We believe the notion of partnership in venture capital should be defined by the work we do together

The General Partnership

Photo credits: Unsplash Vanar, a quickly expanding Layer 1 blockchain network, has made a ground-breaking statement about its planned entry into the GameFi sector. They did this by bridging the gap between traditional and Web3 gaming experiences. This calculated step establishes Vanar's position as a major player in pushing the next wave of blockchain usage. Vanar's methodology, distinguished by its ability to smoothly combine a strong blockchain with an extensive set of developer tools, has attracted much interest. This approach has effectively drawn in industry heavyweights such as Google Cloud, giving developers from various industries the resources they need to create scalable applications. In addition, mainstream businesses have discovered a quick and easy approach to investigate Web3 activations inside Vanar's cutting-edge ecosystem. The platform recently achieved a noteworthy accomplishment with the strategic alliance with Viva Games, a well-known Web2 game company with over ten game studios and 700 million+ downloads. With partnerships with renowned companies like Hasbro, Sony, and Disney, Viva Games brings a plethora of expertise to the table. Through this collaboration, a new age of gaming experiences will be ushered in by making it easier for conventional players to enter the realm of blockchain-powered gaming. Jawad Ashraf, CEO of Vanar, emphasized the company's steadfast focus on the mainstream. "Vanar is focused on the mainstream, with billions of consumers in the entertainment space," the speaker declared. Our main emphasis is gaming on Vanar, and we can naturally attract millions of conventional gamers to Web3 thanks to our exciting cooperation with Viva." One indication of Vanar's dedication to the gaming business is the Games ecosystem it created. This ecosystem, specifically designed for the gaming industry, has an extensive range of technologies easily integrated with the blockchain. Fixed fees, lightning-fast transactions, white label markets, metaverse areas, wallets, avatars, and connectivity with their gaming network are just a few of these tools' features. This systematic approach tackles Web3 game creators' difficulties, offering sophisticated and user-friendly tools to spur innovation. With Web3 economics tools and Vanar's Single Sign-On (SSO), the partnership with Viva Games offers a comprehensive strategy for giving conventional players a seamless entrance into the Web3 gaming world. By utilizing Viva Games' vast experience and well-established player base, the collaboration aims to educate casual gamers about the numerous advantages of Web3 technology. As this calculated step comes to pass, it not only strengthens Vanar’s standing in the gaming sector but also highlights its dedication to introducing major game producers to Web3. With its deliberate focus on the GameFi market and its promotion of cooperation with well-known Web2 players, Vanar is positioned to take the lead in transforming the gaming industry. The gaming community has taken notice of the platform's ongoing efforts to empower developers, draw in new users, and mold Web3 gaming's future, and they are excited about how this cooperation will revolutionize the usage of blockchain technology in general. The partnership between Vanar and Viva Games portends well for Web3 gaming. Vanar, with its emphasis on creative technologies and mass accessibility, has the potential to transform the game industry completely. This agreement represents the beginning of an exciting new chapter in the gaming industry's use of blockchain technology. This story was distributed as a release by Jon Stojan Media under HackerNoon’s Brand As An Author Program. Learn more about the program here: https://business.hackernoon.com/brand-as-author

Viva Games and Vanar Chain Paving the Way for the Transformation of Web3 Gaming

ভাইভা গেমস এবং ভ্যানার চেইন ওয়েব3 গেমিং-এর রূপান্তরের পথ প্রশস্ত করছে

Viva Games und Vanar Chain ebnen den Weg für die Transformation des Web3-Gamings

Viva Games y Vanar Chain allanan el camino para la transformación de los juegos Web3

Viva Games et Vanar Chain ouvrent la voie à la transformation du jeu Web3

विवा गेम्स और वानर चेन वेब3 गेमिंग के परिवर्तन का मार्ग प्रशस्त कर रहे हैं

Viva GamesとVanar ChainがWeb3ゲームの変革への道を切り開く

Viva Games와 Vanar Chain이 Web3 게이밍의 변혁을 위한 길을 닦습니다

Viva Games e Vanar Chain abrindo caminho para a transformação dos jogos Web3

Viva Games и Vanar Chain прокладывают путь к трансформации игр Web3

Viva Games ve Vanar Chain, Web3 Oyun Dönüşümünün Yolunu Açıyor

Viva Games và Vanar Chain mở đường cho sự chuyển đổi của trò chơi Web3

Viva Games 和 Vanar Chain 为 Web3 游戏转型铺平道路

An interview with Vintage Investment Partners founder, Alan Feld “The difference between a good fund and a great fund depends on the manager’s ability to identify the winners and the losers early” We caught up with founder and managing partner, , to get his take on the current investment climate, and to learn more about his investment thesis when it comes to investing in venture capital funds. Vintage Investment Partners Alan Feld Alan founded Vintage Investment Partners in 2002, which is now Israel’s leading venture fund of funds, secondary fund and late-stage co-investment team. The firm today manages $1.3 billion through nine funds and a managed account. Alan, how do you and the Vintage team assess a VC fund manager? Venture is all about seeking the really big outcomes and this is all about finding and attracting the truly great entrepreneurs who think big and can execute in a big way. We look for managers who can attract the best entrepreneurs and coach them without micromanaging them. In my many years of working in this industry, I have never seen a seed or early-stage company execute against their first business plan. The great entrepreneurs know how to pivot, how to listen to the market and identify the pain that needs to be addressed, the opportunity to disrupt incumbents or be the category leader in a new, emerging market. The second thing we look for is the ability to effectively manage a venture portfolio. In many cases, the difference between a good fund and a great fund depends on the manager’s ability to identify the winners and the losers early and preserve or increase their percentage holdings in their best companies. Reserve management is crucial for this. How can LPs and GPs build a mutually beneficial partnership? A fund is a partnership. Fundamental to a true partnership is trust. At the end of the day, LPs are essentially giving a blank check to the GP. Obviously returns are crucial. But transparency is also crucial. Transparency means hearing the bad news on a timely basis and not just the good news. It means valuations that are realistic. It means LPA terms that are fair and reasonable. LPs give a lot more slack to GPs that are transparent. Do you deal with first-time funds? If not, why? If yes, what indicators are you looking at before making a decision? We invest in first-time funds, but not in first-time investors. In other words, we look for teams that have individual track records as investors and have come together to start a new firm. Like everything else, it takes a while to learn how to be an effective investor, not only in strong markets (as we have seen in the last eight years), but in weak or turbulent markets. Second, we like to see partners who have worked together in some capacity in the past. A general partnership is like a marriage. We want to know that the partners have the kind of honest and respectful relationship where they can support and challenge each other. Being in the trenches together in the past is a helpful indicator of the relationship in the future. We also invest in small, single GP funds on a very select and limited basis. Investing in emerging managers can be both rewarding and perilous. How difficult is it to invest in first-time funds? It is challenging to invest in first-time funds. But, we also see it as an opportunity. In some cases, when a manager is “proven”, access becomes more challenging in subsequent funds. So, identifying great future managers is important for LPs. Second, relatively few GPs have done a very good job in managing succession. We see our relationship with a GP generally as a multi-fund relationship. We want to ensure that the team is stable and will be able to take the firm forward for at least 20 years. First-time funds, managed well, could be the replacement relationships for those managers who do not manage succession well. How do you get access to the top 10 percent performing funds? There is no shortage of capital available for investment in top decile funds. To a certain extent, LPs are “selling” money to the great GPs. Great GPs are looking for more than just money. They are looking for long term investors who know and are committed to the asset class. They are looking for LPs with a stable source of money who can invest when the asset class is in a down cycle. They want investors who can help with data and guidance based on years of experience as investors in venture funds. Finally, just as Andreessen Horowitz fundamentally changed the venture market by offering a broad basket of services to their portfolio companies, it is time that we as LPs also work for our GPs. In our case, we created a value-added services team at Vintage to help underlying investments of portfolio funds to find potential customers. This is a free service intended to create value for our funds. Over the last two years, we have set up over 500 qualified lead meetings between portfolio companies and potential customers, which have generated tens of millions of dollars of contracts. We are exploring other ways we can add value to our GPs and to their portfolio companies. Is the LP industry too brand name driven? Our investors pay us to generate returns. It is a huge responsibility managing pension, endowment and family office money. We are not looking for logos. We are looking for funds that can generate outsized returns. In many cases, there is an overlap between brand and track record. But we tend to look forward: are the partners who generated the track record still there and motivated? Can the younger partners continue that track record? We have turned down a number of brand name funds because we were not convinced that they would be able to generate top decile returns going forward. Do you find that VCs are now returning much faster to their investors? Is it now a two-year cycle? We have seen several funds return recently after a two-year cycle. My sense is that the next cycle will take longer to deploy. Many of our GPs are looking at the market and concluding that it would be prudent to take their time and raise the bar even higher for new investments. We are encouraging that approach. We are in no rush to deploy our money. Again, as this is an industry of big game hunting, we want our GPs to go after the best companies and wait until they think that those investments represent value in a normalised market. Are European VC funds more risk averse than their US counterparts? I am very careful about generalisations. We have a committed to a number of European GPs and are very pleased with the portfolios that they are building. We are starting to see some very big companies come out of Europe and that would not have happened had GPs not been prepared to take risk. Just Eat was a big risk and was a big outcome for our portfolio funds. Klarna should be for others. The list of potential multi-billion dollar exits that were seeded by European funds is getting increasingly long. I think that European GPs have learned from their US counterparts that this is all about building really big companies and you cannot do that without taking risk. There has been a lot of talk recently regarding initial coin offerings (ICO’s) as a means of raising capital for startups. Can methods like this really disrupt the VC model of fundraising in the near future? Some of our funds are doing this, but I think that the jury is still out. It is way too early to tell if this is a long-term trend. You can catch Alan speaking at the largest gathering of venture investors globally, Venture , which runs alongside Web Summit in Lisbon, Nov 6–9. If you’ve any questions you can get me on twitter, Declan Kelly , or just email investors@websummit.com

