[Withdrawn] Sushi Phantom Troupe - Strategic Raise

Hi,
Guys this plan is awful for one reason - It’s not fair.

Defi is all about giving the same opportunity to all regardless of their power or position.

Happy to have VCs involved and happy to pay for their services, but a 30% discount is a slap in the face to everyone who didn’t get a discount. Its just not fair, and this great project should absolutely not go down this route. An alternative must be found, please!

Please, please vote this down…

PS Nothing wrong with having the discussion, thanks to all

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Why do the vc’s need a discount? If they believe in DeFi and vision why not buy in at market? It’s definitely a dip.

Second, in the way venture math works…proposed discount is negligible to them
if they believe this will 10x from here.

I can see the justification of a discount for guaranteed extended lock up or vesting but no way do the amounts proposed seem reasonable - they should be locked up to 4-7 years.

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I’m excited about DeFi because it’s different. It’s values are different. I feel good about making money in this space. Sushi is one of my favourite project and a perfect example.

Giving away our Sushi tokens at a 30% discount to powerful VCs is sad, this takes away the good feeling in the project and makes it feel like TradFi, where the powerful get the best of everything.

It could be successful in increasing the value of my Sushi tokens, noone can know, but it wouldn’t feel the same.

Being sensible the 30% discount gives no contractual reason for VCs to help, some might some might not, but its a really bad deal for the Sushi token holders and community in my view.

I’m not against VCs or TradFi to be honest, but this is so much better, we want it to remain special and different.

I trust the Sushi team to contractually pay VCs for the strategic benefits they would provide using treasury funds, isn’t this better? Or the UMA proposal. Just never the 30% discount, it’s the wrong way to do it. We really don’t need to do things the same as TradFi, we don’t need to listen to them if they say this is the only way we get involved, then we say thanks but no thanks.

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Again, to review from a strictly quantitative perspective, the discount is warranted if there is a required lockup. To expand this calculus - if the proposal is settled in SUSHI as opposed to xSUSHI due to concerns of diluting existing holders then such a discount is further warranted as it represents unrealized capital efficiencies from not utilizing SUSHI during the lockup and vesting periods.

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Its not about being quantative. It’s about being fair.

If such terms are available to VCs and not ordinary token holders, this is not fair.

There is a reason they want the discount, and that is, they are going to make a load of money with it. Nothing wrong with that but the opportunity should be shared fairly.

Loyal holders probably plan to hold for more than 2 years, they don’t get any discount.

30% discount is a terrible look.

I want VCs involved! But dare to be different and find a better solution to getting them involved. Their contribution is desired but the discount frankly puts gives all the power to them ie will they provide such Strategic help to offset the value of the discount. At least there should be better ways to do this…

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Per proposal, “We would also offer a public segment of up to 10 million for community members willing to participate” So there is some degree of fairness at least to new entrants or those that want to add additional capital.

Those that already are all in you can argue it is a bit unfair to them. But those people will need to determine if they are willing to accept this proposal regardless because the strategic benefits that VC’s can bring are worth it.

I am myself still on the fence with this proposal because of the unfairness to this group who are already all in. But I am confident in the team. If this agreement is structured properly (the right numbers, assurances that VC will offer these strategic benefits (vs being free riders), and get VC’s to agree to terms to mitigate possible unintended consequences of this proposal then I think this is a pill worth swallowing.

Side note: One unintended consequence we should be aware of is that VC’s currently invested in Sushi dump their tokens and rebuy at a discount. I think it’s important that Sushi team has clear terms and makes actions such as this disqualifying. If done right this can be great but this needs to be done right.

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OK, let’s try and get responses to your 3 points then, it’s important, thank you.

For me on Strategic benefits, I would just emphasise what others have said in that 21 VCs cannot provide any valuable benefit. It would need several team members full time to work with so many. It should be 4 selected VCs no more. Otherwise it looks like we are giving VCs free ride for some other reason.

The other 17 VCs can presumably participate in the x million offered fairly to everyone else. Perhaps you want to make this segment larger to avoid the criticism that VCs are being given discounts in return for nothing tangible. The community should not be disadavantaged, as it is currently.

