Strategy for targeting corporate & institutional $POP holders

Edit to include deadline: please provide comments by Wed 19 Jan

Summary

Some corporate sectors - for example Superannuation Funds (Australia) or pension / retirement / 401k funds (elsewhere) - have significant financial assets and investments that could be redirected into $POP, creating a mutual benefit where those fund managers also have ESG and/or carbon-related drivers or obligations.

In addition to current partnership initiatives (eg other DAO treasuries investing existing crypto assets into $POP), this Advice item seeks to:

(1) discuss interest and other considerations re whether we as a DAO / community should pursue corporate POP holders

(2) propose a pilot approach, inviting an Australian ethical superannuation fund to invest in $POP to gain first-hand experience of the way the DAO operates to create value and impact for holders and beneficiaries, while giving the super fund the opportunity to influence Popcorn DAO’s direction via the governance tools

(3) identify interested members to assist with strategy direction and collateral preparation

(4) confirm next steps including any proposal or snapshot requirements

(5) also consider the potential value of global institutional $POP holders. If we do this right, we could create a template to systematically target the insto/corporate sector in every country.

Background

Australian legislation requires all employees to contribution a portion of their earnings (~9.5% p.a.) into regulated “superannuation” funds which can be withdrawn mostly on retirement.
Australian superannuation funds currently total ~$2.5t in assets under management.
This sector has achieved average growth of ~8% depending on the fund category (eg Balanced, Growth etc).
This sector is now under pressure to maintain this growth in a changing macro environment due to COVID and inflation among others.
In contrast, in 2021 the global crypto market cap grew 300% from $775b to $2.2t.
At least one significant Australian super fund has publicly declared it is considering whether to invest in crypto assets.
At the same time, many super funds are also increasing climate-related commitments and investments in clean/green assets due to member demands and regulatory requirements (eg TCFD obligations on company directors to consider climate risks)

Opportunity

$POP could be a very attractive investment for super funds for a number of reasons:

  • growth potential compared to current and expected performance of traditional financial assets

  • carbon neutrality of the product, supported by Patch verification which is important for institutional decision making and auditing

  • positive ESG-related impact through contributions to our beneficiaries, which will be attractive to ethical and B-Corp funds

  • ability for the funds to participate in $POP governance as token holder, including proposing changes to products and beneficiaries. (Eg many ethical funds invest in polluting companies in order to advocate for positive change from within. These funds would bring solid advocacy and governance experience)

Overall, $POP should be far more attractive than other crypto products (depending on investment criteria eg market cap etc)

Risks

Super funds have a fiduciary duty to act in members’ beat interests, and they may feel challenged by crypto sector’s lack of transparency.
It helps that Popcorn’s core team are identified/doxxed and key decisions are decentrally managed via the DAO.

Proposed next steps

(1) Discussion below. Let us have you thoughts, experiences, concerns etc, including changes to approach or scope. Note: this is proposed as a pilot only, so we can roll it out to other sectors eg corporates / family offices / celebs with philanthropic profile etc.

What “asks” do we have of the DAO?
Eg, as Michael suggested on recent AMA, a small amount of discounted $POP to entice the first fund to dip their toe in.

(2) Proposal, if required. (Eg Go / No go, including any asks)

(3) Snapshot, if required.

(4) If we have the support, target at least 1 fund and secure their investment in $POP.

If you’d like to be involved please put your hand up via the discussion thread.

Thanks everyone
BRMbm

9 Likes

To provide some general feedback:

I do agree with the incentive in discounted POP for these sorts of potential investors. I also agree with the notion that global funds will be super interested in $POP versus other assets. This is more of something to consider later on, but I wanted to ask if you considered requiring vesting for these superfund tokens? Perhaps slow emissions? I know that certain members of the DAO will view it as far too risky if there’s no set protection. The specifics of it can be worked out.

Aside from that, I agree with everything laid out here. Let’s give it some time for everyone else to have time to bring their thoughts here. Thanks for taking the time to post!

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Great question, and yes I agree that if there’s interest and support in offering a small amount of discounted $POP to early insto holders then we should attach vesting or other conditions.
And the corporates could purchase unrestricted $POP at any time.

It would be good to use this discussion thread to generate ideas.

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This is brilliant! Thank you so much for bringing this to the community @BRMbm I think a pilot approach is spot on, so we can learn from it and then make our next steps with those learnings in mind.

