Alumni of Y Combinator have a new vehicle for investing in cryptocurrency-related startups.
Co-led by Ben Huh, who previously worked at the startup accelerator, Orange DAO is a so-called decentralized autonomous organization that's open only to YC staff members or founders who previously participated in one of the accelerator's programs, TechCrunch reported. The organization is designed to allow the accelerator's alumni to collectively find and invest in early-stage digital currency and blockchain companies.
"Orange DAO exists to support past, present, and aspiring Y Combinator founders who are building the future of the crypto ecosystem," the group said in its charter. "We will distribute: wealth, knowledge, access to power, control over resources, and participation in governance, to a broader group of people than ever before in a more equitable way than any previous system."
A DAO is a new kind of business structure that sets up contracts through blockchain technology. DAO members own stakes in the entity and can vote on each decision it makes. The organizations are decentralized and generally aren't connected to a single physical location.
Formed in the fall, Orange DAO now has a membership of more than 1,000 YC alumni, according to TechCrunch. The organization aims to help startups get accepted into the accelerator's program, provide them with funding before and after their participation in YC and to help them grow and mature, according to its charter.
Despite Orange DAO's promotion of YC, it is not formally connected to the accelerator, a representative of the accelerator told the Business Journal.
In addition to helping head the new DAO, Huh is also running a separate but related venture entity dubbed the Orange Fund that actually invests in the startups discovered by the DAO, TechCrunch reported. The Orange Fund has already closed its first investment vehicle and has invested in around 30 startups, according to the report.
The fund and the DAO are "still separate but they work together," Huh told TechCrunch. "I think where we want to be headed is: Do as the smart contract says."
