We have several comments with regard to this proposal:

• We believe there is a need to leverage findings from the AVI pilot before moving forward with this directional snapshot. We’re not convinced about the timing of this temperature check and the push for secure funding, particularly since we still don’t have a concrete report or clear results from the AVI pilot program. The proposal lacks important details on several fronts: it doesn’t clearly explain the cost structure, the process for moving forward, or how the various councils will be chosen.

• There is a need for more specific KPIs, both in the specific milestones for the initial year and a better overview of the whole 6-year length of this initiative. Also given this long program why have you decided to only be exclusive to Arbitrum for one year?

• Agree with @JoJo here https://forum.arbitrum.foundation/t/directional-temperature-check-on-arbitrum-ventures-setup/27668/12?u=castlecapital

• We also share the same concerns raised by others regarding potential conflicts of interest—having the same entity both propose and lead the initiative could be problematic. However, if no other parties are willing to step forward, then having that entity take the lead may still be beneficial. A fair compromise might be to open an election or request for proposals, allowing others to present their plans and budgets. If no suitable alternative emerges, the original proposer could proceed with a stronger mandate.

• Additionally, more clarity is needed on risk management, the mechanics of the proposed $1 million performance bonus, and detailed operating costs. It would also be helpful to understand how ARB tokens will be utilized: Will ARB be allocated directly, or will it need to be liquidated first?

• Regarding the proposed performance bonus: if Farstar stands to receive a 1 million ARB bonus, it would be sensible to tie this reward to a longer period of exclusivity, such as the full six-year term. This should include a clause allowing the DAO to revisit and potentially end exclusivity early if both parties agree or if a DAO vote deems it more beneficial. Such a structure ensures that Farstar remains committed to Arbitrum’s success over the long term, aligning incentives more closely with sustained ecosystem growth.

Overall, we would appreciate more transparency and a clearer rationale before fully supporting this initiative.

We have read many comments with which we fully agree, so to avoid being redundant, we would like to focus on the phases mentioned in the proposal and the voting options.

We understand that we are currently in Phase 2, as you mentioned. However, the timelines for this phase are not entirely clear to us. When does Phase 2 end, and when does Phase 3 begin?

If Phase 3 is scheduled to start six years after a mandate, it would be important to clarify how this timeframe was determined.

Regarding the voting options, we notice that the main goal seems to be assessing whether there is sufficient support for the Fund Farstar. However, we find little information about it in the proposal. It would be helpful to elaborate on the key points that could justify the community's support for this engagement.

We have several comments with regard to this proposal:

• We believe there is a need to leverage findings from the AVI pilot before moving forward with this directional snapshot. We’re not convinced about the timing of this temperature check and the push for secure funding, particularly since we still don’t have a concrete report or clear results from the AVI pilot program. The proposal lacks important details on several fronts: it doesn’t clearly explain the cost structure, the process for moving forward, or how the various councils will be chosen.

• There is a need for more specific KPIs, both in the specific milestones for the initial year and a better overview of the whole 6-year length of this initiative. Also given this long program why have you decided to only be exclusive to Arbitrum for one year?

• Agree with @JoJo here https://forum.arbitrum.foundation/t/directional-temperature-check-on-arbitrum-ventures-setup/27668/12?u=castlecapital

• We also share the same concerns raised by others regarding potential conflicts of interest—having the same entity both propose and lead the initiative could be problematic. However, if no other parties are willing to step forward, then having that entity take the lead may still be beneficial. A fair compromise might be to open an election or request for proposals, allowing others to present their plans and budgets. If no suitable alternative emerges, the original proposer could proceed with a stronger mandate.

• Additionally, more clarity is needed on risk management, the mechanics of the proposed $1 million performance bonus, and detailed operating costs. It would also be helpful to understand how ARB tokens will be utilized: Will ARB be allocated directly, or will it need to be liquidated first?

• Regarding the proposed performance bonus: if Farstar stands to receive a 1 million ARB bonus, it would be sensible to tie this reward to a longer period of exclusivity, such as the full six-year term. This should include a clause allowing the DAO to revisit and potentially end exclusivity early if both parties agree or if a DAO vote deems it more beneficial. Such a structure ensures that Farstar remains committed to Arbitrum’s success over the long term, aligning incentives more closely with sustained ecosystem growth.

