Why This 111-Year-Old Investment Firm Is Launching a DAO

Bessemer Venture Partners sees it as the most crypto-native way to support founders.

AccessTimeIconMar 17, 2022 at 7:43 p.m. UTC
Updated May 11, 2023 at 5:59 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Bessemer Venture Partners announced last week it had committed $250 million to invest in Web 3 projects, making it the latest venerable venture capital firm to increase its focus on crypto.

However, the Bessemer announcement was unique in two key ways: the capital wasn’t from a crypto-specific fund and the firm concurrently launched a decentralized autonomous organization (DAO).

  • SEC Asking for Ether ETF Filings Update Is 'Somewhat Surprising': Legal Expert
    00:38
    SEC Asking for Ether ETF Filings Update Is 'Somewhat Surprising': Legal Expert
  • MOG Rallies on Anticipation of Spot Ether ETF Approval
    00:56
    MOG Rallies on Anticipation of Spot Ether ETF Approval
  • Ether Jumps on Spot ETF Hopes; Hex Trust Issues Stablecoin on Flare
    01:59
    Ether Jumps on Spot ETF Hopes; Hex Trust Issues Stablecoin on Flare
  • 'Sky Is the Limit' for Bitcoin: Expert
    00:53
    'Sky Is the Limit' for Bitcoin: Expert
  • Sequoia Capital and Bain Capital recently announced large new funds specifically dedicated to investing in crypto projects. Bessemer instead made its $250 million commitment from the firm’s $2.5 billion global growth fund.

    “We’ve always had flexibility from our main funds to be able to invest across roadmap areas of all types,” said Bessemer partner Ethan Kurzweil in an interview with CoinDesk. “And so there’s really no need for us to raise a dedicated fund.”

    But it was the DAO angle that really stood out. Bessemer, a firm that launched 111 years ago as a family office, made its crypto move more distinct – and perhaps more puzzling – with the launch of BessemerDAO.

    “We wanted to provide portfolio services in a new way, both to our founders as well as other founders that we may invite into the DAO,” said Kurzweil. “We figured this was the most crypto-native way to provide portfolio support that we could think of as opposed to just taking our venture style and force-fitting it into crypto.”

    But what does it really mean?

    Kurzweil said there are five core components of what Bessemer hopes the DAO will do and how it will provide portfolio support for founders and companies: talent introductions, business development through networking, community, tokenomics and, eventually, an education track around investment themes and areas of innovation.

    The BessemerDAO Discord channel opened last Thursday and started on-boarding members. The DAO is a token-gated community, with Bessemer granting every member invited to the Discord a special non-fungible token (NFT) that provides access.

    “We want to set up as flexible a structure as possible. There will be a token that everyone gets for being in [the Discord], but then we’re going to see how the incentive structures evolve from there,” said Kurzweil.

    The DAO isn’t decentralized from launch with the Bessemer team in charge of setting things up, he added.

    “There’s a centralized group of people that come together to instate it, give it a purpose, invite the initial cohort of people and get the community going. And then it takes on a life of its own,” said Kurzweil.

    The DAO could eventually have a fund or pooled capital to contribute to various projects, said Kurzweil. He said he doesn’t know when or if this could happen, but Bessemer would “love to help in democratizing private markets, and we’d be fully supportive of that.”

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Brandy Betz

    Brandy covered crypto-related venture capital deals for CoinDesk.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.