The Collective mode of Venture DAO referred to as Collective DAO, was originally designed concerning investment clubs in the US and UK. That is, many people put money in a pool, and all members have the power of investment decision-making and governance. No one is an investment adviser to others, and there is no entrusting relationship.

The Collective DAO is a Venture DAO operating between the Vintage and Flex modes. It invests collectively with a pool of capital but gives each investor a vote, balancing collective decision-making and individual choice.

In Collective DAOs, all DAO members are collectively called "Members". Everyone has the same rights and obligations, and all members are both Governors and Investors (except the Summoner, who may not be an investor). All Members have the right to participate in the governance of the DAO and make investment decisions.

DAO members' management and investments will be completed by submitting proposals and voting on them. Every member of the DAO has the right to vote. Since there is no trustee and each person is responsible for their own decisions, the Collective DAO has no Governor Fee or Carry settings. However, all members will share expenses incurred during the DAO operation and investment process through the Expense proposal. For providers of investment project sources (Scouts), the DAO can give rewards such as a percentage of investment amounts or payback tokens by setting Scout Fee & Carry.

Although it is a blind pool like the fund in Vintage DAO, Collective DAO does not have a fixed fund cycle. When a Collective DAO is successfully deployed, there will be fund changes from fundraising, investment, and redemption activities, as well as changes in membership. However, Collective DAO does not set fixed periods for these activities in advance but can flexibly adjust funds and personnel through proposals at any time.

Although each DAO member has the right to vote, individuals are ultimately subject to the group's decision (voting). To give each member more options, the Collective DAO has a Grace Period before executing the investment proposal. During this period, members who are not satisfied with the collective decision can redeem their money from the pool.

The investors and their investment shares are locked at the time of proposal submission. Investment proposals can only be submitted if the DAO has enough funds to cover the investment, as restricted by the smart contract.

Fundraising

Collective DAO's fund operation has no fixed period. When the DAO is deployed, it can start fundraising at any time or initiate Member-In or Top-Up proposals to deposit funds into the DAO. If there is no liquidation, the fund can continue indefinitely. Three proposals can be adopted to raise new funds and add new members during the operation.

• Fundraising: This activity targets multiple investors with a specific threshold. It allows eligible people to deposit funds during the fundraising period. The fundraising object can be existing members of the DAO or potential new members. Investor eligibility can be limited by settings. You can also set minimum and maximum funding goals, as well as the minimum and maximum deposit amounts for each depositor.
• Member-in: A separate entry channel for a Member nominee. It allows an existing member of the DAO to nominate a potential new member to join, and the nominee deposits an agreed amount to the DAO. The nominee approves the funds before the proposal voting begins, and when the voting of the proposal passes, the nominee's funds are deposited into the DAO, and the nominee joins the DAO at the same time.
• Top-up: A fundraising channel for a single additional investment by an existing member. It allows existing members to apply for more funding on their own. The member who applies for a top-up will approve the deposit amount in a voting process. Once the proposal is passed, the top-up fund will automatically go to the DAO, and the member’s governance rights (voting power) and investment share will increase.

Investment

The investment flow in the Collective DAO is basically same with Vintage DAO. After any Member submits an investment proposal as Scout, all members of the DAO have the right to vote. After the vote is approved, the investment is executed.

The only difference in Collective DAOs is that there is a Grace Period after the voting period ends for the investment proposal. During this time, any unsatisfied member can redeem some or all of their funds to protect their interests.

Redemption

Redemption refers to the act of successfully depositing funds into a DAO pool and then withdrawing them. There are different types of redemption in collective DAOs, which may be subject to a redemption fee depending on the DAO's setup.

Since the Collective mode of Venture DAO is jointly operated and managed by all DAO members, the beneficiaries of redemption fees are all members who remain after the redemption occurs. If a DAO sets a redemption fee, when a member redeems, the fee is deducted from the redeemer's redemption amount and distributed to the remaining members in proportion to their deposits in the DAO.

Liquidation

In Collective DAOs, there is a liquidation feature that allows the DAO fund pool to be cleared and restarted.

Summoning DAO needs to set up a currency (such as USDC) for the DAO. Once the currency is set up, the DAO will only support that currency for future fundraising and investment. If the DAO wants to switch to another currency (such as USDT) after some time, it would need to liquidate its existing funds through a Liquidation proposal and reset the new currency for future operations.

If the DAO wants to changes its investment theme and reopen a new fund, it can also end the current fund through Liquidation.

Core Differences From Vintage DAO

• There are two roles in Vintage DAO: Governor and Investor. Only the Governor has voting rights and collects management fees. In Collective DAO, all members are Governors, all members have voting rights, and there are no Governor Fees & Carry. If it is necessary to pay individual members or external advisors for their work or services, the Expense function can be used to achieve this.
• The operation of Vintage DAO is based on sequentially running funds, each with a defined lifecycle (fundraising, investing, redemption, refund). In contrast, Collective does not have a fixed fund lifecycle.
• Each fund in the Vintage DAO has a fixed term. However, the funds in the Collective DAO do not have a fixed term and will continue to exist unless a fund is liquidated to open a new fund.
• After DAO deployed, Vintage DAO is in a closed state, not allowing new investors and new funds to enter. However, Collective DAO can introduce new members and new funds through Fundraising, Governor-In, and Top-up.
• The redemption period for Vintage DAO is agreed upon at the time of fund initiation and is periodic, whereas the redemption mechanism for Collective is more flexible.

On this page

• Fundraising
• Investment
• Redemption
• Liquidation
• Core Differences From Vintage DAO