I’m curious… is it a ‘norm’ to offer a discounted price on a publicly token once it’s launched and the market is determining its value? I don’t know much about it but reflecting on it as a ‘not knower’, it feels like maybe that’s unfair to anyone buying it as an individual at the market price. And while of course I can see the overall benefit to big business buyers coming in to Popcorn (and how that could drive the market price up), it still feels a bit unfair to the every day person on the street who just wants to buy POP for themselves. I’d love to understand more about 1. whether offering a discounted token to big buyers post-launch is the norm; and 2. is that even possible technically at this point?

I would love to see a conversation arise alongside this about whether we need to have a criteria for industry buyers (i.e. they don’t invest in weapons, or the military), since it seems to me that would 1. go against our values and goals, and 2. could make it challenging to build partnerships with ReFi and social impact focused partners if we are actively seeking business from orgs that are investing and making money in things that aren’t in line with our partners. I’m happy to lead that convo if nobody else wants to.

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This was mentioned by Michael in last week’s AMA re other potential partnerships so we may need Michael to clarify whether possible for $POP.

Would this only apply if we’re offering something unique directly to particular holders? I don’t think we can control who invests in POP and takes advantage of governance functions - but I can see the risk that you’re referring to.

I think it highlights the need to redouble efforts to promote POP within communities that we want to work with and benefit etc.

Aha, yes, you mentioned that on our call - apologies. I wasn’t at that AMA but I trust that if @krychek said it was, then it is :slight_smile:

Yes, this is an interesting question. On the one hand, anyone can buy POP. That’s how it works. But it seems different to me when we’re actively seeking investment (and partnerships, and alliances etc.). It feels right to me that our business development is now inline with our goals and values, and that overall we seek to create business opportunities with aligned orgs and businesses.

I agree absolutely - there’s also intentionally promoting POP within communities we want to support and bring into our community.

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I see your point re active BD activities and agree.
For example, I’d be approaching ethical super funds and others that enable members to participate in decisions.

And this one: Rest Super investment chief Andrew Lill spies value in cryptocurrencies

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Hi, I love the idea, we should clarify two key questions before aping into this: 1. Can corporate/ institutional investors invest in tokens (I heard for example from VCs and some pension funds that they would need to change their incorporation documents to be able to do so). 2. How big investments are possible ? Most pension funds commit min. 5-10m per project, many have much bigger sums. Are there pension funds small enough to do a trial with ?

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Good call outs.
Yes the fund would need to change its mandate docs to allow it.

See example: Telstra VC firm & Super funds

The opportunity here could be to get in now while funds are thinking about what to allow in their new mandates (eg allow tokens as well as coins).
We could also approach Telstra Ventures directly and pitch to them to get industry intel.

@krychek mentioned family offices on the recent AMA as a potential class of investors attracted to POP. Should we merge the two sectors and write up a short list of potential targets (eg 5 super / retirement funds and 5 family offices businesses) across different continents? Approaches and pitch decks would be largely similar with only a few tweaks for each sector.

@anna-marie can you also advise re how we go to next step of advice model?

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Sure! So, the four steps of the Advice Process are:

If I was following the Advice Process here, I’d be reflecting on:

  1. Is there anyone else apart from the community that a decision will affect? (this could be team members, for example) and I’d be looking to ensure that I run this by them directly (if they haven’t responded to being tagged, for example).

  2. Have I sought input from subject matter experts? (if not, then I’d be looking to do that). Subject matter experts could also include seeking out information about how to best move forward with an idea that affects the whole Popcorn community, i.e. are there any specific processes in place?

If you feel comfortable that you have covered those two areas of input, then the last step is you deciding what input you’d like to incorporate (if any) from the input you’ve received during those two steps, and then making your decision.

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I wonder if this is too early for Popcorn as corporate and pension fund holders or other social impact investors would need to see a social impact report where I am unsure if Popcorn can show any social impact yet (would be at least a 3 years to show some impact with each grant).

Good point, thanks for raising.
If we zoom back let’s capture main objectives for corporates to invest in Pop:

(1) financial return on behalf of fund holders

  • we don’t yet have proof of Popcorn financial products or strategies yet as they are yet to launch.
  • however, performance will be visible upon launch

(2) deliver ESG benefits to broader community

  • see your point, it may take time to show how Pop makes a difference

(3) invest in carbon neutral crypto to reduce the corporate investor’s own footprint

  • we are tracking this and can (hopefully) make the dashboard available for investors to view.

So of the main objectives, 2/3 could be assessed pretty soon after we launch products so I’d agree it’s best to wait until then before actively targeting.

Also - proof of an efficient governance process should also give strong comfort to potential investors.