I suppose if the community did not want to take the 30% discount for long term, then fair enough but this won’t be likely in my opinion. How about looking at Cream Finance, they offered multi year lockups for additional % and most was taken up by compound finance. But it was fair.

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i’ve done a number of startups had successful exits and interacted with vcs including raise money.from them. i also have vc friends. not junior level associates but general partners.

it is fun as founders to be wined and dined and treated like superstars. it’s fun to go to the super nice offices be introduced to famous people and they are super charming when they want to be.

bottom line though is their job is to run money and they will stab this entire community through the fucking face if push comes to shove and it makes them a bit more money. that is what their investors pay them to do. if you want to see something ugly watch a bunch of vcs muscle out a founding team that put their heart and soul and lives into a project to get better returns. vc money is the most expensive money you can take, and most vcs will tell you the same in private. they will not hesitate to wrest control of the protocol from the community if that is what it takes to enhance the return.

Many VCs add little value beyond the money they put in. Which is fine. Usually, thats their value! You need capital and they have it. Anything else is usually a bonus. An intro here and there that may or may not help and some advice that you already know about anyway is all you can expect.

The only place i can see vcs helping is from the regulatory side and they better bring in some heavy ex sec/fincen chairmen who know how the system works and have a proven track record of helping companies navigate similar regulatory waters. Most don’t. most just talk a good game about their network and people they know and hardly deliver after they get their shares.

my suggestion:

bring in maybe 1 or 2 vcs with a small amount of money at market price who the team thinks will be most beneficial. this is already a discount since it is hard to buy a large quantity without moving the price as suggested above. if they aren’t interested in it at today’s depressed market rates they aren’t interested in the first place. they just want in on a firesale.

if one vc goes above and beyond then award them with tokens from the treasury. why pay up front?

if you let these guys in on such discount you will do more damage to the sushi community then anything you will gain in regulatory help. it’s not a great look after what has transpired in other defi projects.

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100%. You guys have done such a fantastic job, you don’t need VCs, you don’t need their capital. You have done better than you would have with their help from the beginning. Why risk this changing?

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I’m a former founder and current crypto operator. I’ve raised money from some of the funds @0xMaki helpfully brought to the table, invested alongside another few and spent time with at least 3 or 4 the GPs I expect will actually get involved with Sushi after the USDC hits.

Here’s some real talk:

  1. I think this raise is a good idea. The basic reason is that, if you raise from the right VCs, they’ll fucking fight for you, and that’s worth a ton.

  2. If you raise from the wrong VCs, they’ll do fuck-all for you, be a pain in the ass, and then dump ASAP.

^^^ @SBF nailed it here. What you want to do as a project leader is fill your cap table with the collection of VCs who will provide the things you need.

That can be intros to portfolio companies, recruiting support, regulatory guidance or just a shoulder to cry on.

What it is NOT is money.

What it also is NOT is 21 VCs who all do the same thing. And don’t have much skin in the game.

Because, why?

For example, Amy Tong Wu may be an enormous value add. But Lightspeed just raised a $4 billion fund. How much can she actually justify devoting time and resources to Sushi … if her check size is only $3m?

Now imagine having 21 clones of her … all doing almost the exact same thing! :roll_eyes:

(Sorry Amy! I am only singling you out because of you happened to post first! I actually think you are probably lovely!)

A better path forward

Based on this reasoning, I suggest we consider doing the following:

1. Retain a reasonable size treasury sale, but reduce the number of big VCs in the round. This has two key effects: it gives each VC more skin in the game and it makes it easier for each GP involved to justify devoting additional time and resources from her or his fund to the project.

Remember. Each GP supports a portfolio of companies. We will never be the biggest or the hottest - except now!

2. Choose each VC based on a specific contribution that we want. This is like arming yourself for an expedition. What do you really want? 5 crossbows but no boots or food?

Hell no! You want what you need to survive - crossbows, a battle axe, food, water, tents. So we should use this moment to get all the supplies we need!

3. Bring in a bunch of little guys who will have outsized incentives and power to help us…for very small allocations. This is the flip side of the skin in the game problem.

