PoS Capital - Venture Capital approach for the Catalyst Fund, to nurturing Growth in the Cardano Ecosystem in an ongoing manner - Innovation is not happening once a year!

[GENERAL] Name and surname of main applicant

Joao Freitas

[GENERAL] Email address of main applicant

luminaryledger@gmail.com

Additional applicants

Florian Pittini, Guy De Nicolay, Ann-Kristin Mackensen

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

9

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language.

No

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

No

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.” .

No dependencies

[GENERAL] Will your project’s output/s be fully open source?

No

[GENERAL] If NO, please describe which outputs are not going to be open source. If YES, please write “Project will be fully open source.”

As an evergreen fund we won't generate any IP which can be used externally, we are a process focused business. Everything related to the voting and fund distribution will be on the blockchain and publicly visible as well as announced in advance.

[METADATA] Category of Proposal

Incubation

[IMPACT] Please describe your proposed solution.

Our solution is to create an Evergreen Fund or transform the Catalyst Fund into an Evergreen Fund which is combining the best of both worlds. (This proof of concept shall show the benefits of a professional managed vehicle with community investment decisions.)This involves creating an evergreen cycle of reinvestment, where returns from funded startups are reinvested back into the Fund, allowing it to support future generations of projects and startups within the Cardano ecosystem.

Evergreen Fund:

An Evergreen Fund is a type of fund that has an indefinite lifespan. Unlike traditional funds that typically have a 10- to 12-year lifespan with predefined investment and divestment phases, Evergreen Funds continually reinvest returns into new investments to build up momentum of previous success.

Categories:

1. Products/Startups: The aim of this category is to create a self-sustaining fund that can support an increasing number of startups over time. To achieve this, we plan to adopt a model similar to early-stage investment firms, such as Y Combinator. We will provide funding for promising projects or startups in the Cardano ecosystem. In exchange, these companies will offer a certain percentage of their equity or tokens. This model ensures a share of any future profits these companies make, which then gets reinvested back into the Catalyst Fund. This creates a perpetual cycle of investment, growth, and reinvestment, thereby making the fund 'evergreen'. We believe this approach is not only fair to the community who backs these startups through the fund but also ensures the sustainability of the fund itself.
2. Open Source: Open-source projects are the backbone of the blockchain and crypto industry. They are critical to fostering innovation, collaboration, and shared learning. However, such projects often struggle to find funding, as they generally don't offer a direct return on investment. Recognizing this challenge, our proposal allocates a portion of the Catalyst Fund to support open-source initiatives within the Cardano ecosystem. Although these investments won't bring financial returns, they will bring substantial communal benefits by accelerating the development of open-source code, tools, and infrastructure that the community can leverage. This will further promote a collaborative and growth-centric culture within the Cardano community.

Selection Process:

Our funding model's strategic approach incorporates two layers of project selection, with a high-caliber, in-house expert team forming the first layer and a community making up the last layer.

Our in-house team comprises experienced professionals with backgrounds in blockchain technology, entrepreneurship, finance, and project management. These individuals have been carefully chosen based on their skill set, understanding of the Cardano ecosystem, and vision for its potential growth. As the first layer, they will be responsible for initial screening and vetting of all project proposals. Their experience and expertise will ensure that only proposals showing a high degree of feasibility, innovation, and potential value-addition to the Cardano ecosystem will move forward in the selection process.

The second, or last layer, consists of the Cardano community. By having community as the final decision maker we ensure that the voice and collective wisdom are harnessed in the process of forming the investment decision. 

This dual-layered approach ensures a thorough vetting process, combining professional insight with community sentiments. Ultimately, it promotes fairness, active participation, and trust within the Cardano community, enhancing the overall sustainability of the Cardano ecosystem.

Submission and Voting Process:

Innovation funding requests will be submitted via a secure, encrypted web-based form designed with a user-friendly interface. The eligibility criteria for submission will be rigorous but inclusive, supporting all aspects of the Cardano ecosystem. Criteria will include, but not be limited to, the potential of the proposal to contribute to the Cardano ecosystem, the track record of the proposer(s), the feasibility of the project plan, and the need for funding.

Upon submission, each proposal will undergo a review phase from an expert team before being published to the community. This ensures that only well-crafted and relevant proposals make it to the voting phase.