The money behind the money: Being an LP in venture

There is a simple legal rule: “everything that is not prohibited by law is Allowed”. While creating a DAO by itself is usually legal, one would run into many troubles trying to engage in any meaningful economic activity with his DAO. Taxes are the first set of conundrums that is particularly hot for US citizens. If you earned any profits with a DAO, you would generally become liable to report the gains, assess, and pay the tax. Otherwise, you may be fined or even put in jail. The payment by itself might not be such trouble. The main issue comes at the tax calculation stage. The rules on crypto-gains and especially on DAO participation are desperately lagging behind emerging business activities. In many cases, the rules become obsolete right at the date of their adoption. It goes on to such a degree that sometimes tax agencies completely give up on precision and humbly ask people just to pay “reasonable taxes”. It tends to get especially complicated when your DAO issues its own tokens and distributes them under various terms. Lack of DAO legal subjectivity is the next issue, which is closely interlinked with the first one. Almost all jurisdictions do not recognize the DAO as a subject of law. The DAO can not make contracts or own property. It can not file a claim or defend its rights. Most countries would treat the DAO as a “general partnership” (including for tax purposes). This brings on the  following consequences: DAO members shall calculate and pay their taxes as persons and as personal gains (sometimes the taxes might be surprisingly high); DAO members would bear unlimited personal liability to counterparts with whom they made contracts, even while acting as a representative of the DAO. Currently, very few jurisdictions have an actual legal framework for the DAO. Only , the US and state, and to some extent — have clear DAO incorporation procedures and treat them as actual subjects of law. Other countries are still the Wild west from a legal standpoint. Lawmakers worldwide are slowly probing their way into DAO regulation, and major jurisdictions are yet to find their own solutions that would fit legacy infrastructure. Marshal islands Delaware Wyoming Swiss All right, you are willing to engage in business via your DAO. What should you do? First off, Yes, you can use your DAO for a meaningful economic activity in most countries. You just have to take some preparatory steps: Take legal advice Consult a lawyer for the current legal landscape of your country regarding DAO and crypto gains that are likely to occur in your business. Do not rely just on Internet articles — their authors do not bear legal responsibility; the data can be obsolete and there is a good chance that you can just misinterpret a correct article because all people are prone to believe what they want to believe. Doing background research is a good idea, but for the sake of reason, consult a lawyer with relevant experience. It is important to understand for what activities you are going to use your DAO because it determines whether you need additional licenses or permissions. In most countries, you must get a license if you: keep crypto-funds of others; manage and invest crypto-funds of others; exchange crypto to other crypto and especially to fiat money; issue and sell your own tokens; deal with security tokens. Generally, you do not need additional licenses as long as you use your DAO as a treasury to make payments and receive rewards under usual contracts with a legally capable entity. Be aware that some countries do not allow crypto as a reward under contracts. Do some research on that matter and avoid those jurisdiction-specific problems as a set-up platform. https://www.blockfi.com/licenses/?embedable=true To obtain some crypto-licenses, governments often demand significant corporate capital, hire residential compliance officers, or rent an office. You shall also expect to pay lawyers for the set-up and accountants to form and submit the reports. The choice of jurisdiction is an important step, and you should consider: the set-up costs (drafting company by-laws, registration, and legal fees); maintenance costs (salaries, office rent, taxes); list of regulated and restricted activities; licenses you need to get and the cost of such an endeavor; personal risks in the case of breaching the law. In practice, it takes some form of legal research to choose an appropriate jurisdiction that would fit your budget and desired activities. There are three solutions that you are likely to stick with after taking legal advice: Register a DAO in a jurisdiction that directly allows that action (the Marshall Islands, Delaware, or Wyoming in the USA); Register a classic legal entity in a crypto-friendly jurisdiction and use your DAO as a multi-signature wallet (BVI, Caymans, Swiss, Singapore); Form a partnership with other persons via a DAO. Let us dive into these options. Direct DAO registration The fancy procedure of a direct DAO registration, which is boasted by a few jurisdictions, does not actually add much to your business flow. It does cut some corners at the set-up stage, but afterward, you essentially manage your DAO almost like a classic legal entity. You file an application to register your DAO and then you file the same tax reports — all as usual. The only difference you will have is that, from the very beginning, a state would recognize blockchain deals made by your DAO as legally valid. The trick is that you can achieve the same result in many other jurisdictions with a classic legal entity. And the prize can be huge because other jurisdictions can offer more attractive options when it comes to taxation or regulated activities. For example, the Marshall Islands would not allow you to use a DAO for for-profit activities. On the other hand, the USA might require you to pay quite high corporate taxes and compliance costs can be severe since US lawyers are among the most highly paid in the profession. Legal entity merged with DAO The second option for doing business as a DAO is to register a classic legal entity in a crypto-friendly jurisdiction and use your DAO as a multi-signature wallet and a voting tool. The idea is that your DAO would not be a subject of law by itself, but it would rather be a tool of your company and will mirror the processes going on within it. Many countries allow paying in crypto and using sophisticated technical tools as an equivalent of a handwritten signature. It means that you can: draft an Article of association of your company; specify in it personal blockchain accounts of shareholders and directors; specify DAO treasury account; describe the procedure of blockchain voting and decision-making; create a DAO that mirrors the power structure of your company. As a result, you get a DAO that acts as the hand of your company. A director can sign a paper contract but the payment would be sent to the DAO account and directors would pass a blockchain vote in order to collectively manage DAO funds. The DAO voting process shall be tuned to mirror the governance procedures of your company when every owner and manager has a white-listed account with appropriate powers. It is a merger of the existing corporate legal framework with blockchain technology. Blockchain vote for corporate resolutions To push it even further, you might look for solutions to hold corporate meetings and pass company motions and resolutions via blockchain DAO votes. It eliminates the necessity of holding a slow and expensive live meeting and empowers to manage your company completely on a blockchain. There are a few solutions that allow one to attach a blockchain signature to a document made in a natural language. Imagine that you propose a motion to . You draft a .pdf file with the full text of the resolution and then put it to the DAO vote. When a DAO member supports the vote, he applies his private key to sign that .pdf file and when the quorum is reached, the resolution deems to be effective. “Appoint Smith a director of “Goldfish LLC” A skilled lawyer can draft an Articles of association that would make legally binding such a blockchain resolution vote for your company and its members. Partnership via DAO This is probably the cheapest and fastest solution. From a legal standpoint, the partnership is not a legal entity but a collective of individuals that jointly do business. A partnership is an ancient and common legal device and it is acknowledged by a majority of jurisdictions and it is usually regulated by a similar set of rules. So, it would not be a problem if a partnership is formed between people of different citizenships — they are likely to receive similar treatment at home. The major advantage of a partnership is that it usually does not require registration. Partners just draft which govern their relationship, responsibilities, decision-making process, and profits distribution. Partners from different countries can wet-sign the by exchanging copies sent via post and that is it. Articles of association Articles of association There is only one-layer taxation for partnerships, i.e., the partnership itself does not pay taxes (since it is not a subject of law). Each partner pays taxes individually in his home jurisdiction, and his tax decisions do not affect other partners. The partnership essentially shifts a significant part of the compliance burden to its members, and each member can individually choose a risk-efficient approach. You can combine the partnership with blockchain voting (see above) and link the blockchain accounts of each partner to their personality and thus launching a legally capable DAO that acts as a forum and a treasury of your partnership. Each partner can make contracts with third parties. The partner can (and shall!) disclose that he acts on behalf of the partnership, but the contractor would have a legal claim not to the whole partnership but only to the contracting partner as an individual who will bear the whole responsibility under the contract. To mitigate that risk, the can specify the joint liability of all partners for the deals made by each of them within their powers. Risks to fair partners caused by the reckless or malicious deals of others can be shielded via a detailed description of the contractual powers of the partners. Articles of association There are plenty of legal devices to protect fair partners from the bad deals of others, like: designate only a specific partner to make contracts with third parties; specify the necessity of getting the approval of other partners before making a deal; specify a value limit for contracts that can be made without the approval of other partners; specify categories of deals that require approval of other partners (like an IP assignment); Deals made by a partner beyond his contractual powers will not affect other partners. It would take a skilled lawyer to carefully draft the of your partnership, which would take into consideration the specifics of personal relationships between partners, their risk appetite, specifics of their DAO activity, rules on loss and profit share, etc. Articles of association However, you should be aware of the following downsides of the partnership: — Unlimited liability: partners are liable as individuals with their whole personal wealth, and a bad deal can bankrupt all partners; — Licensed activities: you are still required to obtain licenses for regulated activities and to bear the respected compliance costs. It is common for governments to not grant most of the licenses to a partnership, requiring them to register a corporation for that. The penalties for breaking the rules on regulated activities will also be borne by partners as individuals. Conclusion Business as a DAO is still in its infancy, and many solutions that work on paper are yet to be probed and tested. One should be particularly mindful while choosing a jurisdiction and a legal form for a DAO business and the tasks that such a regulated DAO is intended to solve. There is no universal “one-size-fits-all” solution. Each case shall be considered individually according to its budget and business specifics. Also published here.