For only $5m, you can bring in 50-100 strategic angels who will do all sorts of high-value-add tasks for you from post great memes to get a dev out of jail. Again, however the challenge is selecting the right ones. You do not want 50 CMS interns! But ROI from getting a healthy collection of angels? Enormous because the incentives are so strong.

In sum:

  1. Keep the fundraise size large
  2. Cut the number of VCs to improve incentives
  3. Optimize our portfolio of VCs - now is the time to arm ourselves to win!
  4. Create an angel tranche to get outsized returns while giving up very few tokens

@0xMaki

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Tokenactivist raises a good point. How does $3M move the needle for a $4B fund? The answer is it doesn’t. I can’t speak for every investor here, but Lightspeed takes a crawl / walk / run approach to building long-term relationships. Our top portfolio positions are $100M+ investments over multiple rounds. Our first investment may be small, but if we invest even $100k in a project (which we have), our reputation is on the line, and the anticipation is to increase position (e.g. via spot) over time. Not every investor takes an active role, not all active roles are good for a company, and not every company wants an active investor. The team/community should decide what kind of value they want, then do references to learn if an investor has a history of providing that.

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This sounds exactly right. Most of the “better” VCs will write small checks early and scale up with the company. It’s why they set up growth funds, keep dry power and jealously guard and use their pro rata rights!

But how would that work here?

What the VC funds are buying now are tokens that already have fixed supply and a market price. Selling the VCs these tokens at a discount to the market price dilutes our treasury (and undercuts existing token holders).

If we scale this up in the future, we will just further dilute the treasury because of the discount.. In fact, each time we offer the VCs a bigger slug, we will be undercutting the existing token holders by more and more money!

Is this really what we want to do?

I’d strongly encourage the team and treasury to just allocate large slugs to the VCs they most want to include - not to gear up for future sales at below market prices.

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Great Points.
The other thing that is yet to be explored but is critical is what “strategic inputs” mean.
In CeFi, of course, it means many things ( talent, merger, intros etc.), but in a community-driven business, these are organic to a successful protocol. Any large protocol like Sushi is naturally attracting these. An argument here is that DeFi can be broad-based, but that I think doesn’t require a Venture Fund’s intros :slight_smile:

I would argue that there has be a roadmap on what Strategic inputs a VC brings to a table that warrants a discount. If they don’t meet the roadmap, then there has to be some repercussion for the same. I do know these are nebulous, but at least a shot has to be given.

In the absence of the above, what Tokenactivist says makes sense. Get someone who has significant Skin in the game OR is commit to a roadmap that is in. I mean, you can’t imagine playing the same game in a new financial ecosystem being built, which in a way is not kind of aligned to large pools of money controlling things

If not, then diversify a lot as the probability of getting a big strategic lever increases.

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Hi everyone, I’m Franklin from Pantera Capital. I love the discussion happening here and wanted to share more detail on the value that Pantera brings as a potential co-lead for Sushi’s strategic raise. We’re also planning to join the Community Call tomorrow and look forward to hearing from others in the Sushi community.

Quick rundown on Pantera Capital:

  • We’ve been investing into the blockchain ecosystem since 2013, with 100+ investments across cryptocurrencies, early-stage tokens, and venture-backed companies. Over that time, we’ve grown our focus and expertise in areas like fiat on-ramps, scaling solutions, developer infrastructure, DeFi and other decentralized applications - with an extensive base of resources, best practices, and team members to support projects and companies building on-chain and off-chain.

  • We invest in teams with a clear vision for advancing the blockchain ecosystem towards greater utility and adoption, with the ability to execute and lead. Our portfolio includes companies and projects like Alchemy, Wyre, Coinbase, Circle, Bitstamp, Bitso, Arbitrum, BitGo, InstaDapp, Terra, Audius (publicly disclosed list here: Portfolio | Pantera).

  • We’re long-term investors and early adopters, who bet with conviction. We’ve been through bull and bear markets with our founders, fighting in the trenches and through the darkest hours to help our teams keep building great tech and products for their users. We’ve been an educational resource and “first stop” for the institutional world and mainstream enthusiasts to learn about crypto - we’ve been able to translate the what / why / how of Bitcoin, Ethereum, DeFi, Web3, etc. for new audiences and we take huge pride in that responsibility & privilege.