Overall, we would appreciate more transparency and a clearer rationale before fully supporting this initiative.

We have read many comments with which we fully agree, so to avoid being redundant, we would like to focus on the phases mentioned in the proposal and the voting options.

We understand that we are currently in Phase 2, as you mentioned. However, the timelines for this phase are not entirely clear to us. When does Phase 2 end, and when does Phase 3 begin?

If Phase 3 is scheduled to start six years after a mandate, it would be important to clarify how this timeframe was determined.

Regarding the voting options, we notice that the main goal seems to be assessing whether there is sufficient support for the Fund Farstar. However, we find little information about it in the proposal. It would be helpful to elaborate on the key points that could justify the community's support for this engagement.

Thank you all for the thoughtful questions and comments! I'm grouping them by topic as follows:

The Interim Expert Council

Jojo, I really understand and appreciate what you are saying. In many ways the CEO approach is not too different in the sense that someone should be able to frame the CEOs mandate and objectives, and they need to be kept accountable and supported. The CEO doing that directly to the DAO, without a commissioned high context and accountability stakeholder group might not produce the best results.

This is what the Expect Council is meant to address and I think it’s the key enabler we should put the priority on.

That’s a good question and is still open for discussion with stakeholders in the DAO. Our thinking so far:

• At least one of the top delegates that has a propensity towards the venture topic. Those would understand the DAO and its dynamics well and the different players trying to impact or benefit from venture investment.
• At least one senior representative of a major professional investor into Arbitrum / OCL. They have an incentive alignment toward the success of the ecosystem and the Arb token and relevant expertise, so can have the right critical view.
• Possibly an external domain expert if we identify a gap and a good fit for such.

The interim investment facility

It’s important to differentiate between the fully fledged long term investment mandates and the interim capacity.

The former is the commitment to make certain investments with a well considered financial return thesis, fund model, etc, where the latter is not. Just the capability to do so if really necessary before the long term mandates are set up.

The former will have very clear KPIs with a systematic portfolio approach, where the latter might not, or not in the same sense.

It could take the form of investments that may end up incongruent from some points of view, but address the relevant concerns about balancing long-term ambition with short-term pragmatism—focusing on smaller, quicker wins to complement goals with longer-term payoff. You can think of that as a short term mechanism comparable to what might otherwise be structured as grant financing, but providing more control and stake for the DAO. E.g. it may be a way to enable a very critical technology infrastructure provider, while the DAO manages the risk via participating in the governance of said provider and makes an ultimately more fair deal.

All of this still needs to be fleshed out a lot more, which will be a subject of a separate Snapshot before it goes into the same or separate Tally as the proposal described in this post.

About Farstar

Thank you for bringing this up. We’ll prioritize bringing this information forward and will make a separate post on that. Stay tuned.

To give a taste Farstar was set up about 7 years ago by me as a wrapper to amalgamate a number of initiatives and a collective of contributors that have been doing similar work together since as early as 2008.

We are mostly builders and investors who got involved with startup ecosystem development efforts mostly out of passion, but later got into various official advisory and capital management roles on behalf of governments, corporations, major institutions, or private investors.

It’s important to note that Farstar hasn’t been set up to have ongoing operations, but rather as a platform to mobilise teams around specific opportunities we care about. Such as the one with Arbitrum here, around which we see great potential for impact that we still need to elaborate more on. Under the current structure we've had over 100 vetted contributors formally engaged in our programs, giving us a very deep pool of talent to tap into to meet emerging challenges. We'll highlight the backgrounds of the ones so far involved with AVI, as well as relevant previous work in the upcoming post.

The Budget and Operational plan

These will be detailed in the upcoming Budget and Operational Plan deliverable of the AVI pilot. Thank you for raising these questions as it helps us respond more clearly to the various considerations. If there are more specific ones, please share them as well.

Treasury management vs Strategic Investments

Treasury management and AVI have distinctly different objectives. One is related to putting the capital to work in a relatively safe way towards generating positive cashflow and growth of the balance sheet. AVI has to do with supporting builders and ecosystem development, while at the same time doing that in a financially sustainable way. Not necessarily bringing the proceeds in the treasury, but recycling them towards ecosystem growth.