Is It Legal to Do Business as a DAO? 

United States Of America. v. Microsoft Corporation Court Filing by Thomas Penfield Jackson, November 5, 1999 is part of . You can jump to any part in this filing . This is part 32 of 58. HackerNoon’s Legal PDF Series here IBM IBM is both a hardware and a software company. On the hardware side, IBM manufactures and licenses, among other things, Intel-compatible PCs. On the software side, IBM develops and sells, among other things, Intel-compatible PC operating systems and office productivity applications. The IBM PC Company relies heavily on Microsoft’s cooperation to make a profit, for few consumers would buy IBM PC systems if those systems did not work well with Windows and, further, if they did not come with Windows included. IBM’s software division, on the other hand, competes directly with Microsoft in other respects. For instance, IBM has in the past marketed OS/2 as an alternative to Windows, and it currently markets the SmartSuite bundle of office productivity applications as an alternative to Microsoft’s Office suite. The fact that IBM’s software division markets products that compete directly with Microsoft’s most profitable products has frustrated the efforts of the IBM PC Company to maintain a cooperative relationship with the firm that controls the product (Windows) without which the PC Company cannot survive. Whereas Microsoft tried to convince Netscape to move its business in a direction that would not facilitate the emergence of products that would compete with Windows, Microsoft tried to convince IBM to move its business away from products that themselves competed directly with Windows and Office. Microsoft leveraged the fact that the PC Company needed to license Windows at a competitive price and on a timely basis, and the fact that the company needed Microsoft’s support in many more subtle ways. When IBM refused to abate the promotion of those of its own products that competed with Windows and Office, Microsoft punished the IBM PC Company with higher prices, a late license for Windows 95, and the withholding of technical and marketing support. In the summer of 1994, the IBM PC Company told Microsoft that, with respect to licensing Microsoft’s operating-system products, it wanted to be quoted terms just as favorable as those extended to IBM’s competitor, Compaq. It was IBM’s belief that Compaq paid the lowest rate in the industry for Windows and enjoyed unparalleled marketing and technical support from Microsoft. In response to the IBM PC Company’s request, Microsoft proposed that the companies enter into a “Frontline Partnership” similar to the one that existed between Microsoft and Compaq. Pursuant to that proposal, Microsoft and the IBM PC Company would perform joint sales, marketing, and development work, and the PC Company would receive future Microsoft products at the lowest rates in the industry. At the same time that it offered the IBM PC Company the rather general terms in the Frontline Partnership Agreement, Microsoft also offered the PC Company specific reductions in the royalty rate for Windows 95 if the company would focus its marketing and distribution efforts on Microsoft’s new operating system. Specifically, the PC Company would receive an $8 reduction in the per-copy royalty for Windows 95 if it mentioned no other operating systems in advertisements for IBM PCs, adopted Windows 95 as the standard operating system for its employees, and ensured that it was shipping Windows 95 pre-installed on at least fifty percent of its PCs two months after the release of Windows 95. Given the volume of IBM’s PC shipments, the discount would have amounted to savings of between $40 million and $48 million in one year. Of course, accepting the terms would have required IBM, as a practical matter, to abandon its own operating system, OS/2. After all, IBM would have had difficulty convincing customers to adopt its own OS/2 if the company itself had used Microsoft’s Windows 95 and had featured that product to the exclusion of OS/2 in IBM PC advertisements. Representatives from IBM and Microsoft, including Bill Gates, met to discuss the relationship between their companies at an industry conference in November 1994. At that meeting, IBM informed Microsoft that, rather than enter into the Frontline Partnership with Microsoft, IBM was going to pursue an initiative it called “IBM First.” Consistent with the title of the initiative, IBM would aggressively promote IBM’s software products, would not promote any Microsoft products, and would pre-install OS/2 Warp on all of its PCs, including those on which it would also pre-install Windows. IBM thus rejected the terms that would have resulted in an $8 reduction in the per-copy royalty price of Windows 95. True to its word, IBM began vigorous promotion of its software products. This effort included an advertising campaign, starting in late 1994, that extolled OS/2 Warp and disparaged Windows. IBM’s drive to best Microsoft in the PC software venue intensified in June 1995, when IBM reached an agreement with the Lotus Development Corporation for the acquisition of that company. As a consequence of the acquisition, IBM took ownership of the Lotus groupware product, Lotus Notes, and the Lotus SmartSuite bundle of office productivity applications. Microsoft had already identified Notes as a middleware threat, because it presented users with a common interface, and ISVs with a common set of APIs, across multiple platforms. For its part, SmartSuite competed directly with Microsoft Office. In mid-July 1995, IBM announced that it was going to make SmartSuite its primary desktop software offering in the United States. Microsoft did not intend to capitulate. In July, Gates called an executive at the IBM PC Company to berate him about IBM’s public statements denigrating Windows. Just a few days later, Microsoft began to retaliate in earnest against the IBM PC Company. The IBM PC Company had begun negotiations with Microsoft for a Windows 95 license in late March 1995. For the first two months, the negotiations had progressed smoothly and at an expected pace. After IBM announced its intention to acquire Lotus, though, the Microsoft negotiators began canceling meetings with their IBM counterparts, failing to return telephone calls, and delaying the return of marked-up license drafts that they received from IBM. Then, on July 20, 1995, just three days after IBM announced its intention to pre-install SmartSuite on its PCs, a Microsoft executive informed his counterpart at the IBM PC Company that Microsoft was terminating further negotiations with IBM for a license to Windows 95. Microsoft also refused to release to the PC Company the Windows 95 “golden master” code. The PC Company needed the code for its product planning and development, and IBM executives knew that Microsoft had released it to IBM’s OEM competitors on July 17. Microsoft’s purported reason for halting the negotiations was that it wanted first to resolve an ongoing audit of IBM’s past royalty payments to Microsoft for several different operating systems. Prior to the call on July 20, neither company’s management had ever linked the ongoing audit to IBM’s negotiations for a license to Windows 95. IBM was dismayed by the abrupt halt in the license negotiations and the prospect that it might not get a license for Windows 95 until the audit process concluded. IBM’s executives executives surmised that all of its major competitors had already signed licenses for Windows 95. The PC Company would lose a great deal of business to those competitors during the crucial back-to-school season if it could not begin pre-installing Windows 95 on its PCs immediately. The conclusion of the audit appeared to be weeks, if not months, away. The PC Company thus faced the prospect of missing the holiday selling season as well. IBM executives pleaded with Microsoft to uncouple the license negotiations from the ongoing audit and offered Microsoft a $10 million bond that Microsoft could use to indemnify itself against any discrepancies that the audit might ultimately reveal. IBM also offered to add a term to any Windows 95 license agreement whereby IBM would pay penalties and interest if any future audit disclosed under-reporting of royalties by IBM. On August 9, 1995, a senior executive at the IBM PC Company went to Redmond to meet with Joachim Kempin, the Microsoft executive in charge of the firm’s sales to OEMs. At the meeting, Kempin offered to accept a single, lump-sum payment from IBM that would close all outstanding audits. The amount of this payment would be reduced if IBM offered a concession that Kempin could take back to Gates. As one possibility, Kempin suggested that IBM agree to not bundle SmartSuite with its PCs for a period of six months to one year. He explained that the prospect of IBM bundling SmartSuite with its PCs threatened the profit margins that Microsoft derived from Office and constituted a core issue in the relationship between the two companies. The IBM executive rejected Kempin’s suggestion. In a follow-up letter, Kempin stated that Microsoft would require approximately $25 million from IBM in order to settle all outstanding audits. Kempin reiterated that, If you believe that the amount I am asking