About me:

  • As part of the Pantera investment team, my focus is on supporting and accelerating our portfolio teams - building out the tools and resources for hiring / talent, business development & partnerships, marketing / PR, M&A strategy and rolling up my sleeves with founders to break through walls and get shit done.

  • I was the first team member to propose SUSHI as an addition to our portfolio and have actively advocated for SUSHI as one of the most important and exciting projects and communities in DeFi amongst our network, including trading partners, centralized exchanges, and other investors. One of the more visible occasions here, where we shared our support for xSUSHI’s listing on Aave - also the first time we publicly disclosed our SUSHI position: https://twitter.com/FranklinBi/status/1359683748229308417.

  • Prior to Pantera, I was at J.P. Morgan where I helped launch the blockchain team in 2015 and built out the firm’s early strategy / R&D in blockchain and crypto before I left to work directly with early-stage crypto / DeFi companies in 2018.

What value does Pantera bring?

  • Hiring support: Sushi’s team and community are fantastic, but constrained on capacity and will inevitably need to scale. Our jobs board and talent network is a lightning rod for new talent entering the crypto / DeFi industry. We see great candidates leaving Wall Street / Web 2.0 / FANG companies for crypto and our goal is to connect them with the best teams we know. Talent is one of the biggest bottlenecks for the DeFi industry to reach its potential and therefore one of the highest-leverage activities we can help with. We have an in-house recruiter, a deep network of recruiting firms, an active candidate database - all of which has helped our teams get hires (not just candidates) for everything from smart contract engineers and product managers to CFO’s and biz dev leads.

  • Portfolio / Industry connectivity: Sushi’s built out a strong network of partners and relationships, as well as a solid playbook for fostering that within the community. Therefore, our added value for Sushi in connecting with potential partners inside or outside of our portfolio would be less about getting a “foot in the door” and more about accelerating the pipeline - by navigating to the decision makers, uncovering thoughtful ways to partner with mutual benefit, finding the partners who can help crack open new markets or products.

  • Technical / Market research: The sands are constantly shifting in crypto and it’s immensely difficult to track the latest and greatest developments, even for a project like Sushi that’s often been ahead of the curve in testing / experimenting / shipping. Having a partner who’s constantly vetting new tech and solutions can be critical to spotting the next big shift - e.g., which Layer 2’s should we focus our Engineering resources on? where should we prioritize cross-chain bridges & liquidity? what new tools should we be using to ship faster or improve scalability / security / UX? While Sushi hyper-focuses on executing the product roadmap and growing its usage, we’d help constantly scan the horizon for critical opportunities / risks emerging in the crypto ecosystem.

  • Resources / Vendors / Best practices: Over the years, we’ve taken many lessons learned from our portfolio teams on everything from regulatory strategy to recruiting to bootstrapping communities & liquidity. We’re also constantly building out a bench of vetted vendors who uniquely serve crypto companies / projects, e.g., security audit firms, law firms, market makers, insurance providers, etc. It’s funny to call anything a “best practice” in crypto because of how quickly things evolve, but we do our best to collect those lessons learned in real-time and share them. This also helps teams like Sushi save a ton of time and anxiety re: finding and vetting the right vendors.

  • Visibility / Marketing: We’ve built up an incredible audience over time through our monthly Blockchain Letters, conference calls, and annual Summits. Over 100k+ institutional investors, CEO’s, industry leaders - they’ve all looked to us to help them understand the most important topics / trends in the crypto / blockchain industry and the companies / projects working on them. As Sushi’s product set and narrative expands, we’d help carry that message to new audiences to help Sushi uncover new opportunities and gain visibility.

It’s getting late here and I’m winding down a 20+ hour workday, so will add more to this post as needed and also follow up on specific topics. Hugely appreciate the chance to present our perspective and big props to everyone participating actively in this discussion (0xMaki @SBF @paperhands2 amywu OmakaseBar pegbit) - it’s not a decision to be taken lightly and I’m hopeful that we’ll find the best course forward.

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I did want to share some quick thoughts on a question that’s come up a lot and is really important context for everything else: Is a 20-30% discount fair?

