advice and resources (as IC increasingly navigates regulatory concerns and interfaces with more traditional institutions this level of advice and guidance will become increasingly crucial.)
- Approve the close of the OTC sale as described.
- Disapprove the close of the OTC sale as described.
We have worked closely with these three funds over the past four months and built a high degree of trust. Each fund will bring something different to the table and help our community across the board. We are already busy scoping out how each investor can directly contribute to the mission of Index Coop.
I strongly support bringing these investors into our community and welcome feedback around how best to leverage their extensive knowledge and resources.
Alongside this - I firmly believe that Index Coop should set the standard for how DAOs interact with Venture Capital Funds. Both kinds of organizations have important lessons to learn from each other. I look forward to seeing a positive and collaborative discussion around this IIP. Regardless of our final decision, we welcome them into our community as colleagues and potential partners.
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