Exclusivity

cp0x, the contractual exclusivity terms proposed are one directional for the benefit of Arbitrum DAO, not the other way around.

This should have been expressed more clearly as it looks like it didn’t come across for multiple people. If the contract gets continued in some way after Phase 2, we are committed to offer an option exclusivity terms going forward too. There can be a right of first refusal agreement embedded at this stage as well.

We recognize this concern and it is the reason we set up AVI as a DAO originating initiative open to other contributors besides the people around Farstar. We’ve put a lot of thought in the direction of how to facilitate a genuine effective in-house solution for the creation of the CapCo (which is what this proposal is about). That being said there is a lot of nuance and need for getting in the details and we need to get the right stakeholder group engaged to delve in.

No, not yet, this would be subject of the contracting on the back of this proposal. In terms of resolution of disagreements, this is generally something the AF is mandated to facilitate, however having the Expert Council would also be a part of this process.

Capitive VS Non-captive

Managing such considerations on an ongoing basis will be the core function of the management team on FoF. We have some of our thoughts about the complimentary nature of the two articulated in a forum post that can be found here.

Comparison with the GCP

When we refer to the GCP we mean something very specific. Namely there is a lot of uncharted territory in terms of how to implement investments out of a DAO with an onchain treasury. After 6 months of work from the team there, AF, council to set up the legal structure and bylaws, it gives AVI a flying start by building on top of it.

Thanks for posting this and really love the ongoing discussions.

Few questions from this end:

Is there a contingency plan here if the market conditions shift? We understand there is an opportunity gap but we would be more comfortable supporting this if there are defining conditions under which investments are reevaluated or liquidated if market conditions shift.

Also, regarding Farstar:

Has this been documented with both parties signing? Also, is there a plan to manage any disagreement that may arise between stakeholders and the Farstar team during the one-year partnership period? Besides, we share similar sentiments with @gauntlet and would prefer the vendor produced in-house.

We appreciate all the work the team did to put together the report. While we align with the vision of managing partners incentivized to make long-term investments in Arbitrum's growth, and many of the "vehicles" appear to serve meaningful functions, there is insufficient detail on the operational budget, the expert council, the managing team, and investment strategy to support this proposal. There is also no convincing vision for ROI beyond vague mentions; understanding this early in the process, we'd prefer that delegates have a more concrete understanding of potential deliverables and returns (i.e., KPIs) given the size of the program and its ambition.

Without the following details, it's difficult to be optimistic about the Arbitrum Venture setup as proposed:

• An investment thesis (wasn't this supposed to be part of the Pilot?
• A detailed operational budget.
• A track record of FarStar's successful investments and/or programs.
• A financial disclosure of funds spent in the AVI Pilot.
• Working Group members, organizational, and compensation structure (and rationale for why is this run by a working group?)

It's also not clear why, with a six-year mandate, in which the first year will mostly be setup, Farstar will only have a 1-year exclusivity deal. If the DAO is going to invest in such critical investment infrastructure, we would prefer the vendor provide higher exclusivity, be produced in-house under OpCo, CapCo, or the Foundation, or simply fund a team that has demonstrated a deeper understanding of investment in the web3 space and has a portfolio and track record that delegates can evaluate.

Lastly, the GCP, while not an outright failure, has not yet been proven successful. It feels somewhat premature to pursue both recommendations from their team when they are far from operational and for the DAO to pursue a similar structure at this time.

Thank you for the high-quality proposal report. The proposal, through the evergreen fund and multi-strategy approach, provides a stable investment framework for the development of Arbitrum’s ecosystem. This framework is promising for attracting more developers, projects, and capital over the next six years, driving long-term sustainable growth.

However, I think the budget could be optimized. The current proposal’s budget is quite high and somewhat abstract: $1.5 million plus an additional $1 million in ARB bonuses. What are the expected returns for such a large amount? How is the ROI calculated? These details need to be clarified to gain broader support.

The initial investment direction is also unclear: what fields or projects are the $5 million to $15 million in initial investments targeting? Are there clear priorities? I suggest listing a detailed framework or breakdown for better understanding.