for is too much, I would be willing to trade certain relationship improving measures for the settlement charges and/or convert some of the amounts into marketing funds if IBM too agrees to promote Microsoft’s software products together with their hardware offerings. The message was clear: IBM could resolve the impasse ostensibly blocking the issuance of a Windows 95 license — the royalties audit — by de-emphasizing those products of its own that competed with Microsoft and instead promoting Microsoft’s products. IBM never agreed to renounce SmartSuite or to increase its support for Microsoft software, and in the end, Microsoft did not grant IBM a license to pre-install Windows 95 until fifteen minutes before the start of Microsoft’s official launch event on August 24, 1995. That same day, the firms brought the audit issue to a close with a settlement agreement under which IBM ultimately paid Microsoft $31 million. The release of Windows 95 had been postponed more than once, and many consumers apparently had been postponing buying PC systems until the new operating system arrived. The pent-up demand caused an initial surge in the sales of PCs loaded with Windows 95. IBM’s OEM competitors reaped the fruits of this surge, but because of the delay in obtaining a license, the IBM PC Company did not. The PC Company also missed the back-to-school market. These lost opportunities cost IBM substantial revenue. Even once the companies had resolved the audit dispute, Microsoft continued to treat the IBM PC Company less favorably than it did the other major OEMs, and Microsoft executives continued to tell PC Company executives that the treatment would improve only if IBM refrained from competing with Microsoft’s software offerings. On January 5, 1996, Kempin sent a letter to a counterpart at the IBM PC Company. In it, Kempin expressed his belief that the PC Company would enjoy a closer, more cooperative relationship with Microsoft if only IBM’s software arm did not compete as aggressively with the products that comprised the core of Microsoft’s business: As long as IBM is working first on their competitive offerings and prefers to fiercely compete with us in critical areas, we should just be honest with each other and admit that such priorities will not lead to a most exciting relationship and might not even make IBM feel good when selling solutions based on Microsoft products. . . .You are a valued OEM customer of Microsoft, with whom we will cooperate as much as your self-imposed restraints allow us to do. Please understand that this is neither my choice or preferred way of doing business with an important company like IBM. In addition, we would like to see the IBM PC company being more actively involved in assisting Microsoft to bring key products to market . . . . To date the IBM PC company has not always been an active participant in these areas - understandable given your own internal product priorities. I hope you can help me to change this. In closing, Kempin wrote, “You get measured in selling more hardware and I firmly believe if you had less conflict with IBM’s software directions you actually could sell more of it.” When Kempin spoke to the same executive at the end of the month, he repeated a message he had delivered more than once before: The fact that the IBM PC Company preinstalled SmartSuite on its PC systems made Microsoft reluctant to help IBM sell more PC systems. After all, the more PC systems IBM sold with SmartSuite, the fewer copies of Office Microsoft could sell. For this reason, as Kempin explained to a group of IBM PC Company representatives in August 1996, Microsoft refused to provide IBM press releases with quotes endorsing any PC system that IBM shipped with SmartSuite. Microsoft later expanded that rule to cover any IBM PCs shipped with the World Book electronic encyclopedia instead of Microsoft’s Encarta. IBM might have been less concerned about Microsoft’s refusal to offer endorsements if such quotes did not appear frequently and prominently in press releases announcing new PC systems from other OEMs such as Compaq. Microsoft’s conspicuous silence with respect to IBM PCs sent the message to customers that IBM’s PCs did not support Windows as well as PCs manufactured by other OEMs did. Microsoft also denied the IBM PC Company access to the so-called “enabling programs” that Microsoft ran for the benefit of OEMs such as Compaq, Hewlett-Packard, and DEC, even though IBM met the prescribed objective criteria for admission. Like the absence of public endorsements, IBM’s exclusion from Microsoft’s enabling programs led customers to question whether the Microsoft software they needed would work optimally with IBM’s PCs. IBM learned through surveys it conducted that the firm had lost between seven and ten large accounts, representing about $180 million in revenue for IBM, because the tension between Microsoft and IBM led customers to doubt that Windows would not work as well with IBM PCs as with PCs produced by firms with which Microsoft was on cordial terms. Microsoft justified its exclusion of the PC Company from the enabling programs with its suspicion that IBM might use the programs to gain entrée with customers and then attempt to sell those customers IBM software instead of Microsoft products. At the same time, a Microsoft executive told a counterpart at IBM that the PC Company would be admitted to the programs when IBM’s CEO repaired his relationship with Bill Gates. Microsoft’s executives were persistent despite IBM’s repeated refusals to sacrifice its own software ambitions to improve its relations with Microsoft. In February 1997, one executive from Microsoft told a group of IBM PC Company executives that Gates might relent in his reluctance to cooperate with their company if IBM moderated its support for Notes and SmartSuite. In a meeting held the next month, Microsoft representatives conditioned fulfillment of two objects of IBM’s desires on the company’s willingness to pre-install Microsoft’s products in the place of competing applications, such as SmartSuite, and objectionable middleware, such as Notes. The first inducement that the Microsoft representatives blandished before the PC Company was early access to Windows source code, which Compaq and a handful of other OEMs enjoyed. IBM wanted this early access in order to ensure its hardware’s contemporaneous compatibility with Microsoft’s operating system products. Next, Microsoft offered IBM permission to certify itself as being compliant with certain hardware requirements that Microsoft imposed (and that customers had come to look for as a sign of an OEM’s ability to support Windows). Self-certification would have decreased the time it took IBM PCs to reach the market, and IBM knew that the privilege was already being extended to some of its main OEM competitors. With respect to both benefits, the representatives from Microsoft explained that Microsoft would extend them to the PC Company on the condition that it stop loading its PC systems with software that threatened Microsoft’s interests. The discriminatory treatment that the IBM PC Company received from Microsoft on account of the “software directions” of its parent company also manifested itself in the royalty price that IBM paid for Windows. In the latter half of the 1990s, IBM (along with Gateway) paid significantly more for Windows than other major OEMs (like Compaq, Dell, and Hewlett- Packard) that were more compliant with Microsoft’s wishes. Finally, Microsoft made its frustration known to IBM by reducing, from three to one, the number of Microsoft OEM account managers handling Microsoft’s operational relationship with the IBM PC Company. This reduced support impaired still further IBM’s ability to test, manufacture, and ship its PCs on schedule, further delaying IBM’s efforts to bring its PC products to market against the competition in a timely manner. In sum, from 1994 to 1997 Microsoft consistently pressured IBM to reduce its support for software products that competed with Microsoft’s offerings, and it used its monopoly power in the market for Intel-compatible PC operating systems to punish IBM for its refusal to cooperate. Whereas, in the case of Netscape, Microsoft tried to induce a company to move its business away from offering software that could weaken the applications barrier to entry, Microsoft’s primary concern with IBM was to reduce the firm’s support for software products that competed directly with Microsoft’s most profitable products, namely Windows and Office. That being said, it must be noted that one of the IBM products to which Microsoft objected, Notes, was like Navigator in that it exposed middleware APIs. In any event, Microsoft’s interactions with Netscape, IBM, Intel, Apple, and RealNetworks all reveal Microsoft’s business strategy of directing its monopoly power toward inducing other companies to abandon projects that threaten Microsoft and toward punishing those companies that resist. Continue reading . here About We bring you the most important technical and insightful public domain court case filings. HackerNoon Legal PDF Series: This court case Civil Action No. 98-1232 (TPJ) retrieved on 2-06-2023, from is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. justice.gov