For community voting, we will use a bespoke blockchain-based platform, ensuring that the process is completely transparent and secure. Votes will be mapped against each member's ADA holdings to maintain a fair process. To prevent fraud, we will employ a multi-signature wallet system, ensuring that multiple authentications are required for significant actions.

Accountability and Oversight:

To ensure funds are used appropriately, each funded project will be required to deliver periodic progress reports. These reports should detail the use of funds, any milestones reached, challenges encountered, and plans for the next phase. Our team will audit these reports, verifying the declared use of funds against the actual progress made.

Should discrepancies occur, our team will engage with the project leaders to address the issues. Severe or repetitive misuse of funds may lead to termination of funding (after a community vote), ensuring a responsible use of community resources.

Communication:

Transparent and regular communication is crucial. We will disseminate information about funded projects, proposal status, and general updates through various channels. These include community forums, regular newsletters, and social media platforms (Twitter, Reddit, Facebook).

To foster engagement, we will host periodic webinars for deeper dives into select topics, and AMAs (Ask Me Anything) to address any questions or concerns from the community. Special attention will be given to major milestones achieved by funded projects, spreading the word about successful initiatives within the Cardano ecosystem.

In summary, our proposed solution creates a delicate balance between profit-oriented investment (to re-invest into the other projects) and community benefit. By doing so, we aim to foster an environment that not only encourages sustainable growth and innovation within the Cardano ecosystem but also ensures that all ADA holders share in the rewards of this growth.

This will also be the base of creating a Cardano community based growth Fund, to overcome the shortcomings of attracting external venture capitalists to the Cardano ecosystem.

[IMPACT] How does your proposed solution address the challenge and what benefits will this bring to the Cardano ecosystem?

The new system approach is balancing private and open-source initiatives: In the blockchain world, both private (or proprietary) projects and open-source projects play significant roles. While open-source projects often form the backbone of the ecosystem, enabling shared learning, collaboration, and innovation, private projects can bring in unique, specialized solutions that cater to specific needs or sectors.

Private startups, unlike open-source projects, typically work with proprietary code and unique business models to create distinct products and services. They have the potential to bring about innovative applications of blockchain technology, fuel growth, and increase adoption of the Cardano ecosystem. However, as they operate on a for-profit basis and their products and services are often exclusive to their clients, they can limit the full potential of the chain if their development is funded without any returns to the ecosystem.

This is where our conventional funding approach comes into play. When investing in private startups, the Catalyst Fund will operate much like a traditional pre-seed fund, requiring an investment agreement and a share of equity or tokens. This not only ensures that the Fund receives a fair return on its investment, supporting its long-term sustainability, but also means that the community at large stands to benefit from the success of these startups, rather than their benefits being limited to only the potential ADA demand increase. Plus it might be possible to create an evergreen fund which can support more and longer start-ups and open-source projects.

By applying this balanced approach, our model fosters innovation and growth in both private and open-source projects, ensuring the overall development and expansion of the Cardano ecosystem in an ongoing manner. This way, we not only support diversity in the types of projects being developed but also ensure fairness in distributing the benefits derived from the success of these projects.

[IMPACT] How do you intend to measure the success of your project?

The success of our project can be evaluated through a combination of quantitative and qualitative measures that focus on the sustainability of the Catalyst Fund, community engagement, and the overall growth and development of the Cardano ecosystem.

1. Return on Investment: A key measure of success would be the return on investment from the equity or tokens acquired through funding startup

2. Number of Projects Funded: The total number of startups and open-source projects funded over time will provide a quantitative measure of the project's success. A higher number would indicate more opportunities created within the Cardano ecosystem due to our funding model.

3. Successful Launch and Adoption of Projects: Monitoring the successful launch and adoption of funded projects will be another crucial measure. This would be reflected in the number of users or transactions, or any other relevant adoption metrics for each project.

[IMPACT] Please describe your plans to share the outputs and results of your project?

Sharing the outputs and results of our project is vital to maintain transparency, foster community trust, and demonstrate the value our model brings to the Cardano ecosystem. Here's how we plan to do it:

1. Regular Updates: We'll provide regular updates on the progress of funded projects, including key milestones achieved, obstacles encountered and overcome, and their overall growth trajector

2. Annual Reports: An annual report detailing the overall performance of the Catalyst Fund, including return on investment, the number of projects funded, and their impact on the Cardano ecosystem will be shared. The report will provide in-depth analysis and insights into the achievements and learnings of the year.