Lastly, more detailed planning for execution is crucial. Effective implementation is the most important aspect.

I think this is a good proposal to discuss. We all understand how a venture fund can impact the long-term growth and reputation of an organization.

Like other delegates, I’d love to see clear KPIs, both for the selected projects and especially for Farstar’s performance. How will this help grow and generate value for the DAO?

Moreover, if some investments don’t pan out, what’s the plan to protect the DAO’s finances and minimize losses?

It seems like more discussion is needed before making a final decision.

The following reflects the views of the Lampros DAO (formerly ‘Lampros Labs DAO’) governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.

Thank you for sharing this detailed proposal. The idea of creating Arbitrum Ventures as a Multistrategy Evergreen Ecosystem Investment Fund is impressive and shows a thoughtful approach to growing the ecosystem.

We do have a few questions about some parts of the proposal:

The $5–$15M range seems quite broad. How will the team decide how much to allocate, and is there a backup plan if some of the investments don’t bring the expected results? Additionally, what process will be used to decide which projects to fund and which ones not to? Will there be clear criteria or community involvement in the decision-making?

Could you explain more about how the captive and non-captive programs will balance short-term needs with long-term goals? Is there a chance that focusing too much on one type could affect the other?

What will be the criteria for choosing the members of the Interim Expert Council? How will their experience guide the setup and growth of the fund?

Overall, this proposal shows great potential to help the Arbitrum ecosystem grow sustainably.

Hello! Thank you for the very detailed proposal.

I have many questions:

1. Why does just the creation of the fund and its maintenance cost 1-1.5 million dollars? How many employees are planned and with what tasks, what salaries?
2. It would also be good to have an understanding of what $750,000 will be spent on - why exactly this cost?
3. You are talking about managing capital from the treasury, but we have another initiative for this, which has already been voted for in Snapshot. How will you separate the functions and will you then have funds?
4. If you take funds from the ARB, then it is not specified how you will convert them into dollars without putting pressure on the token price.
5. The issue of transparency. The Foundation often says that it cannot disclose information with whom and on what terms they enter into agreements. Why will everything be open for you - how are you going to ensure this?
6. I do not quite understand why a startup is asking for an exclusive contract in Arbitrum. This project has only recently been created and has not yet proven anything, how it can do anything.
7. The role of the oversight committee is unclear, what exactly will it do? It is also unclear why funding should be provided for 5-6 years?

In general, I have already voiced my opinion on this issue, namely that best practices should be used, and this means using investment funds that already exist and can ensure proper management of funds. Creating a fund from scratch is a very interesting project, but expensive and without guarantees to even start investing, since only the organization of the structure is planned within a year, with a team that is a startup. I'm a big skeptic about this.

interesting proposal.

Let's fly over for now on the mention of the stip results which, to me, seems like not that relevant in here as introduction.

Idea here from what i read is to setup the basis, through a potential 15M initial capital + 1.5M opex + 1M arb in bonus, to create basically create the capco we have been speaking about for the last 6 months here and in other meetings. Executor would be farstar. It would include the legal setup of the entity, the comp of the team including bonuses. The long term plan is to have this consolidated toward a span of 6 years, with up to 1B in capitalization. All of this should come under the oversight umbrella of the DAO, through a committee/council/etc. Posting this to first have a sense check if i got the high level idea.

Assuming I did, few consideration on my side, totally personal.

In this proposal, I think there are several gaps.

