FREQUENTLY ASKED QUESTIONS

1. What is METARISE?

As of May 2022, there are only about 30,000 monthly active developers in web3 - of the 30-odd million developers globally. Only 0.1% of developers work in web3, and this doesn’t account for other contributors such as strategists, marketers, designers, and so on.
The web3 talent shortage is a challenge for ecosystem builders, but also represents a significant opportunity, with web3 expected to grow at mid-double digit growth rates through to 2030. 

METARISE is a community-owned web3 education ecosystem, accelerator, and venture fund, focused on identifying, attracting, developing, and supporting the next generation of web3 talent and projects. 

Think of us as General Assembly meets Techstars, except with a tokenized business model where all contributors get to influence and share in the upside of what we’re collectively building. 

Since 2017, the team behind METARISE has run numerous startup accelerator and development programs, and from over 3,000 program applicants, the 90 startups we've selected to participate in our programs have delivered an undistributed 3X return in an average timeframe of 2.5 years from participation, reflecting a gross IRR of about 53%.

2. Why should I invest in the METARISE venture fund?

We offer what we think is a unique and innovative opportunity for investors to get initial or additional exposure to web3 - which has the potential for outsized returns relative to web2.

Investors will get:

  1. Passive financial exposure to a vetted and diversified pool of high-growth web3 startups, supported by web3 network ecosystem funds and our network of web2/web3 mentors and coaches)
  2. Financial exposure to our incubated startup pool, in addition to our investments (see #3)
  3. Percentage of income from our METARISE accelerator programs (including hackathons and education ecosystem)
  4. Percentage of income derived from staking our portfolio startup and incubated startup tokens
  5. The ability to influence the investment decision-making process
  6. Exposure to high-growth emerging markets
  7. Exposure to web3 projects that are aligned with the needs of web networks and protocols
  8. Access to our deal flow should you want to make additional direct investments into one or more of our portfolio startups 
  9. The possible option of liquidating your tokens on the secondary market, after the investment term expires (pursuant to Securities Act Rule 144(a)(3) Rule 144)
  10. Run by a professional and competent team with a track record in startup incubation and early-stage education

For more on how we think about web3 investing v web2, read this article.

3. Please explain how your startup pool profit share works.

Every startup that participates in our accelerator programs will be asked to pledge 2% of their own native tokens in exchange for education, mentorship, and access to networks.

We anticipate incubating between 150 and 200 startups over a five year period.
This upside will be redistributed back to token holders commensurate with their holding.

Limited partners who commit more than US$500,000 will also receive $MRISE tokens (0.1% of the token pool for every $100K invested).

How this works in practice:

If the total value of our incubated alumni is US$2billion ($10m per startup, 200 startups), then 2% or $40M would sit in our token pool. An LP who commits $1M to our fund will also receive 1% of our token pool, and will therefore receive $400K of the $40M upon distribution.

This de-risks investing into our fund as it provides for an additional form of exposure and upside, separate to our fund.

4. How can I invest?

If you are an individual accredited investor, venture fund, angel syndicate, or family office, and want to learn more and get notified when we go live, sign up to our whitelist or set up a conversation here.

5. Can I invest with fiat currency, ETH, stable-coins, or other cryptocurrencies?

Yes - we accept ETH, DAI, USDC, UST, USDT, USD, AUD, and GBP.

6. Are there any requirements to becoming an investor?

While there are at the moment no clear and universal rules governing capital-raising in crypto globally, we are erring on the side of caution. 

As such, individual investors need to be accredited in order to invest, and go through anti-money laundering ("AML"), Know Your Customer ("KYC"), and Office of Foreign Assets Control ("OFAC") checks as defined under U.S. law and as discussed further below. 

A Member will also need to submit sufficient information to verify the potential member's identity for AML, KYC, and OFAC checks, including:

  • uploading a passport or a state issued license;
  • providing a social security number or Tax ID; and
  • providing proof of the member's primary residence.

Accredited investors include:

  • Individuals who have an annual income exceeding $200K or a married couple that has joint income exceeding $300K in the two most recent years and have a reasonable expectation of reaching the same income level this year.
  • Individuals who have a net worth that exceeds $1 million (excluding the individual's primary residence).

With respect to legal entities:

  • Funds and trusts, with total assets in excess of $5 million, which were not formed specifically to purchase the subject securities, whose purchase is directed by someone who has sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
  • Any entity in which all of the equity owners are accredited investors.