The History Between IBM and Microsoft

The implications of AI on the Blockchain If you’ve seen the 2016 movie “Nerve” starring Emma Roberts and Dave Franco, you have some idea of what a Blockchain/AI and Distributed Autonomous Organization can be. In the movie the main protagonists play an online social network game, in which participants fulfill “dares” to gain social currency (likes). The “dares” get progressively “dangerous”, and when the protagonists attempt to find the creators of the game (and the servers it is hosted on), in order to shut it down; they realize that there is no single game creator or hosted server, and that the game code is open source, distributed, and powered by the collective group of the tens of thousands that play the game. This is what a DAO or a Distributed Autonomous Organization looks like! While of course the movie is the Hollywood interpretation, they were pretty accurate when it came to describing what a DAO is, who powers it, and what it is capable of. So what really is the DAO and how does Blockchain and AI fit into it!? So before I came across the concept of the DAO, I would read articles on how AI can take over the world. I scoffed at these as the creative, imaginative, and cliched ramblings of Orwellian futurists. Stories of Skynet, Terminator like machines, John Conner, iRobot, are great at garnering big moola at the box office, or for good viewing on Netflix on a lazy Saturday afternoon! When I asked Alexa simple questions, she (or perhaps it!) could not perform the basics of tasks. “Alexa, can you turn on the TV and tell me what the weather is going to be like?” Alexa: “I’m sorry I don’t understand what you mean”, OR Alexa: “Here are the top google results for … blah blah blah!” AI and Machines taking over the world!! Really (scoffs!!)!?? And its 2018, where the heck is my self driving car already!! I found no credibility in the reality of machines and AI taking over the world! However let’s take another look at AI combined with Blockchain, and see the potential implications. Blockchain and AI We all know that Blockchain is a distributed ledger system that is an immutable store of data. This means that data stored on the block chain cannot be changed. Also, a copy of the blockchain is maintained within all the distributed nodes of the blockchain, thereby ensuring additional fault tolerance and redundancy. With the launch of Ethereum and HyperLedger, the concept of using the blockchain to store and execute computer programs became mainstream. Smart Contracts (written in Solidity or Serpent in Ethereum) or Chaincode (written in Go, Javascript, Java), allow users to create computer programs that are stored on the blockchain and can be executed on the Blockchain runtime platforms (eg. EVM-Ethereum), based on any predetermined criteria. A computer program once stored on a Blockchain is impervious to tampering or change, and there is no way to stop it from executing its instructions. The only way to “stop” the code from executing is to bring down the entire blockchain (i.e. the 51% attack). Now imagine that you have an AI program that is stored on the blockchain. The purpose of this AI program may be anything, let’s say the purpose is to have a social network that has a high degree of user stickiness (much like the Nerve App in the movie). Once this program is stored in the Blockchain, the program cannot be changed. Also, there is no central server to shut down the program since the program is replicated and can be executed on every node of the blockchain. Now if the AI is programmed to self sustain, it can power itself on the blockchain with no external intervention. The AI can use part of it’s computing power to gather more user stickiness, and in turn would use the rewards it gets, to invest in more computing power. Blockchain combined with AI can become this unstoppable machine that is powered by every single node of the blockchain and uses its rewards to in turn increase its number of nodes and mining resources. The Decentralized Autonomous Organization So now imagine a computer program, that lives on a Blockchain (so it cannot be changed), and is replicated and executed by every node of that is part of that Blockchain community (so it cannot be shut off, except by controlling 51% of the network). If these computer programs are rules that encoded to run an organization, that is the DAO. A ( ), sometimes labeled a ( ), is an organization that is run through rules encoded as computer programs called smart contracts — Wikipedia decentralized autonomous organization DAO decentralized autonomous corporation DAC Now, in all fairness the concept of the DAO is not as nefarious or maliciously intent as depicted in the movie. In fact the DAO has been a great mechanism for crowdfunding and raising venture capital, without the need for an investment bank or a third party trusted entity. This is because all the rules of the venture/corporation, can be encoded into computer programs (smart contracts) and can be viewed by anyone that is part of the blockchain! DAO is a fairly new concept in organizational structure and is truly a “distributed” organization, with no single entity representing the corporation. The legal status of the DAO corporation is still evolving, although currently a DAO is viewed as a “General Partnership”, with each member of the blockchain having potential unlimited legal liability. In Conclusion So DAO and the Blockchain/AI technology has a great potential. However the Hollywood rendering of these technologies cannot be considered too far fetched, as it is possible for a collective group of individuals driving an AI/Blockchain on their nodes (smartphones/computers) to determine the fate and shape the direction that the AI takes. The distributed nature of Blockchain means that the AI on a Blockchain cannot be easily shutoff, and thus becomes a self perpetuating machine. 👏 Found this post useful? Hit the button below to show how much you liked it :) Follow me on Medium for the latest updates and posts! Read Next: Making sense of the Blockchain Landscape in 2018 Other Articles: BlockChain Demystified: Looking Under the hood of the BlockChain The Microservices Approach to Mobile Application Development

The Distributed Autonomous Organization (DAO) and how Blockchain/AI can take over the network — and…