1. The main driver/thesis. There is, to me, a big difference between GCP and this. In GCP, the overarching goal is to push games in web3 and specifically in arbitrum, with a detailed thesis hopefully coming in the short period that will dictacte what type of investment will be done. In here, as far as I can tell, the driver is to have the ability in the DAO to invest through several programs such as incubators and others. I don't think the idea is inheretely wrong, but is not as scoped as the GCP in relation to directo growth of the ecosystem, of Arbitrum. To be more blunt, we are in a moment in which we are literally trying to figure out how to do incentives in a way that makes more sense for us: I have some difficulties in thinking about us doing investments without first crafting a specific rational behind not really the why (is likely a mix of: making money, support growth in arbitrum, expand the reach of arbitrum through weaponization of the dao's treasury as vehicle that can give back not only, hopefully, more capital than what was in, but also innovative implemented idea, kickass builders etc) but the why we want to do it through ventures and not in other ways
2. The structure. This is the start of capco, which i am not against. I am actually in favor. But is following a different path from the opco. Specifically in here we will have farstar working on setting up the capco and signing a 1y exclusivity deal. I am not sure this is in the best interest of the DAO: is the DAO that would have to come up with the CapCo and potentially hire farstar as service provider. I also understand that this initiative should be spearheaded by someone and makes sense for you to come forward, but, here, you are both setting up the initiative and proposing yourself as service provider. The checks and balances on top should be not only broadly discussed but maybe written down by a more independent party, otherwise the risk is just to tailor too much the initiative itself (which as any initiative should be an expression of a dao need) to the skillset and ability of farstar. Which again, is not necessarily wrong, but is worth exploring in a broader way.
3. The timeline and deal. We have a 6y forecasted plan, but an initial 1y exclusivity clause. Not saying I am against, saying numbers feels wacky in this way, because you are proposing here a 1B+ capital in 6 year, but with a 1y exclusivity with 15M which is 1.5% of the sum planned. Feels like there should be more alignment between the timeline, the exclusivity, and the capital deployed during the exclusivity phase. Exclusivity when we only have this low amount committed doesn't feel like a robust deal.

To sum up: i am not against the initiative per se. I think it could be better aligned with the direction the DAO is taking (see opco, gcp, in which we basically source ceo/general partners/etc and then plug in people and service providers) and be more robust. In an extreme example, what would it happen for example if farstart, after 1y, decides to not renew the deal because another dao comes and wants to effectively have the exclusivity? Also, knowing that we are currently figuring out incentives and setting up the opco, is it the exact time to set capco up? Likely is worth starting to talk about this in a broader way. But the way this temp check is posed, it feels like we want to push it right out of the gate, assign a mandate and start scoping the initiative. I am not totally sure this is the exact time to do so, and maybe i am obviously wrong here.

In general I might be just jumping the gun here, not understanding that you indeed want a structure similar to OpCo in which you are service provider. And I might have been jumping the gun on a lot of things, so please let me know if i misinterpreted anything here. Remember as usual, I am just a cow.

Thank you for your proposal! This is an excellent idea. It’s essential for Arbitrum DAO to establish a venture. Not only can it support high-quality projects within the ecosystem, but it can also attract outstanding external projects to migrate to Arbitrum.

I have a few questions:

1. Will the projects you invest in be limited to the Arbitrum ecosystem, or will they include the broader Web3 space?
2. Venture capital is different from grants—invested funds require returns, which is a critical point. How will you determine how much to invest in what project? Will it be entirely decided by the council, or will proposals go through voting in the Arbitrum DAO?
3. Lastly, how do you plan to evaluate your KPIs?

Thank you all for the thoughtful questions and comments! I'm grouping them by topic as follows:

The Interim Expert Council

Jojo, I really understand and appreciate what you are saying. In many ways the CEO approach is not too different in the sense that someone should be able to frame the CEOs mandate and objectives, and they need to be kept accountable and supported. The CEO doing that directly to the DAO, without a commissioned high context and accountability stakeholder group might not produce the best results.

This is what the Expect Council is meant to address and I think it’s the key enabler we should put the priority on.

That’s a good question and is still open for discussion with stakeholders in the DAO. Our thinking so far:

• At least one of the top delegates that has a propensity towards the venture topic. Those would understand the DAO and its dynamics well and the different players trying to impact or benefit from venture investment.
• At least one senior representative of a major professional investor into Arbitrum / OCL. They have an incentive alignment toward the success of the ecosystem and the Arb token and relevant expertise, so can have the right critical view.
• Possibly an external domain expert if we identify a gap and a good fit for such.

The interim investment facility

It’s important to differentiate between the fully fledged long term investment mandates and the interim capacity.

The former is the commitment to make certain investments with a well considered financial return thesis, fund model, etc, where the latter is not. Just the capability to do so if really necessary before the long term mandates are set up.

The former will have very clear KPIs with a systematic portfolio approach, where the latter might not, or not in the same sense.

