Will the Next Generation of Elon Musks and Jack Dorseys Operate DAOs? 🤔 Let’s look at how DAOs might permanently alter the entrepreneurial landscape, and maybe even the world economy.
, a16z representative wrote that “FWB has become the de facto home of web3’s growing creative class” and that by buying into the DAO, a16z is poised to capture some of the financial upsides of the DAOs creative output.
In contrast, DAOs give any person with a stake in the company, as well as people who work for the company, just as much say in how it is run and organized as the founders and majority shareholders. So while DAOs and corporations are both trying to make a profit, they take very different approaches. There are more than 3 million cooperatives up and running today, and about 12% of people work for or are a member of a cooperative. In fact, Mondragon, which is the seventh-largest company in Spain, has been run as a cooperative since 1956 and has an annual revenue of $12.1 billion. So who’s to say that corporations are necessarily the most profitable way to run businesses?Both are democratically run;Both are managed in the interest of the people who actually work for them.
A DAO’s heaviest overhead is usually to develop its initial code, and, if necessary, rent some server space for hosting a blockchain. Both are preferable when compared with the aforementioned office space and equipment of traditional businesses. Of course, a DAO could also go down the traditional investment route by sourcing funds from venture capitalists, angel investors, or investment banks, just as a traditional business. So we could say that DAOs have all the traditional avenues of investment open to them in addition to crowdfunding through governanceAnd let’s not forget that token sales can require considerably less work to raise funds when compared to pitching ten venture capital firms consecutively.
So now we know what DAOs are and why the next Bill Gates might want to start one, let’s move to the next question: can they?Thanks to the US state of Wyoming, entrepreneurs can run a DAO as a business and have it recognized by the US government., which formally recognized DAOs as proper business structures and gave them the same legal power as limited liability companies.
Before DAOs could compete with corporations like Amazon and Unilever, we would need to see a radical culture shift within the business community. It might even take something truly drastic, like DAOs, and cooperatives only trading with other democratically-run companies to force corporations to decentralize or risk being left behind.
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