3. Success Stories: We'll share success stories of startups and projects we've funded. This not only celebrates their achievements but also inspires other innovators in the ecosystem.

[CAPABILITY/ FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability?

We have strong capabilities to deliver our project with high levels of trust and accountability. Here's how we ensure trust and accountability throughout our project:

1. Transparent Governance Framework: We have established a transparent governance framework that outlines the roles, responsibilities, and decision-making processes within our project. This ensures clarity and accountability in how decisions are made and executed.
2. Ethical Standards and Code of Conduct: We adhere to strict ethical standards and a code of conduct that governs our actions and interactions. This ensures that our team members operate with integrity, honesty, and professionalism throughout the project.
3. Robust Project Management & Investment Experience: Our project is guided by sound project management principles and methodologies. This includes effective planning, monitoring, and control mechanisms to ensure that tasks are executed efficiently and that resources are allocated appropriately. Additionally the whole team has profound knowledge about pre-seed, seed as well as growth investments, which is a unique composition to deliver high returns which will be reinvested into the ecosystem.
4. Expertise and Experience: Our team consists of highly qualified professionals with expertise in project management, blockchain technology, community engagement, fund management, and accelerator program management. Their experience and knowledge enable them to make informed decisions and navigate challenges effectively, fostering trust and accountability.
5. Transparency and Communication: We maintain regular and transparent communication channels with the community and stakeholders. We provide updates on project progress, milestones, and challenges, ensuring that everyone is well-informed and engaged in the process. We actively seek feedback and address concerns promptly.

[CAPABILITY/ FEASIBILITY] What are the main goals for the project and how will you validate if your approach is feasible?

The main goals for our project are:

1. Long-Term Sustainability of the Evergreen Fund and/or Catalyst Fund: We aim to establish a funding model that ensures the long-term sustainability of the Evergreen Fund and/or Catalyst Fund. This involves creating an evergreen cycle of reinvestment, where returns from funded startups are reinvested back into the Fund, allowing it to support future generations of projects and startups within the Cardano ecosystem.
2. Balance between Private Startups and Open-Source Projects: We seek to strike a balance between funding private startups and supporting open-source projects. This balance ensures that both profit-oriented ventures and communal open-source initiatives receive support, fostering a diverse and vibrant ecosystem.
3. Community Engagement and Empowerment: We aim to actively engage and empower the Cardano community in the decision-making process. This involves the election of community experts, community voting for project selection, and open channels of communication to gather feedback and suggestions. By involving the community, we foster a sense of ownership, collaboration, and collective decision-making within the Cardano ecosystem.

To validate the feasibility of our approach, we will undertake several measures:

1. Pilot Phase and Proof of Concept: We will run an early proof of concept to validate the effectiveness and feasibility of our funding model. This pilot phase will involve selecting a limited number of projects and startups for funding, monitoring their progress, and assessing the outcomes. This will provide valuable insights into the viability and potential challenges of implementing our approach.
2. Data Analysis and Evaluation: We will collect and analyze data on the performance of funded projects, including their financial returns, market adoption, and impact on the Cardano ecosystem. This evaluation will help us gauge the success of our approach and identify areas for improvement.
3. Community Feedback and Surveys: Gathering feedback from the Cardano community through surveys, community forums, and direct engagement will provide valuable insights into their perception of the funding model, its effectiveness, and any areas that require adjustments. Community feedback will be crucial in validating the feasibility of our approach.
4. Partnership and Collaboration: Collaborating with key stakeholders in the Cardano ecosystem, such as developers, industry experts, and existing projects, will provide opportunities for feedback, collaboration, and validation of our approach. Partnerships can also contribute to the successful implementation and scalability of our funding model.

By combining these validation measures, we will be able to assess the feasibility of our approach, make necessary adjustments, and ensure that our project aligns with the goals and needs of the Cardano ecosystem.

[CAPABILITY/ FEASIBILITY] Please provide a detailed breakdown of your project’s milestones and each of the main tasks or activities to reach the milestone plus the expected timeline for the delivery.

Milestone 1: Structure Setup and Team Assembling

• Task 1: Establish the project team, including experts in project management, blockchain technology, community engagement, fund management, and accelerator program management.
• Task 2: Define the roles and responsibilities of each team member and establish clear communication channels.
• Task 3: Develop the governance framework, including decision-making processes, transparency measures, and ethical standards.
• Task 4: Set up the necessary infrastructure and tools for project management and collaboration.
• Task 5: Conduct initial team training and orientation sessions to align everyone on the project goals and processes.