It could take the form of investments that may end up incongruent from some points of view, but address the relevant concerns about balancing long-term ambition with short-term pragmatism—focusing on smaller, quicker wins to complement goals with longer-term payoff. You can think of that as a short term mechanism comparable to what might otherwise be structured as grant financing, but providing more control and stake for the DAO. E.g. it may be a way to enable a very critical technology infrastructure provider, while the DAO manages the risk via participating in the governance of said provider and makes an ultimately more fair deal.

All of this still needs to be fleshed out a lot more, which will be a subject of a separate Snapshot before it goes into the same or separate Tally as the proposal described in this post.

About Farstar

Thank you for bringing this up. We’ll prioritize bringing this information forward and will make a separate post on that. Stay tuned.

To give a taste Farstar was set up about 7 years ago by me as a wrapper to amalgamate a number of initiatives and a collective of contributors that have been doing similar work together since as early as 2008.

We are mostly builders and investors who got involved with startup ecosystem development efforts mostly out of passion, but later got into various official advisory and capital management roles on behalf of governments, corporations, major institutions, or private investors.

It’s important to note that Farstar hasn’t been set up to have ongoing operations, but rather as a platform to mobilise teams around specific opportunities we care about. Such as the one with Arbitrum here, around which we see great potential for impact that we still need to elaborate more on. Under the current structure we've had over 100 vetted contributors formally engaged in our programs, giving us a very deep pool of talent to tap into to meet emerging challenges. We'll highlight the backgrounds of the ones so far involved with AVI, as well as relevant previous work in the upcoming post.

The Budget and Operational plan

These will be detailed in the upcoming Budget and Operational Plan deliverable of the AVI pilot. Thank you for raising these questions as it helps us respond more clearly to the various considerations. If there are more specific ones, please share them as well.

Treasury management vs Strategic Investments

Treasury management and AVI have distinctly different objectives. One is related to putting the capital to work in a relatively safe way towards generating positive cashflow and growth of the balance sheet. AVI has to do with supporting builders and ecosystem development, while at the same time doing that in a financially sustainable way. Not necessarily bringing the proceeds in the treasury, but recycling them towards ecosystem growth.

Exclusivity

cp0x, the contractual exclusivity terms proposed are one directional for the benefit of Arbitrum DAO, not the other way around.

This should have been expressed more clearly as it looks like it didn’t come across for multiple people. If the contract gets continued in some way after Phase 2, we are committed to offer an option exclusivity terms going forward too. There can be a right of first refusal agreement embedded at this stage as well.

We recognize this concern and it is the reason we set up AVI as a DAO originating initiative open to other contributors besides the people around Farstar. We’ve put a lot of thought in the direction of how to facilitate a genuine effective in-house solution for the creation of the CapCo (which is what this proposal is about). That being said there is a lot of nuance and need for getting in the details and we need to get the right stakeholder group engaged to delve in.

No, not yet, this would be subject of the contracting on the back of this proposal. In terms of resolution of disagreements, this is generally something the AF is mandated to facilitate, however having the Expert Council would also be a part of this process.

Capitive VS Non-captive

Managing such considerations on an ongoing basis will be the core function of the management team on FoF. We have some of our thoughts about the complimentary nature of the two articulated in a forum post that can be found here.

Comparison with the GCP

When we refer to the GCP we mean something very specific. Namely there is a lot of uncharted territory in terms of how to implement investments out of a DAO with an onchain treasury. After 6 months of work from the team there, AF, council to set up the legal structure and bylaws, it gives AVI a flying start by building on top of it.

Thanks for posting this and really love the ongoing discussions.

Few questions from this end:

Is there a contingency plan here if the market conditions shift? We understand there is an opportunity gap but we would be more comfortable supporting this if there are defining conditions under which investments are reevaluated or liquidated if market conditions shift.

Also, regarding Farstar:

Has this been documented with both parties signing? Also, is there a plan to manage any disagreement that may arise between stakeholders and the Farstar team during the one-year partnership period? Besides, we share similar sentiments with @gauntlet and would prefer the vendor produced in-house.

