Democratizing Venture Capital: An Exclusive Interview with Hatu Sheikh CMO of DAO Maker

1. Hi Hatu! Thank you for your time. We’re keen on talking about the project but before that, we’d like to know more about you. Please tell us a little about yourself and how you got involved with DAO Maker. 

Hi! Thank you for inviting me. I am Hatu Sheik, the CMO and co-founder of DAO Maker. Well! About me, I have to say that I am a marketing and strategy geek. I love analyzing different opportunities and approaches for business growth and implementing them in the projects I work on. I have a Bachelor’s Degree in Mathematical Economics and Business - Finance Concentration and soon after graduation, I got involved in the startup space. 

I co-managed a $3 million county budget and facilitated $65 million in ICO funding before joining DAO Maker. I also worked closely with various blockchain-based projects and tokens to manage their marketing strategies. Having been involved in the startup space for several years, I’ve seen firsthand the struggles emerging businesses go through to raise funds and attract VC attention. This is when DAO Maker’s vision to democratize the VC market and get retail investors involved, caught my attention. So, I decided to co-found it and here we are.    

2. Retail accounts for less than 1% of the VC market and its success is dictated by institutional investors. So, why do you think retail investors need to enter the VC market, and why now?

Yes! You’re right. As of now, retail investors are not predominant in the VC market. This space is ruled by institutional investors and over the past couple of years, they’ve invested record-breaking amounts of money into startups. In 2021 alone, $621 billion were invested into startups. But, this is only one side of the picture. Beneath its surface, the VC market is killing more startups than it is creating.

Startup founders across the world have been sharing concerns about how venture capital funding is posing monumental pressure on them. Today, VCs are ready to pour billions of dollars into potential startups. The funding rounds that went on for months on end are finalized in only a few weeks now. And because of this, VCs are also expecting pay off for their investments very quickly. There is unreal pressure on startups to scale prematurely and grow their business at an abnormal pace. When this is not achieved, VCs have the annoying habit of buying out businesses. If this cycle continues, we could soon be left with a startup space that is only focused on growth instead of proper product development. 

This is exactly why we need to democratize this market by letting retail investors in. Retail investors can help the startup space return to its former glory by allowing businesses to scale at their own pace.  

3. But, when you come to think of it, VC funding is innately risky and the entry barriers are high. So, do you think retail investors would be keen on entering the market? And if they do, is there any way to reduce risks?

Of course, the risks associated with the VC market are significantly higher when compared to the personal finance market. This is the reason why retail investors refrain from this space for the most part. But, after observing retail investment patterns over the years, we at DAO Maker came to the conclusion that retail investors would be interested in the venture capital market if the risk associated with it was reduced. This was further confirmed by our Dynamic Equity/Coin Offering (DYCO) that quickly raised $3.5 million with retail investors. So, retail investors are interested in the VC market, they are only deterred by the risk. This is where blockchain technology can come into play. 

Blockchain technology creates the possibility for millions of investors across the globe to pool their resources to fund startups. In this sense, the risk is distributed among all participants and no single person takes the complete hit. On platforms like DAO Maker, startups are selected after careful vetting to eliminate a lot of initial risks. Moreover, the use of blockchain technology makes it possible to offer financial products that are inherently designed to be risk-free. We, for instance, have a product called Venture Bonds that comes with near-zero risk. 

4. As we understand it, DAO Maker envisions becoming the on-ramp for retail investors’ entry into the VC market? Can you tell us how this is achieved and walk us through all your offerings?

DAO Maker is a platform that is opening up the venture capital market to retail investors on the blockchain. We envision creating a single platform that caters to varying risk appetites of the masses and provides an easy way for them to profit from the VC market. And of course, to cater to varying risk appetites, we offer a variety of financial products for investors. 

Our financial products range from Venture Bonds that generate a steady 8-10% interest with zero risk to Standard Offerings for maximum returns with high associated risk. But of course, our tried and tested Dynamic Equity/Coin Offering (DYCO) takes the most balanced approach by capping risk and still allowing the scoper for maximum rewards. We also have the refundable Strong Holder Offering that is once again high risk and intended for seeding projects that have filed private rounds with VCs. 

Long story short, we’ve built a kind of an all-in-one platform for retail investors to easily enter the VC market and participate in it at their own risk appetites.  

5. Okay! We’ve heard the investor’s side of it. But what unique opportunities, if any, does DAO Maker bring for startups in this space?

Well! Apart from democratizing the VC market, we also envision fostering new-age startups. So yes, we do have a multitude of opportunities for startups to accelerate their growth. 

For starters, our flagship offering Social Mining is designed to help tokenized startups with community building, ecosystem creation, and online exposure. It allows projects to set up incentives for community members who offer value to the ecosystem and these incentives are decided by token holders. But apart from this, we also offer Yield Shield that makes participation in liquidity mining easy, safe, and inexpensive for miners. 

Then, there’s also the dTeams tool that helps startups build and manage teams in a decentralized fashion. The best part is the dTeams tool can also be used for equity startups and not just tokenized startups.

6. In the long run, what significant changes do you think DAO Maker can bring to the VC market?

I believe DAO Maker is the first step towards decentralizing the VC market. We’re creating the possibility for large-scale institutional investors and retail investors to co-exist and benefit from the growth of emerging startups. Retail investors in the VC market solve the concerns voiced by startup founders and give them the time and space to scale at their own pace. They increase cash flow and make the market more flexible so that startup founders can focus on building robust products and services for the future instead of being pressured for immediate returns. 

7. Lastly, is there any advice you’d give to retail investors still skeptical about the VC market?

Well! I firmly believe that the VC market is an opportunity that most retail investors have been missing out on. When you come to think of it, investing in a startup at its nascent stages is one of the best ways to grow your wealth, should the startup succeed. Through DAO Maker, we’re offering a way for retail investors to possibly invest in the Google or Facebook of web3. So, my advice for investors would be to grab onto this opportunity but of course after considering their own risk appetites.