The growth and sustainability of BanklessDAO and its projects depends on new regular funding initiatives. DAO members should be incentivized to introduce new funding. This document outlines the basis for issuing a finders fee as a reward for new income streams.
The suggested reward for each funding type is:
- Grants: 10%
- Angel / VC / Venture Club: 5%
- Crowd Funding: 5%
- New Client / Sponsor: 10%
These are Guidelines
These are guidelines and should be considered best-practice, not hard and fast rules, especially when pertaining to projects. Projects may reward any amount that works for them, with the understanding that a lower reward may result in less incentive for finding new clients / income.
Finders fees are available for Level 1 members only. This requirement is to assure funds circulate within the aligned community. Rewards can be shared by the recipient in any way they deem suitable.
Funding Types & Organizational Units
BanklessDAO consists of a variety of organizational units, each with their own multisig and standards on how they can receive external funding. Types of funding and eligibility criteria are as follows:
- Grants: apply for proactive or retroactive funding from grant and funding ecosystems
- Yield: earn yield on existing funds in treasury
- Donations: can receive donations from individuals and other organizations
- Income: can be paid by individuals and external orgs for services
- BanklessDAO: grants, yield, donations
- Guilds: grants, yield, donations
- Departments: grants, yield, donations
- Projects: grants, yield, donations, income
A finders fee is rewarded to new funding streams for an organizational unit. Each organizational unit is mutually exclusive, meaning a fee can be given more than once, but not from the same organizational unit.
Each funding type may require more or less work from the finder.
- Grants: 10%
Eligibility depends on the member facilitating the entire grants process, from start to finish. If they simply advise the community about the programme, but don’t help facilitate, they may not be rewarded anything.
- Angel / VC / Venture Club Funding: 5%
Eligibility depends on connecting the investor to the organizational unit. No further work should be required.
- Crowd Funding: 5%
Eligibility depends on an introduction to the crowd funding platform and facilitating a smooth onboarding to that programme. The finder is not required to market the crowd funding initiative, although it would be in their best interest to do so.
- New Clients / Sponsors (Projects only): 10%
Eligibility depends on connecting the client to the project. No further work is required, although serving as an adept client manager may result in a higher spend, and a larger reward.
Each project, especially those with active income streams, should note their finders fee policy directly on their Notion page. In the case no finders fee policy exists, members should refer to this document for guidance.
Legal and Tax Compliance
Each individual (the finder) is responsible for reporting income through their appropriate jurisdiction, and shall not hold BanklessDAO or any organisational unit responsible for legal, tax, or regulatory compliance.
Hey @NFThinker, I like this approach; it helps solidify some of the grant hunts we do under DAOstewards for the DAO.
We need to specify who will be coordinating this. Is central coordination needed, or can individuals approach projects and guilds directly? If so, should we consider a DAO-wide policy?
Having a DAO-wide policy without proper legal backtesting could lead to issues, especially when it comes to DeFi activities or attracting investments.
This isn’t currently intended to be enforceable at any level from the DAO’s perspective, while also leaving projects open to their own implementations. Bankless Publishing currently rewards 10% for successful new clients, but they may decide to lower that in future if there are too many leads coming in, or alternatively they could increase to 15% if they wanted to incentivize growth.
Coordination should be between the org unit and the finder.
Regarding legal issues, you raise a good point. I would imagine any compensation at the DAO, Department, or Guild level would need to be in the form of governance tokens. Projects may be required to be registered as a legal entity to reward in stable coins.
Any lawyers reading this feel free to weigh in!
Good to have this documented, thank you.
New clients/Sponsors (Projects only) - suggesting that 10% is way high and should be cut down to 5% because no extra work is required. And also there might be additional operational costs for projects which should be considered.
The amounts aren’t set in stone and each project can reward how they see fit. Ultimately the number of new clients a project lands may or may not depend on funders bringing in new business.
@hirokennelly @Trewkat what is the reasoning behind 10% for Bankless Publishing? Why do you feel like that works for you?
We both considered eliminating the finders’ fee and reducing it to 5%. in the end, we wanted to be generous and to incentivize those who help our project grow. It’s honestly not more complicated than that. To me, what’s the downside of paying 10% to a person who brought in a partnership where a deal closed? Would you rather not have the other 90%? Also, @kutubu, I can tell you from being in the middle of deal flows that the folks who bring potential partners to us are working with us to close deals the entire time. @Ornella would be a perfect example of that, and she may tell you that 10% is probably too low for the work required.
Based on some discussions we had in the treasury dept this week @MikeT suggested 20% kickbacks to finders. One of the examples listed was how galas are outsourced to professionals in exchange for a healthy cut of the sponsorships raised. The rationale being that if you sufficiently incentivize talented folks, they will deliver a professional output which will be beneficial for the DAO in the long run in terms of fundraising.
In the end it may depend on the type of work coming in, and the amount of effort put in by the finder to successfully close a deal. For someone who dedicates themselves to the job, it can be a lot of work just finding qualified leads, trying to connect them to the right project, aligning the two party’s visions, and continuing to nurture all the relationships built along the way.