We appreciate all the work the team did to put together the report. While we align with the vision of managing partners incentivized to make long-term investments in Arbitrum's growth, and many of the "vehicles" appear to serve meaningful functions, there is insufficient detail on the operational budget, the expert council, the managing team, and investment strategy to support this proposal. There is also no convincing vision for ROI beyond vague mentions; understanding this early in the process, we'd prefer that delegates have a more concrete understanding of potential deliverables and returns (i.e., KPIs) given the size of the program and its ambition.

Without the following details, it's difficult to be optimistic about the Arbitrum Venture setup as proposed:

• An investment thesis (wasn't this supposed to be part of the Pilot?
• A detailed operational budget.
• A track record of FarStar's successful investments and/or programs.
• A financial disclosure of funds spent in the AVI Pilot.
• Working Group members, organizational, and compensation structure (and rationale for why is this run by a working group?)

It's also not clear why, with a six-year mandate, in which the first year will mostly be setup, Farstar will only have a 1-year exclusivity deal. If the DAO is going to invest in such critical investment infrastructure, we would prefer the vendor provide higher exclusivity, be produced in-house under OpCo, CapCo, or the Foundation, or simply fund a team that has demonstrated a deeper understanding of investment in the web3 space and has a portfolio and track record that delegates can evaluate.

Lastly, the GCP, while not an outright failure, has not yet been proven successful. It feels somewhat premature to pursue both recommendations from their team when they are far from operational and for the DAO to pursue a similar structure at this time.

Thank you for the high-quality proposal report. The proposal, through the evergreen fund and multi-strategy approach, provides a stable investment framework for the development of Arbitrum’s ecosystem. This framework is promising for attracting more developers, projects, and capital over the next six years, driving long-term sustainable growth.

However, I think the budget could be optimized. The current proposal’s budget is quite high and somewhat abstract: $1.5 million plus an additional $1 million in ARB bonuses. What are the expected returns for such a large amount? How is the ROI calculated? These details need to be clarified to gain broader support.

The initial investment direction is also unclear: what fields or projects are the $5 million to $15 million in initial investments targeting? Are there clear priorities? I suggest listing a detailed framework or breakdown for better understanding.

Lastly, more detailed planning for execution is crucial. Effective implementation is the most important aspect.

I think this is a good proposal to discuss. We all understand how a venture fund can impact the long-term growth and reputation of an organization.

Like other delegates, I’d love to see clear KPIs, both for the selected projects and especially for Farstar’s performance. How will this help grow and generate value for the DAO?

Moreover, if some investments don’t pan out, what’s the plan to protect the DAO’s finances and minimize losses?

It seems like more discussion is needed before making a final decision.

The following reflects the views of the Lampros DAO (formerly ‘Lampros Labs DAO’) governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.

Thank you for sharing this detailed proposal. The idea of creating Arbitrum Ventures as a Multistrategy Evergreen Ecosystem Investment Fund is impressive and shows a thoughtful approach to growing the ecosystem.

We do have a few questions about some parts of the proposal:

The $5–$15M range seems quite broad. How will the team decide how much to allocate, and is there a backup plan if some of the investments don’t bring the expected results? Additionally, what process will be used to decide which projects to fund and which ones not to? Will there be clear criteria or community involvement in the decision-making?

Could you explain more about how the captive and non-captive programs will balance short-term needs with long-term goals? Is there a chance that focusing too much on one type could affect the other?

What will be the criteria for choosing the members of the Interim Expert Council? How will their experience guide the setup and growth of the fund?

Overall, this proposal shows great potential to help the Arbitrum ecosystem grow sustainably.

Hello! Thank you for the very detailed proposal.

I have many questions:

1. Why does just the creation of the fund and its maintenance cost 1-1.5 million dollars? How many employees are planned and with what tasks, what salaries?
2. It would also be good to have an understanding of what $750,000 will be spent on - why exactly this cost?
3. You are talking about managing capital from the treasury, but we have another initiative for this, which has already been voted for in Snapshot. How will you separate the functions and will you then have funds?
4. If you take funds from the ARB, then it is not specified how you will convert them into dollars without putting pressure on the token price.
5. The issue of transparency. The Foundation often says that it cannot disclose information with whom and on what terms they enter into agreements. Why will everything be open for you - how are you going to ensure this?
6. I do not quite understand why a startup is asking for an exclusive contract in Arbitrum. This project has only recently been created and has not yet proven anything, how it can do anything.
7. The role of the oversight committee is unclear, what exactly will it do? It is also unclear why funding should be provided for 5-6 years?