The full definition can be found here.

In order to register and validate members, a potential member will need to supply METARISE with sufficient information to assess whether the member meets these legal requirements.

7. I am not based in the United States. Can I invest?

Yes, providing you comply with investor requirements set out in #8 (above).

8. Are you limiting the number of investors?

As noted above, the U.S. Securities and Exchange Commission and/or equivalent government bodies in other jurisdictions have not determined whether membership interests in METARISE are securities. 

As such, we will be limiting the total number of investors for our eventual private sale of $MRISE tokens to 99 accredited investors. 

In an abundance of caution, this limit on membership and accreditation status for U.S. contributors is put in place to:

  • comply with U.S. securities law;
  • prevent any one party from controlling a disproportionate amount of METARISE; and
  • limit the risk of look through issues for METARISE investors that are organized as funds or other legal entities.

9. How much are you raising?

We are raising US$10M for our first fund.

10. What do you look for in investors?

Aside from capital, we look for investors with access to relevant networks and/or insights that will be valuable to both the growth of METARISE as well as the startups and talent that we invest in. 

11. Will you make capital calls or am I required to invest capital up-front?

Given the size of the fund is relatively small, we would prefer to receive all capital up-front from legal entities and institutional investors, however we are flexible for larger ticket sizes. 

As for individual accredited investors, investment funds are required to be deposited up-front for membership to take effect. 

12. How will the funds be secured?

We will store investor funds in a multi-signature Ledger hardware wallet, and subsequently store private keys and the wallet separately in a secure vault. 

We will keep a portion of the funds in a hot multi-sig Gnosis wallet connected to Metamask to cover short-term investing, staking, or gas requirements. 

We will also use CoinCover to support backup and disaster recovery of private keys, as well as insure deposited funds. 

13. What is the minimum amount I can invest?

Institutional investors: we are ideally looking at ticket sizes of between $250,000 and US$2M. We are optimizing for a balance of diverse insights, and network effects, with a manageable number of stakeholders. 

Accredited individual investors: while we are planning on raising most of our maiden fund from legal entities, we want to empower individual investors to participate. As such, we will have a number of slots available for accredited individual investors. 

The minimum buy-in for individual investors is US$10,000.

14. Will you raise subsequent rounds of funding?

As with most venture funds, we will look to raise a subsequent fund partway through the deployment of our first fund, based on track record and initial market signals. However, this process is unlikely to occur until at least two years after the first METARISE fund has closed. 

15. Will investors get access to deal flow if we want to make additional investments in incubated startups?

One of the numerous benefits of being a METARISE investor includes access to deal-flow, which is especially important to web3 venture funds and angels. 

As an investor, you will have the opportunity to be personally introduced to, and provide additional direct investment into our portfolio startups and projects. 

16. What is the investment period?

We will invest the funds over a max of 5 years, but likely less, given all of the activity in the space. We will be aiming to raise a subsequent fund on the back of the initial success of this fund.

17. What is the investment term?

Unlike traditional venture funds that wait for a liquidity event, investing in tokens makes for a much more liquid investor experience. 

Whenever there is a significant event that materially increases the value of one of our portfolio investments, we will bring a vote to our investors to determine whether to HODL or distribute the upside. 

Aside from this, we will have a lock-up period of five (5) years, after which you are free to trade your METAFUND tokens on a secondary market. 

18. Can I withdraw my contributions before the investment term ends?

See 17.

19. How much carry do you take?

We take a standard 20% of profits. 

20. Do you charge a management fee? If so, what for?

We charge a 2% annual management fee, which we plan to recycle with profits. This is to cover basic operating costs, compliance, gas fees, and admin.

21. What kind of returns are you targeting?

We will aim to achieve a 25% internal rate of return, and a target net multiple on successful investments of 3X. 

22. Over what period of time?

Five years. 

23. How many startups are you investing in?

We will typically make investments of between US$50K - $US250K in early-stage opportunities; approx. 60-80 investments over the life of the fund, with reserves. Diversification is a key pillar of our investing strategy - the more swings we can take, the higher the likelihood of home runs.

24. What kind of startups are you investing in / what's your mandate?

We will focus on pre-seed and seed stage startups, but are open Series A opportunities.
We invest in both tokens and equity using either direct equity purchases, convertible notes, SAFEs, SAFTs, and token warrants.

While we have a focus on startups that come through our accelerator, we are open to investing in promising web3 startups from all over the globe - especially from emerging markets, where we think that the growth potential of crypto applications is its highest.