A couple ways we think about it:

1 - Based on ONE pricing model that’s often used to price illiquid assets (NOT our full approach to pricing), a “fair” discount JUST based on a narrow view of illiquidity impacting the value of an asset today is ~50-60% for SUSHI with a 6-month lockup followed by 18-month vesting period. This is NOT the discount we’re seeking and NOT a proposal - just context for why there’s often a discount involved in these types of transactions. Not saying 60% is the right discount at the end of the day. [Edits to this statement to clarify]

The model takes into account SUSHI’s historical volatility, crypto market volatility more broadly, and the proposed vesting schedule to back into an adjusted value for SUSHI under those liquidity terms.

Not able to share the exact model, but it’s similar to widely-used pricing models for options. I know that’s annoying / kinda shitty that we’re not sharing the model and less transparent than the community would prefer, but we’re also pretty confident that anyone taking a similar approach would reach a similar calculation and certainly believe no one should take it as pure gospel. At the end of the day, it’s just one tool we use to help us think about the fairness of a discount and if someone else’s model tells them something different, then more power to them. The market will decide which model was better.

So don’t take our word for it that 60% should be the discount - that’s not the point. The point here is this: our process isn’t just waking up one morning and saying “How greedy are we feeling today?” That’s a shitty human thing to do and an even shittier investment process. Our goal is to assess a risk-adjusted price based on math and it’s probably not perfect, but it’s one of the more sensible things we’ve come up with so far. Ultimately, we (and the investors who put their trust in us) own the consequences if we pay too much or too little because of that math. It’s also only one of many inputs. Valuation is an art and science. This is the science-y part.

2 - This raise immediately provides SUSHI’s treasury with up to $60m in proceeds. For now, let’s set aside the topic of whether $60m is the right number (which we should definitely discuss - maybe with more context from the Sushi team). So another way to look at the discount is: What would happen if the Sushiswap Treasury tried doing the same thing via the open market, i.e., market sell $60m in SUSHI?

image

As seen in the Sushiswap transactions above to swap SUSHI directly for ETH, a market sell would incur ~30% of slippage impact to the buyer and the overall market. For USDC, it would be ~43% slippage. The SUSHI in this market sell scenaro would be immediately liquid for the SUSHI buyer vs. the SUSHI sale proposed in this raise would be restricted for 2 years at a 20-30% discount.

3 - Funding rounds are auctions at their core - complex, multi-stage auctions with non-financial, hard-to-quantify assets that all factor into the perceived value of bidders (VC’s / vulture capitalists / face-stabbers / your preferred nomenclature) and their bids. So if this is an auction, then one important question re: whether the price is fair is “Is this a fair auction?”

There’s two reasons why an auction could be deemed unfair (more than 2 exist, but these are the key / most relevant ones):

  1. if bids are artificially suppressed, e.g., blacklisting, exclusivity, holding the auction on a secret island hideout known only to supervillains.

  2. if hidden externalities affect the bidding process, e.g., collusion, kickbacks, fake bids.

On 1), I don’t think there’s any credible signs of bid suppression. It’s fairly easy to tell from the length of the investor list that this raise was presented to a diverse set of funds, with various sizes, focus areas, team types. It’s worthwhile to think about whether it could’ve been more diverse, but clearly the team put in a lot of work and time to test the market rigorously and foster a healthy number of bidders. Eventually there’s a point where spending more of the team’s time and energy on fundraising isn’t worth it / likely doesn’t improve the auction’s efficiency enough to make a difference.

This thread is also a remarkable showing of what makes Sushi and its community unique. Publicizing this process as an open discussion thread is the farthest thing from bid suppression / a secret island hideout. So if there’s a better bid out there for a $60m block of SUSHI with a 2-year lockup + vesting schedule, whether you’re an individual or fund or collective, then this is a great place and time to bring that up for consideration.

On 2), there seems to be a concern that VC’s talk and know each other and therefore must be colluding to keep prices down or some mystery party is getting a finder’s fee for facilitating this raise. We can’t attest on behalf of others, but if there’s a cool kids’ table / cartel out there, we certainly haven’t been invited. The most reliable way to combat this type of hidden negative externality is through transparency and competition.