Alexander, me, and Christopher The best decision I ever made was marrying my wife. The second best decision was becoming a dad. The third best decision was hacking my way to living the small business and life of my dreams. This article is about hacking the stay-at-home dad and small business of your dreams. You’re on your own for the wife part. This is about being a son, a father, and small business owner. This lifestyle is not for the weak-of-heart. In order to pull this off, you’ve got to be on your A-game, and get a lot of help from others. My Sons, My Teachers My sons have been among my greatest teachers, and today, we get to be the best of friends. Every day I ask myself, “How does it get any better than this?” Today, I get to live the life of my dreams, even though it wasn’t always this way. It’s not easy to be a father, and it’s not easy to hack building a small business. It’s harder to pull off both at once. In fact, the latter can and will often get in the way of the former, which can be tragic for a family. With the help of my wife, I was able to do both. Let me make it perfectly clear that had my wife not helped me financially and emotionally to build my small businesses, I would definitely have been living in a box down by a river, or worse. I’ll never forget the feeling of missing my dad when I was a kid. Up until the time I was six, my father worked in corporate sales. As a result, he had to travel often, and sometimes overseas. The good news is, dad always returned home with a cool gift; toy soldiers from London, for example. That same birthday, I sat on the front steps of our family home in Waban, Massachusetts. It was about to get dark when my mom poked her head out the front door and said, “Clifford, it’s getting dark outside. Dinner is almost ready. Please come into the house and get ready for dinner.” “I’m waiting for dad,” and pleaded my case to wait until he drove into the driveway so I could be the first to run up to him and get a hug. My Dad, Role Model, Entrepreneur Clifford Jones, Jr. Best dad, ever, for me. I love my dad profusely, and if you’ve ever missed your father like I have, you know how it feels. Dad passed away almost four years ago as, just after Father’s Day, 2014. I was pretty sure from a young age that it would be my destiny to be much like my father; an entrepreneur, and a great dad. I always wanted to be like dad, so I made believe a lot as a kid, and I dreamed of being an entrepreneur. I made it, and I thank both my mom and dad. I also became a pretty good dad over the years. The only proof of this lies with the son(s). Don’t take my word for it. It was 1970 that my dad convinced mom to let him buy into a hotel and restaurant partnership so he could become the general manager, and move us to New Hampshire, so he could be home with the family every night. It was my dad’s dream to be in business for himself. My father told me many years ago that his primary motivation for being in business was being able to be home almost every night. My dad pulled this off, even though he was not a stay-at-home dad. To me, it was the next best thing! I am a lot like my dad. After his memorial service, someone came up to me and said, “Clifford, you did a great job memorializing your father. When you first started talking, I thought it was your father’s voice, and I turned my head to see you, and I thought, “This man is his father’s son.” How I Became A Stay-At-Home Dad It was later in my life, when our boys were in middle school, that I became a true, stay-at-home dad. I was at home with my sons virtually every night through their formative years, after I left the hotel business and began working for myself. Full disclosure: I was never a stay-at-home dad when our boys were babies. My amazing wife drove that bus, and she did a spectacular job. One of most-epic family stories goes like this. One of my son’s friends asked him, “What does your dad do for work, and how come he’s home all the time?” (This is leading up to the age when kids love it when their parents aren’t home after school. How do I know? I remember being a kid, and how badly we messed around the house on “snow days” or any other when mom nor dad were home to patrol their turf.) My son replied, “I don’t know. I think he’s a stay-at-home dad.” At the time, I worked as a financial planner and investment adviser. Then I started a sales coaching business, and that morphed into marketing automation, content marketing, and conversion marketing consulting. I have had to find my own customers since 1991, when I first started working free of a real boss. I became the boss because I wanted to be with my kids. How To Become A Stay-At-Home Dad Okay, here are my suggestions to pull this off if you truly believe you’re ready. If not, keep dreaming out of the box. This is where it all starts, after the obvious, first step. Duh. Become a dad. If you enjoy your work, and keep stress in check, you can be a better parent. Ideally, your small business or work empowers you to do a great job with your kids, because they come first. Freelancing, remote sales, support, and service jobs/businesses such as coaching or consulting tend to scale and fulfill often. Do what you love even if that sounds cheesy. Choose the business or remote work you will love most. Take some classes for being a dad, read books, hire a coach. I still wonder how come parents don’t take parenting classes. (Maybe this should be #1 looking back on what it was like to be a rookie dad at the young age of 26, with a maturity level closer to 19, according to most who knew me well.) Get some business and direct sales training and experience. Get training. It’s your mindset of commitment that leads to being in business for yourself, and being a stay-at-home dad. This is not for everyone. It’s stressful and demanding being in business for yourself. It’s stressful and demanding being a dad. Combining the two is not easy. Commit. Being in business is not for everyone. If you can pull off a quality of work life as a stay-at-home dad keeping a normal day job, cool. But you have to decide if being in business for yourself is the right thing to do for you and your family. Assess the risks and benefits. I can’t tell you how to start your business in this article. Suffice it to say, once you know how to make a living working from home part or full-time, you need a clear strategy, then concise action steps towards naming your business, pricing your services, finding customers, then getting them to pay you so you can deliver your magic. Create your strategy and plan of action. The next step in starting a business should be getting customers. No, you don’t incorporate, buy a $2,500 domain name, print fancy business cards, buy over-priced home office furniture, and blow through all your startup cash before fearing you need your day job back. Get customers, and get them to pay you. Get customers. Do this in your small business, do this with whatever you can afford to pay yourself, and save the difference! You will need to pay your taxes on time if you are self employed. You will need to manage your expenses, cash flow and finances well to pull this off without losing your mind. Spend less than you make. It’s easy to let your small business suck the life out of you. Think about the cost to your family. Yes, it’s true I wanted to be a small business owner first. But the driver of this was always to be at home every night with my sons, not necessarily to run my business from home, even though it turned out that way. Keep the family first. Balance is bull@#$% when you think about it. We’re constantly micro-balancing. We can thank your brain and central nervous system for this. But when it comes to your family and your small business, you’re will learn over time to micro-balance the many responsibilities and pressures of being at home, and running your business part or full-time. It’s up to you. Learn to micro-balance. Almost every day I write in my journal all the things I’m grateful for in my work and life. I believe this practice has been one of the most-powerful ways I’ve been able to pull off. Practice radical gratitude. If you are me, maybe 30 years from now your kids will be entrepreneurs too. We learned from each other the entire way. Never stop learning and teaching. If I Can Do This, Maybe You Can, Too Christopher and Alexander Jones, our two sons. In closing, I’m typing this article on a Sunday morning. It is Mother’s Day, and today is the also the day we get to celebrate our oldest son’s 30th birthday. I am sitting in my office, and I still feel like a stay-at-home dad. But the kids are long gone, and my wife I get to see them often because they live close to us in Scottsdale, Arizona. Looking back, I’m eternally grateful to my wife, sons, family and friends who helped me become the father and small business man I am today. There is no way I could have pulled of being a stay-at-home dad while building the small business and life of my dreams without the help of many people. The truth is, I’m blessed to have somehow pulled this off. How does it get any better than this?

How To Become A Stay-At-Home Dad While Hacking Your Way To The Small Business and Life of Your…