During this early stage of web3, we have a bias towards the following:

  • Infrastructure and Tooling (this includes: layer 1 and layer 2 networks, ZK proofs, interoperability tools, UX-optimized platforms for building and using web3, productivity and developer platforms, consolidation plays, crypto security, payments and web3 commerce,  analytics platforms, web3 marketing and advertising, web3 customer service tools, decentralized storage, censorship resistance, reg-tech, etc.)
  • Decentralized Finance (DeFi) Protocols
  • Media and Entertainment DApps
  • Community-owned alternatives to dominant web2 business models
  • Education

25. Are you targeting specific geographies?

We have a bias towards emerging markets, and in particular Asia, but we are open to investment opportunities from all over the globe. If it creates meaningful impact and has the potential to generate a 10X return, we will consider it.

26. How will you generate deal flow?

We will generate deal-flow from a combination of:

  • Online content (podcast, blog, reports, videos, events, educational content, contributions to third-party publications)
  • Our network (startups, mentors, coaches, ecosystem funds, venture funds, web3 friends etc.)
  • Our accelerator programs, bootcamps, and hackathons
  • Outbound marketing (intelligence gathering and direct outreach, targeted advertising)
  • Our METARISE community (contributors, investors, and community members will be actively encouraged to find and bring dealflow to us in exchange for METARISE tokens and exposure to our portfolio investments, and accelerator profits) 

27. How will you evaluate startups and make investment decisions?

Vinod Khosla, renowned venture capitalist and co-founder of Sun Microsystems, has a simple investment test that boils down to three questions.

  • Is there an obvious reason this WON’T work?
  • Does the founder have what it takes?
  • Will this generate a big profit (10X+)?

We elaborate on what's involved in answering these three questions in web3 in this article.

We will also turn to our LPs and Metarise community to triangulate our views were necessary in order to make a more informed decision about opportunities that might be tackling areas that we have limited expertise or experience in, and in order to mitigate the role of emotion, bias, and noise.

Finally, we anticipate that many of our investments will be our accelerator or program graduates, which will typically be aligned with specific ecosystem challenges, and give us more time to better understand business models and the people behind them, and make more informed decisions. 

28. Will investors be consulted for investment decisions? 

While investors will not decide on which startups get investment, investors will be able to influence decisions by contributing to our community online. 

Each investment we make will be presented to investors and our community as part of our communications, and as part of our efforts to triangulate views and make the most informed decisions possible.

Occasionally, we may open it up to a vote whereby holders of METAFUND tokens will be able to decide the outcome of an investment decision via a voting platform such as Snapshot. 

29. What is your track record finding and developing startups?

Since 2017, we have run numerous corporate startup accelerator and partnership programs for brands such as Microsoft, Village Roadshow, Lufthansa, Bank of New Zealand, the Korean Government, Allens Linklaters, Charter Hall, and many more.

We actively sought out early-stage startups to solve industry challenges, received and evaluated over 3,000 applications, and incubated 90 startups. 75 of these are still active today, and 22 went on to raise a combined US$185 million at a collective valuation of about US$1 billion. Find our calculations here.

If we had invested in each of our program alumni upon program selection the current return would be 3X undistributed over an average timeframe of 2.5 years, which compares favorably with average venture performance. This equals an undistributed gross IRR of 53%.

However,  if we were backing startups after the completion of a program, at which point we have more data points to pick winners from losers, based on our heightened knowledge of the team and product, then the IRR should, arguably, be higher. This is the model we will be pursuing with METARISE.

The METARISE model takes what we have done before, but pivots from corporate partners to network and protocol ecosystem funds, such as Harmony, Flow, Polygon, Avalanche, Skale, The Graph, and others who are in dire need of talent and projects. 

We are also complementing our long list of existing web2 mentors - who can help with traditional and digital business building blocks - with a deep pool of web3 mentors and coaches from projects such as Dapper Labs, Enjin, MintGate, The Sandbox, Harmony, and more. 

30. Who is on your team?

Our investment committee:

See 28 for more. 

31. Who is on your advisory board?

We are actively building our pool of advisors to complement our decision-making, and to date have secured the services of the following names:

  • Flex Chapman, co-founder of Krause House DAO.
  • Jennifer Tran, co-founder of MintGate.
  • Jin Kang, deal lead at GlobalCoinResearch.