The transparency point is clear - by publicizing the full investor list, you create an opening for any possible cartel to be divided and captured. Anyone with a better bid inside or outside of the cartel can aim for the bottom of the tribe and put together a better alliance Survivor-style, until an efficient market price is reached.

The competition point is maybe less clear, but pretty easy to state: We compete like hell. For deals, for capital, for reputation - yeah, we definitely compete. Sometimes we find fellow investors that we work well / vibe with, sometimes we find investors who shut the door on our face because they want to eat our lunch. That’s cool and fair and does a great job at preventing collusion.

TL;DR - Based on the above, it seems like a 20-30% discount is a reasonably “fair” or math / market-based price for the liquidity terms of this specific deal, rather than a way to “sweeten the deal” for VC funds. Whether it’s the right deal ultimately is up to the community.

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1 - Based on our pricing model, we believe a fair discount is ~50-60% for SUSHI with a 6-month lockup followed by 18-month vesting period.

the balls it takes to say this is just a slap in the face to defi and the sushi community. If you guys actually cared about growing the protocol you would know this lockup / vesting is an absolute joke.

how about less talk about price and your “fair-value” pricing models and what you guys would actually do for the sushi. everyone has money…but who has the proper tools / ideas / drive to actually make this beneficial for both parties involved.

What would happen if the Sushiswap Treasury tried doing the same thing via the open market, i.e., market sell $60m in SUSHI?

i also like to market sell everything on sushiswap when i want the best price…

less talk about money more talk about what you guys will do to benefit sushi

/stomponcig

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Great Thoughts and love the work you are doing at Pantera.

However, let me try to see if these can be quantifiable milestones. While I know all of them are hard to measure/quantify but then we should not be thinking in Crypto from the traditional lens.

  1. Hiring support- → What does that translate to? Assuming that you agree to Sushi’s hiring process how many people can you help recruit? The sushi team can share a broad roadmap to estimate hiring needs. Let’s put a number to this and smart contract this. If the goal is missed vesting period increases or a fine is put.

  2. Portfolio / Industry connectivity → This is as generic as it gets. What does this mean? If you are investing there has to be a thesis on what partnerships can happen. Let’s put a definite outcome. That hey will get x number of partnerships stitched in Y time. In fact, even before the raise, the Sushi team & community should know what your partnership CRM looks like.

  3. Technical / Market research - Who scans these? Are these tech leads? If not then you can potentially bring the noise to the ecosystem. Also, the community should decide on say which L2 to focus on and not on individual expertise. While I clearly see the merit, to me again this is too generic

  4. Resources / Vendors / Best practices → Definitely a value for the community, but this should dovetail into point 2

  5. Visibility / Marketing - Agree. That is one thing that a lot of Defi projects are missing on how to make them more mainstream.

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Good to see pitch from the two potential investors. Community will also like to hear the answers to the following questions

  1. Do you intend to provide a boost on the liquidity front in an ever growing competitive market?
  2. Majority of the VC’s are invested in many DeFi projects some of which are rivals or potential rivals to Sushi on the Market. What are your thoughts on conflicts of interest and how would you approach it if such a situation arrives in the future?
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1 - Based on our pricing model, we believe a fair discount is ~50-60% for SUSHI with a 6-month lockup followed by 18-month vesting period.

What would happen if the Sushiswap Treasury tried doing the same thing via the open market, i.e., market sell $60m in SUSHI?

I think you are missing the fundamental point of this raise. The sushi team does not need to raise money. Hence trying to compare the market impact of one stop dumping $60M sushi, which is being disingenuous in its own right, is completely useless. The point of the raise as I understand it is to bring together a couple of long term aligned VC’s to support the project and use their connections to expand the general reach of the sushi ecosystem. Diversifying the treasury, while being a nice benefit in of itself, is not the core goal of this raise.
Now I do agree that having a “fair” discount is necessary to attract the right VC’s that will actually be active and beneficial for sushi, however IMO depending on the size of the raise, even a 30% discount should be attached to a significantly longer vesting period. We’re already currently seeing the negative effects of having such a large vesting period hanging over the project from the ongoing sushi rewards vesting, and adding another unlock period right after this current one ends is honestly quite a horrible idea in my opinion.
I also think that having 21 investors is quite ludicrous, as is only dilutes the general allocation each VC gets and like tokenactivist said will result in sushi being just another tiny allocation in their fund. That being said, I would advocate for having at least a one year cliff, followed by a minimum of 24 months linear vesting targeting at a maximum the 10 most aligned and beneficial VC’s. Even if that would require a more significant discount I believe it would be well worth it.