Decentralized autonomous organizations, or DAOs, hold immense potential to redefine collaboration and wealth distribution, ushering in a new era of equitable participation. By reshaping traditional hierarchical structures and aligning rewards with contribution and labor, DAOs enable token holders to actively shape the organization’s direction and collectively achieve meaningful outcomes. However, alongside these transformative benefits, face a multitude of legal challenges. Regulatory uncertainties, liability risks, tax compliance, and contractual enforceability pose significant obstacles on their path to mainstream acceptance. To ensure compliance with existing laws while preserving their decentralized ethos, DAOs must adopt legal wrappers. DAOs The case on September 22, 2022, serves as a stark reminder that DAOs are not exempt from laws and regulations. The case demonstrated that DAOs must operate within the legal framework and comply with regulatory requirements to avoid legal repercussions. Failure to do so can not only harm the DAO’s operations and reputation but also expose contributors and token holders to legal implications. OOKI DAO vs CFTC The CFTC’s order against OOKI DAO highlights the fact that regulators can penetrate the legal status, declared or undeclared, of DAOs, holding responsible individuals liable. Also, token holders in DAOs lacking legal status may face serious personal liabilities. In light of these challenges, this article provides answers to questions like: Why do DAOs need legal wrappers? What are the best entities and countries for DAO incorporation? How to choose the most suitable legal wrapper for a DAO? By exploring DAO legal wrappers, understanding their importance, and employing seasoned legal counsel steps to adopt the best fit for any DAO, DAOs can bolster their compliance efforts, safeguard their operations, and build stronger relationships with regulators, ultimately paving the way for their broader adoption and long-term success. Content Overview Why do DAOs Need A Legal Wrapper? Types of Legal Wrappers Legal Wrappers in the United States Legal Wrappers in International Countries How to Choose a Suitable Legal Wrapper Why Do DAOs Need A Legal Wrapper? Generally, a legal wrapper is a legal entity or framework that encapsulates an organization and its operations, providing a defined interface between the organization and its legal and regulatory environment. They serve as a crucial tool to enable DAOs to operate in the real world while safeguarding their members from potential legal complications. By adopting legal wrappers, DAOs can effectively address the following key aspects of their operations: DAOs require corporate personhood, which is attained through a legal wrapper, in order to sign contracts and enter into agreements. Interacting with other parties: If a DAO is not incorporated, it may be treated as a general partnership, making all contributors liable in the event of a lawsuit or legal issue. Liability protection for contributors: To legitimately hire employees or contractors, a DAO needs a legal wrapper. Engaging in off-the-books arrangements would be considered tax evasion, which is not advisable. Hiring employees: DAOs must fulfill their tax obligations to ensure legal compliance. It is important to consider the tax implications associated with any financial transactions within a DAO. Tax compliance: Legal wrappers offer vital safeguards for DAOs and their digital assets, protecting them from potential attacks or disputes. Legal protection and compliance for digital assets: Types of Legal Wrappers DAOs have access to a range of legal wrappers, each offering distinct advantages and considerations in different jurisdictions. They are: Legal Wrappers in the United States Wyoming LLCs Wyoming implemented a groundbreaking legal framework, enabling the establishment of Decentralized Autonomous Organizations (DAOs) as Limited Liability Companies ( ) with enhanced legal protection. This significant development, as highlighted by , introduces a governance structure that is notably more permissive compared to traditional corporations. Also, any individual, regardless of affiliation with the DAO, can establish a DAO LLC in Wyoming by filing a certification of formation with the state’s secretary. LLCs Rodrigo Sierra and Chris Bummer Any organization looking to establish itself as a DAO LLC in Wyoming must provide articles of organization meeting specific criteria outlined in the . Wyoming Decentralized Autonomous Organization Supplement Attributes of Wyoming LLCs Wyoming legislature grants a default waiver of fiduciary duty among DAO LLC members, and the DAO unless explicitly stated otherwise in the articles of organization. A DAO LLC cannot be manager-managed. The articles of organization for a DAO LLC must explicitly incorporate the terms DAO, DAO LLC, or LAO (which stands for “Limited Autonomous Organization”) in the name. Unincorporated Non-Profit Associations (UNAs) The UNA entity structure is available across numerous states in the US for adoption, although the specific regulations may vary depending on whether the state has fully or partially adopted the Uniform Unincorporated Nonprofit Association Act (UUNAA). DAO A UNA can engage in for-profit activities and distribute funds in some states that have adopted the UUNAA as long as these actions contribute to furthering the organization’s nonprofit goals. However, it is crucial to recognize that such activities can impact the UNA’s eligibility for tax-exempt status under of the tax code. Section 501(c)(3) Attributes of UNAs UNAs are uncomplicated and time-efficient in formal requirements. Although the rules vary across states, UNAs are typically not required to make any state filing in order to form and can arise from an oral agreement between participants. In certain states, UNAs provide a separate legal identity and limited liability for their members. There’s less certainty with UNAs as their governing statutes vary across jurisdictions and are untested by courts. Tennessee Decentralized Organization LLC Tennessee introduced that allows to register as Limited Liability Companies (LLCs) within the state. This statute provides members of DAO LLCs with limited liability protections, akin to those extended to traditional LLCs, safeguarding their personal assets. To register as an LLC, a DAO must submit articles of organization that meet requirements similar to those mandated for DAOs intending to register in Wyoming. ion legislat DAOs There are notable differences between Tennessee and Wyoming regarding the laws governing DAO LLCs. Firstly, the Tennessee statute specifies that a quorum of 50% is necessary for a valid vote. Secondly, unlike Wyoming’s law, Tennessee requires organizations to choose between a “member-managed” and “smart contract-managed” structure. However, in practice, DAOs often incorporate elements of both approaches and are rarely exclusively “member-managed” or solely “smart-contract-managed.” Utah Limited Liability DAOs (LLDs) (Utah DAO Act) The Utah State Legislation passed the Utah DAO Act, granting DAOs legal recognition and limited liability protections. This legislation, resulting from collaboration between the Digital Innovation Taskforce and the Utah Blockchain Legislature, establishes ownership guidelines, protects DAO-compliant anonymity through bylaws, and introduces quality assurance DAO protocols. This new law provides legal recognition and limited liability to DAOs, legally framing them as “Utah LLDs.“. It emphasizes ownership guidelines, and anonymity protection, and introduces quality assurance protocols. Attributes of Utah LLDs Utah LLDs may offer liability protection to its members, shielding them from personal liability for the entity’s debts and obligations. It defines ownership of DAOs and protects DAO-compliant anonymity through bylaw. The legislation established a nuanced tax arrangement as mentioned in Section 48–5–406 of the . Bill Vermont Blockchain-based Limited Liability Company (BBLLC) In 2018, Vermont introduced an that can be utilized by organizations using blockchain technology for a significant part of their operations, including DAOs, although the term “DAO’’ is not explicitly mentioned. To register as a Blockchain-Based Limited Liability Company (BBLLC), an organization must include relevant details in its operating agreement, such as its purpose, voting requirements, the intended use of blockchain technology, and the rights of members. LLC legislation By providing a framework that allows for the incorporation of blockchain-based activities, the state encourages innovation and creates a supportive environment for DAOs to operate effectively. Furthermore, the legislation permits participants in a DAO to assume various roles, such as managers and developers, as long as they adhere to the fiduciary duties outlined in Vermont’s LLC laws. Colorado Limited Cooperative Association (LCA) An LCA (Limited Cooperative Association) is a unique entity that combines aspects of both cooperatives and corporations. It offers a flexible capital model and governance structure. Within an LCA, members can assume the roles of investors or patrons, with each having the right to vote and a share of the revenues. The voting system can be based on the “one member, one vote” principle or on patronage or equity considerations. To establish an LCA, at least two organizers, who must be patron members, are required to file articles of organization with the Secretary of State. The LCA’s separate legal personhood ensures limited liability for its members, providing a layer of protection. Catawba Digital Economic Zone The Catawba Digital Economic Zone (CDEZ) has enacted regulations enabling DAOs to register as either Limited Liability Companies (similar to Wyoming DAO LLC law) or unincorporated nonprofit associations. The regulations, akin to those in other states, mandate the issuance of a certificate of organization by DAOs, which includes stating their DAO status, disclosing member rights distinctions from traditional LLCs, and providing information on voting rights, member duties, and amendment procedures. Also, organizations may offer an operating agreement as a supplement to the smart contract, governing principles, and certificate of organization. Legal Wrappers in International Countries These legal wrappers are internationally recognized structures that have been and are being adopted in other jurisdictions outside the US. They include: Coalition of Automated Legal Applications (COALA) COALA has developed a DAO Model Law with the aim of reducing legal uncertainty and fostering the growth of DAOs. A major advantage of the Law is that it will provide uniformity, a model set of rules that could be implemented internationally, and legal certainty to DAOs and their members worldwide. This Law, having 6 chapters addresses the kinds of activities DAOs can engage in, the requirements DAOs need to comply with in order to restrict the liability of its members, and the circumstances (fraud or failure to comply with regulations) that could lead to personal liability for members in chapters 1 to 4. Chapter 5 addresses the unique features of DAOs and their legal implications. For example, what will happen in cases of a hard fork? Chapter 6 looks at the tax regime the Model Law seeks to implement. Marshall Islands (Non-Profits & LLCs) In a significant development, the Republic of Marshall Islands, an independent island state located in the Pacific Ocean officially enacted the Decentralized Autonomous Organizations Act by the end of 2022. This pioneering legislation enables DAOs to establish themselves as Limited Liability Companies (LLCs), provided they self-identify as a DAO LLC. In the Act, both for-profit and nonprofit DAOs are permitted, as well as definitions and regulations for DAO formation, agreements, and smart contracts. Also, it explicitly recognizes DAO voting and tokenization as integral processes within the framework of the Act, further solidifying their legitimacy and importance. The Cayman Foundation Company in the Cayman Islands The Cayman Foundation Company of the Cayman Islands is an appealing choice for DAOs due to its flexible governance structure, and ability to function as both a trust and a corporation. Similar to a corporation, a legal wrapper allows the Foundation to operate as a distinct legal entity with limited liability for its members. As well as providing definitions and regulations for the formation, agreements, and use of smart contracts, the Act accommodates both for-profit and nonprofit DAOs.ecisions in DAO must be made by the community. Ownerless Foundations in the Bahamas, Panama, & Gibraltar States like the Bahamas, Panama, and Gibraltar are international jurisdictions that provide DAOs with the option to establish . These foundations operate under the guidance of a board of trustees or governors who hold a fiduciary obligation towards the foundation itself, rather than shareholders or DAO members. ownerless foundations are appealing because of their structural adaptability and the associated limited liability. Nonetheless, setting this type of foundation can be both costly and complicated. Ownerless Foundations Swiss Foundations in Switzerland Switzerland has not yet introduced specific legislation tailored for DAOs, but it remains a popular choice for DAOs to establish themselves as Swiss Foundations. When setting up a foundation in Switzerland, it is essential for the organization to clearly define its purpose, governing bodies, and administrative procedures in its charter. These factors will determine the regulatory authority overseeing the foundation. Swiss foundations possess their own legal identity, thus providing a limitation on personal liability. They also enable DAO members to exercise the rights granted to them through smart contracts and the organization’s charter. For instance, members of a DAO may have the right to participate in voting processes, with their decisions being implemented by a governing body established by the DAO foundation. Private Trust Company In Liechtenstein Liechtenstein has emerged as a favorable destination for blockchain projects. The country enacted the Token and Trusted Technology Service Provider Act for transparency in the registration requirements and liabilities for token providers. This legislation also provides clear definitions for various types of tokens and the associated rights they confer. Although there is no specific legislation governing entity formation for DAOs, a DAO can choose to establish itself as a Private Trust Company (PTC). The PTC structure offers flexibility, allowing organizations to adopt either a corporation-like or a foundation-like model. It’s noteworthy that a PTC can assume control over assets without incurring fiduciary duties, thus limiting member liability strictly to the assets held by the PTC. How To Choose a Suitable Legal Wrapper To choose a suitable legal wrapper, DAOs must carefully consider their structure, activities, and the advantages and disadvantages of establishing any of the above formal legal frameworks. This decision holds significant importance and should be guided by a clear and structured process informed and guided by experienced legal counsel. When choosing a legal wrapper, the following factors should be carefully considered: : Aligning the legal strategy with the DAO’s overarching goals is crucial for long-term success. The chosen legal wrapper should support and enable the DAO to fulfill its mission effectively. DAO’s mission and vision : Considering the variety of legal wrappers available, DAOs should evaluate and choose the type that best suits their purpose, community, composition, and other relevant characteristics. Both traditional and bespoke wrappers should be considered in this evaluation. Best suitable wrapper type Thoroughly drafting legal documents that clearly define the rights, responsibilities, and governance structure of the DAO is vital. This should be done with the aid of an experienced legal counsel to ensure accuracy and compliance. Drafting legal documents: : Compliance with relevant registration requirements is necessary to establish the legal wrapper entity. DAOs should carefully navigate the registration process in accordance with the laws and regulations of their specific jurisdiction. Registering the wrapper entity : Seamlessly integrating the legal wrapper with the DAO’s smart contracts is crucial for maintaining operational efficiency and compliance. Integrating the wrapper with smart contracts : The legal wrapper’s ongoing compliance with applicable laws and regulations is paramount. DAOs must stay abreast of legal developments and adapt their compliance efforts accordingly. Maintaining compliance It is worth noting that while legal structures offer operational advantages and legal protections, they also come with associated costs. Therefore, DAOs should carefully evaluate the benefits and drawbacks of each legal wrapper option in relation to their unique circumstances. By following a well-informed and diligent approach, DAOs can navigate the regulatory maze, establish appropriate legal frameworks, and empower themselves with compliance and legal protection in an ever-evolving regulatory environment. Also published here. The lead image for this article was generated by HackerNoon's AI Image Generator via the prompt "legal documents".