32. Do you have an investment committee?

Our investment committee is comprised of Steve Glaveski and Shay Namdarian at this stage, although we may introduce two to three more people to the fold with complementary skillsets and experience.

However, we will draw on the diverse insights and expertise of our investors and community per #28 when making decisions. 

33. Will you invest in on-chain (tokens) and off-chain (equity) startups?

At this stage, we will invest purely in on-chain tokens (and token warrants), however we are open to expanding the scope of our investment as an LLC and investing in off-chain startup equity in the future. 

34. Speaking of which, what does the METARISE legal structure look like?

YOU SHOULD RETAIN YOUR OWN COUNSEL FOR PURPOSES OF EVALUATING WHETHER TO JOIN METARISE AS AN INVESTOR.

While there is no regulatory clarity on the treatment of tokens, we will run our fund as if it were a private investment company under Section 3(c)(1) of the Investment Company Act. This exempts us from the definition of an investment company. 

As such, we are also exempt from registering the METAFUND token as a security, according to Rule 504 Regulation D, which exempts registration for the offer and sale of up to $10 million of securities in a 12-month period. 

The rights and obligations of investors are set forth by the Cayman Islands Virtual Assets (Service Providers) Act. 

Investor liability and fiduciary obligations of investors are expressly limited to the extent permitted by applicable law.

METARISE will rely on a service provider(s) to facilitate various administrative functions on behalf of investors. For these services, the service provider will receive a fee.

35. Do I have any fiduciary responsibilities as an investor?

To the fullest extent permitted by applicable law, investors shall not have any fiduciary duty to METARISE or any other investor. Investors agree to interact in good faith and to engage in fair dealing.

36. Do I enjoy limited liability?

No investor will be liable for the obligations of METARISE for any amounts in excess of the amount of the investor’s contributions to METARISE, plus:

the Member's share of the undistributed profits of the METARISE venture fund, if any; and

any amounts distributed by METARISE to such investor. 

37. How will proceeds be taxed?

Each investor must rely on their own tax and legal representatives as to the tax consequences of joining METARISE or making purchases through METARISE. This will likely be pursuant to the tax legislation of your local jurisdiction. 

38. When are returns distributed?

See 17.

39. How are returns distributed?

Returns will be distributed either in FIAT to an investor’s nominated bank account, or via ETH to an investor’s nominated wallet address. 

40. How does voting work?

METAFUND tokens can be used to vote on proposals via Snapshot. It will not be a one-token, one-vote mechanism, and instead be a one-investor, one-vote mechanism. This prevents any one party from exercising disproportionate influence over voting outcomes.

41. Can I delegate my vote?

Yes.

42. What is the METARISE token, and what is its relationship to the venture fund?

The METARISE token is an ERC20 token we will use to incentivize accelerator participants, such as startups, mentors and coaches, ecosystem funds and sponsors, advisors, and investors. 

It will be earned in the first instance for work performed, in addition to other currencies such as ETH and USD. 

We may or may not choose to offer the METARISE token for private and/or public sale. 

In addition, METARISE token holders will receive a percentage of accelerator profits and incubated startup tokens. 

This will not dilute investors as these startup tokens will be paid to the METARISE accelerator in exchange for incubation and education, and come from a separate pool of startup tokens. As an investor, you will receive bonus METARISE tokens in addition to exposure to our venture fund.

*METARISE is a working title for the token

43. What are your tokenomics?

Our tokenomics can be found here.

44. Are these tokenomics stress tested?

Yes.

45. What’s the relationship between the venture fund and the accelerator?

The venture fund will invest (non-exclusively) in startups incubated by the accelerator. 

Venture fund investors will receive a percentage of profits from the accelerator, by virtue of holding the METARISE token.

The flowchart below provides further context. 

46. What smart contracts will be used?

METARISE will use various smart contracts to administer its activity. Primarily, the smart contracts are used to facilitate:

  • collecting members' initial contributions to METARISE;
  • voting;
  • delegating voting to third parties;
  • funding investments; and
  • distributing proceeds.

METARISE will use Coinvise's ERC20 smart contract as its foundation.

47. Are they audited?

Yes. Contracts will be audited by ConsenSys Diligence and audit reports will be published and shared with the community and investors. 

48. Can I invest in METARISE accelerator, in addition or separate to the venture fund?

Yes.

49. I am an accredited or institutional investor and have more questions.

Set up a time at calendly.com/steveglaveski/15min or email steve@collectivecamp.us