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Hey everyone - I help run a thesis-driven venture fund called Compound focused on both highly technical early-stage companies as well as crypto broadly as a category. As a Sushi holder, I figured I would share my $0.02 (disclosure: Sushi makes up a material portion of my personal crypto portfolio + we are investors in Multicoin).

Round Dynamics

IMO the dominant strategy here would be to anchor the round with 2-3 major investors which equal at least 40% of the capital and then build a collage of smaller firms with a specific value add attached to them. I agree that having them articulate what they want to bring to the table is a fair ask from the community, just as @amywu has so eloquently done.

In terms of structure - if we truly want long-term aligned investors I would stretch out the vesting period or backload it more on vesting, and/or create a cliff that is 12 months (@0xMaki i don’t think increasing discount materially should be pre-requisite and I believe the traction of this proposal will mean Sushi has plenty of demand). As venture investors we raise 10 year funds with the idea that we want to be long-term aligned with our companies that create massive outcomes over a 4-6 year time horizon (perhaps 2-4 years for growth stage). While 6 months in DeFi is like 3 years in normal tech, I do think venture investors should have fairly low pushback against longer time horizons, especially if they are able to sell rewards after a cliff vesting period.

Why Institutional Investors

Advocating for venture investors (I’m obviously biased), at the growth stage, venture investors are often great as sounding boards for their given founders/portcos, as well as unlocking mechanisms surrounding areas of commercialization or scaling. With this in mind, I too believe it’s important to figure out how as a community we want institutional investors involved in governance and/or what their ultimate vision for Sushi is over time (this should be a discussion, not a single pitch from a VC → community).

For me, one of the biggest things that Sushi has going for it is an increasingly horizontal approach to building a suite DeFi products, thus I would prioritize a syndicate that can help think through the constellation of use-cases within DeFi that should be consolidated within Sushi and/or that Sushi should actively partner with to bring onto the core platform. I’ve been impressed by the launch of products like Miso and Kashi Lending and there are likely many other possible expansions that will be enticing over the coming years, but might not be dominant for Sushi to focus on in short-term vs. medium/long-term.

VCs have lots of experience thinking through the long-term sequencing of product roadmaps in order to gain market share, while also having the luxury of being removed from the trenches and seeing innovation at the earliest stages, which will be helpful specifically for a project like Sushi that could be a core leader in the maturation phase of DeFi which again, I believe could be about consolidation of some kind relative to the fragmented/disparate behaviors we see today enabled by composability.

The next order thinking of building a lasting community should be survival in the early days, and aggressive expansion in the later days. What I mean by this is that if/when a true bear market comes, having a group of investors that can participate in the community discussions and governance votes surrounding when to be aggressive while other projects aren’t able to move as quickly in bear markets (due to our large treasury and community relative to others except a few core projects), as well as that can possibly further fund offensive moves during these times is incredibly helpful (to this point of why having more concentrated leads with large funds, is an asset).

Related to this, I would add that similar to the view on product sequencing, the holistic, long-term oriented view of smart VCs within the space also will allow us as a community to perhaps better think through strategic treasury management. (not to pump a post but i’ve written about this here: ).

As a final note, I do think the addition of great firms like many of those listed will help bring some form of brand halo to Sushi that we have been missing. As a community we all have looked at the Sushi token price at one time or another compared to competitors and not fully understood the discount relative to metrics, while in the back of our head wondering if this was a brand perception issue (@0xmaki said as much on a podcast recently). Over time, it’s likely that this halo should deteriorate as capital continues to commoditize, but for now there is some brand signal that comes from large institutions backing you, for better or for worse.

TLDR - I support this at a high level, think we should be intentional but understand how these firms want to engage with Sushi, should have longer vesting, and am excited by many of the partners listed.

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