DAOs and Compliance: The Importance of Legal Wrappers

DAOs এবং কমপ্লায়েন্স: আইনি মোড়কের গুরুত্ব

DAOs und Compliance: Die Bedeutung von Legal Wrappern

DAO y cumplimiento: la importancia de los envoltorios legales

DAO et conformité : l'importance des enveloppes légales

डीएओ और अनुपालन: कानूनी रैपर्स का महत्व

DAO とコンプライアンス: 法的ラッパーの重要性

DAO 및 규정 준수: 법적 래퍼의 중요성

DAOs e conformidade: a importância dos invólucros legais

DAO'lar ve Uyumluluk: Yasal Paketleyicilerin Önemi

DAO và tuân thủ: Tầm quan trọng của giấy gói pháp lý

DAO 和合规性：法律包装的重要性

The project aims to create the first decentralized pawning and renting ecosystem via a pair of DApps known as SmartRent and SmartPawn. BizShake This 5-part series will go over what makes BizShake stand out within the wave of STOs entering the cryptosphere. And in case you haven’t read them, here’s where you can find the other articles all about BizShake: Part 1: The Honor of Becoming an NEP-5 Token Part 2: Team & Website Part 3: Tokenomics Can BizShake capture some of the new Security Token business coming into the world of crypto? Let’s find out… but first, I’d like to ensure we’re on the same page… *Disclaimer : This is not investment or financial advice. I’m not a financial expert by any stretch of the imagination. Most information within this article is speculative and merely my own personal opinion. Always conduct your own research before contributing to any startup projects. Always remember that what you do with your funds is your decision to make. And if that decision proves too difficult for you alone, seek guidance from a financial professional. I may or may not receive a small allocation of tokens for creating this content. That said, I will do my best to remain unbiased and fair. I try to avoid all FOMO and FUD and never wish to impart those emotions on my fellow crypto-heads. FYI : Certain countries are excluded from participating in BizShake’s upcoming STO. Don’t forget to check the (exciting!) terms and conditions page. No need to fret if your country is blacklisted; you’ll merely need to wait until BZS tokens are available on exchanges. Extending the Team Partnering with key players in your industry is how good businesses transform into great businesses. And BizShake has already begun the process of securing them, which is encouraging since their STO is still several months away. The team has selected a handful of partners — including BountyOx and Diacron — and more are bound to emerge. We won’t cover every partnership here but three notable projects are most definitely worthy of an explanation… Keeping it in the NEP-5 family One ID to Rule Them All The true identity of the users is a pillar of BizShake’s ecosystem. If users can’t trust who they’re dealing with, the network will stall out. User assets are another critical component. BizShake needs big volume to thrive and grow. And, a reputation for mediating counterfeit merchandise won’t go over well. BizShake selected Ontology to address both of these important issues. Within the Ontology project’s ONTO app, users can create what’s known as an ONT ID. An ONT ID is a personal, blockchain-based identification mechanism. Put simply, it’s a means to centralize your identity and assets on the BizShake platform. Now, this partnership serves a number of purposes: BizShake users’ ONT IDs will be tied to everything they do within the platform. Whether buying or selling, lending or borrowing, every interaction and every asset you make available on the BizShake network is associated with an ONT ID. For assets, this has two main benefits: Clarification as to you own, and proof that you actually own it. what And on the money side of things, the network makes it easy to perform transactions. You see, Ontology’s ONTO app is also a wallet which currently stores ONT — the Ontology network’s native token. And just like NEO/GAS, if you stash ONT in your ONTO wallet, you’ll be rewarded with the network’s fuel: ONG. The main benefit here is the simplification of using BizShake DApps. There’s no need to bother with creating separate accounts. Because honestly, who needs another password in their life? Nobody, that’s who. ONT IDs adhere to international W3C standards. The orld ide eb onsortium takes the concept of ‘Digital Identity’ very seriously. The W3C is an international community working to establish standards for Internet activities. W W W C At least for now, their standards are the benchmark for acceptable practices. Team Ontology made sure their data-collection processes conform to W3C specs. And by upholding these standards, BizShake DApps have an inherent level of trust. If you’re in the know — you are now! — and appreciate what the W3C is all about, you’ll feel very safe interacting on the network. As you can see, BizShake’s decision to partner with one of the NEO blockchain’s most popular NEP-5 tokens was a wise move. Putting IoT on the blockchain Smart Tracking BizShake’s SmartCertify program is intended for assets on the higher end of the value spectrum. Any BizShake user — for a fee — can have an asset professionally evaluated and certified by a third-party. Assets entering the SmartCertify program will be recorded on the blockchain and tied to the aforementioned ONT ID. During an evaluation, the asset’s assessor will apply a tracking device. Now, these IoT devices and their associated software are made by Dotando. When BizShake users share an asset, they’ll both scan Dotando’s tracking device, using Dotando’s app to do so. Scanned tags reveal the asset’s relevant info and history on the BizShake platform. This guarantee of transparency sets everyone’s mind at ease when exchanging assets. Automating KYC and ICO compliance Getting to Know All the Customers In order to mitigate risk for platform contributors, BizShake is aiming for US SEC REG A+ status. Plenty of new crypto startups don’t bother with the US at all, but in some cases, the accredited whales are allowed in the pool. BizShake is taking a more self-disciplined approach. Realizing the US is a giant market not to be ignored, their A+ application will give the general public the right to participate. Legal requirements are a minefield beset with red tape. Starting the process as early as possible was in BizShake’s best interest. And to help expedite the process, BizShake employed the services of IdentityMindGlobal. KYC and AML are inevitable for any STO. I think the approach of letting an expert handle those details was a good choice. Some things are better left to others and I appreciate projects that pony up some capital to tackle tasks they know someone else can do better. Final thoughts… The BizShake project’s growing number of partnerships are nicely shaping the functionality of the ecosystem. The team has selected companies that perfectly align with what they’re trying to accomplish. By addressing the elements of legalities, regulations, and platform functionality, BizShake is setting themselves up for a positive outcome. Concrete, pre-meditated plans are a welcome sight in the crypto startup space. Not naming any names but a few build an app or DAapp then reach out to the community for ideas on what to do with it. In contrast, BizShake knows exactly what they want to do and the team is taking proactive steps to get the job done. While these initial partnerships are great, I feel there’s more on the horizon. Should the project choose to dabble in AI for improving the platform, they’ve got a few NEP-5 candidates to choose from. Even if the team feels their partner-gathering is complete, I remain excited about what BizShake wants to accomplish. Primarily because it’s one of the few blockchain projects I would actually use. I don’t want to trade the BZS tokens I plan to deposit in my wallet. No, I’d rather make them flow within the BizShake network. Visit the to discover more about the project and upcoming STO. BizShake Website And for your convenience, here are more BizShake project resources: Facebook LinkedIn Medium Reddit Telegram Twitter Whitepaper YouTube By the way… If you like what you see here and need help getting your crypto message to the masses, I’d love to hear about your project. Feel free to reach out to me here: blockchainauthor at Gmail

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