In general, I have already voiced my opinion on this issue, namely that best practices should be used, and this means using investment funds that already exist and can ensure proper management of funds. Creating a fund from scratch is a very interesting project, but expensive and without guarantees to even start investing, since only the organization of the structure is planned within a year, with a team that is a startup. I'm a big skeptic about this.

interesting proposal.

Let's fly over for now on the mention of the stip results which, to me, seems like not that relevant in here as introduction.

Idea here from what i read is to setup the basis, through a potential 15M initial capital + 1.5M opex + 1M arb in bonus, to create basically create the capco we have been speaking about for the last 6 months here and in other meetings. Executor would be farstar. It would include the legal setup of the entity, the comp of the team including bonuses. The long term plan is to have this consolidated toward a span of 6 years, with up to 1B in capitalization. All of this should come under the oversight umbrella of the DAO, through a committee/council/etc. Posting this to first have a sense check if i got the high level idea.

Assuming I did, few consideration on my side, totally personal.

In this proposal, I think there are several gaps.

1. The main driver/thesis. There is, to me, a big difference between GCP and this. In GCP, the overarching goal is to push games in web3 and specifically in arbitrum, with a detailed thesis hopefully coming in the short period that will dictacte what type of investment will be done. In here, as far as I can tell, the driver is to have the ability in the DAO to invest through several programs such as incubators and others. I don't think the idea is inheretely wrong, but is not as scoped as the GCP in relation to directo growth of the ecosystem, of Arbitrum. To be more blunt, we are in a moment in which we are literally trying to figure out how to do incentives in a way that makes more sense for us: I have some difficulties in thinking about us doing investments without first crafting a specific rational behind not really the why (is likely a mix of: making money, support growth in arbitrum, expand the reach of arbitrum through weaponization of the dao's treasury as vehicle that can give back not only, hopefully, more capital than what was in, but also innovative implemented idea, kickass builders etc) but the why we want to do it through ventures and not in other ways
2. The structure. This is the start of capco, which i am not against. I am actually in favor. But is following a different path from the opco. Specifically in here we will have farstar working on setting up the capco and signing a 1y exclusivity deal. I am not sure this is in the best interest of the DAO: is the DAO that would have to come up with the CapCo and potentially hire farstar as service provider. I also understand that this initiative should be spearheaded by someone and makes sense for you to come forward, but, here, you are both setting up the initiative and proposing yourself as service provider. The checks and balances on top should be not only broadly discussed but maybe written down by a more independent party, otherwise the risk is just to tailor too much the initiative itself (which as any initiative should be an expression of a dao need) to the skillset and ability of farstar. Which again, is not necessarily wrong, but is worth exploring in a broader way.
3. The timeline and deal. We have a 6y forecasted plan, but an initial 1y exclusivity clause. Not saying I am against, saying numbers feels wacky in this way, because you are proposing here a 1B+ capital in 6 year, but with a 1y exclusivity with 15M which is 1.5% of the sum planned. Feels like there should be more alignment between the timeline, the exclusivity, and the capital deployed during the exclusivity phase. Exclusivity when we only have this low amount committed doesn't feel like a robust deal.

To sum up: i am not against the initiative per se. I think it could be better aligned with the direction the DAO is taking (see opco, gcp, in which we basically source ceo/general partners/etc and then plug in people and service providers) and be more robust. In an extreme example, what would it happen for example if farstart, after 1y, decides to not renew the deal because another dao comes and wants to effectively have the exclusivity? Also, knowing that we are currently figuring out incentives and setting up the opco, is it the exact time to set capco up? Likely is worth starting to talk about this in a broader way. But the way this temp check is posed, it feels like we want to push it right out of the gate, assign a mandate and start scoping the initiative. I am not totally sure this is the exact time to do so, and maybe i am obviously wrong here.

In general I might be just jumping the gun here, not understanding that you indeed want a structure similar to OpCo in which you are service provider. And I might have been jumping the gun on a lot of things, so please let me know if i misinterpreted anything here. Remember as usual, I am just a cow.