Milestone 2: Pilot Phase and Proof of Concept

• Task 1: Launch the pilot phase and open the project submission process to the Cardano community.
• Task 2: Review project proposals based on the defined criteria and select a limited number of projects for funding.
• Task 3: Provide funding and support to the selected projects, closely monitoring their progress and performance.
• Task 4: Collect data on the financial returns, market adoption, and impact of the funded projects.
• Task 5: Evaluate the effectiveness and feasibility of the funding model and make necessary adjustments based on the pilot phase outcomes.

Milestone 3: Refinement and Expansion

• Task 1: Analyze feedback from the community, stakeholders, and project participants to refine the funding model and processes.
• Task 2: Enhance the governance framework and decision-making processes based on lessons learned from the pilot phase.
• Task 3: Scale up the funding capacity to support a larger number of projects and increase the impact within the Cardano ecosystem.
• Task 4: Foster collaborations and partnerships with key stakeholders, such as developers, industry experts, and existing projects.
• Task 5: Continuously monitor and evaluate the sustainability and impact of the Fund, making necessary refinements to ensure long-term success.

[CAPABILITY/ FEASIBILITY] Please describe the deliverables, outputs and intended outcomes of each milestone.

Milestone 1: Structure Setup and Team Assembling

• Deliverables: Established project team, defined roles and responsibilities, governance framework, communication channels, and initial team training and orientation.
• Outputs: A well-structured and cohesive project team & investment team, clear understanding of team roles and responsibilities, established governance framework, and effective communication channels and a investment thesis.
• Intended Outcomes: A strong foundation for project management, clear accountability and decision-making processes, and a team that is aligned and prepared to move forward with the project.

Milestone 2: Pilot Phase and Proof of Concept

• Deliverables: Launched pilot phase, selected funded projects, ongoing monitoring of project progress and performance, and data collection on financial returns, market adoption, and impact.
• Outputs: Active pilot phase with funded projects, regular monitoring and evaluation reports, and collected data on project outcomes.
• Intended Outcomes: Validation of the funding model, insights into project success factors, identification of areas for improvement, and initial evidence of the impact and viability of the Fund.

Milestone 3: Refinement and Expansion

• Deliverables: Revised funding model and processes based on feedback, enhanced governance framework, scaled-up funding capacity, and established collaborations and partnerships.
• Outputs: Improved funding model, updated governance framework, expanded funding capabilities, and strategic collaborations with key stakeholders.
• Intended Outcomes: A refined and effective funding model, increased efficiency and scalability of the Fund, strengthened partnerships within the Cardano ecosystem, and continued growth and positive impact on projects and startups.

These deliverables, outputs, and intended outcomes are designed to ensure a systematic and progressive approach to the project, ultimately leading to the establishment of a sustainable and impactful funding mechanism that benefits the Cardano ecosystem.

[RESOURCES & VALUE FOR MONEY] Please provide a detailed budget breakdown of the proposed work and resources.

To ensure the success we calculated with an ADA price of 0.16 Cent because we have to support the Cardano ecosystem also during the tough times. Please not that all the calculations also include the project management, reporting effort and operational overhead for this project.  

[RESOURCES & VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

1. Long-Term Sustainability: By investing in the project, the Cardano ecosystem ensures long-term sustainability by testing a new funding structure. Which might be the blueprint for sustainable changes in the Catalyst Fund setup.
2. Community-Driven Innovation: The project's focus on community engagement and empowerment ensures that the funds are allocated based on the collective wisdom of the Cardano community. This inclusive approach maximizes the chances of supporting projects that align with the community's values and goals, generating value and fostering innovation within the ecosystem.
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This will also be the base for creating a Cardano community based growth Fund, to overcome the shortcomings of attracting external venture capitalists to the Cardano ecosystem by creating a stakepool funded Venture Fund for the Cardano ecosystem besides the new Catalyst Fund approach and attracting Fund of Funds to the newly Venture Fund to invest in the Cardano ecosystem. 

[IMPORTANT NOTE] The Applicant agreed to Fund10 rules and also that data in the Submission Form and other data provided by the project team during the course of the project will be publicly available.

I Accept