Bugra Caglar 
Crypto-focused venture capital firm dao5 has announced the successful closing of its second funding round, raising $2.22 billion. According to Fortune, the main investors in this new fund are family offices and high-net-worth individuals.
dao5’s New Fund to Focus on Institutional Applications
Founded in 2022 by Tekin Salimi, a former Polychain investment partner and corporate lawyer, dao5 had previously allocated its first $1.25 billion fund to projects like Berachain and Bittensor. That fund has already achieved a DPI (Distributed to Paid-In Capital) ratio of 1.
The new fund will target institutional use cases such as stablecoins and asset tokenization. Through this fund, dao5 plans to invest in 15 to 20 early-stage projects.
Salimi, Known for Avalanche Investment, Strengthens the Team
dao5’s founder Salimi, known for his early investments in leading crypto projects like Avalanche, has strengthened his team. George Lambeth, previously a limited partner (LP) and angel investor in dao5’s first fund, has been promoted to General Partner for the second round.
Salimi’s fund is focused on seed-stage projects and is supported by an advisory board that includes prominent figures such as Avalanche founder Emin Gün Sirer. Salimi plans to transition the fund into a DAO (Decentralized Autonomous Organization) within approximately three years or once 70% of the capital has been deployed. However, this transition will depend on the fund’s profitability.
This structure represents an innovative experiment that merges traditional investment models with the DAO model of the crypto world.
How Does dao5 Work?
Each time dao5 makes an investment, the founders of the projects receive an allocation of tokens representing the fund’s profits. This means Salimi and the rest of the dao5 investment team are diluted.
Over time, this process results in each portfolio founder gaining economic exposure to the tokens of every other portfolio founder. The goal is to incentivize collaboration among founders and collectively increase the value of the tokens.
Salimi acknowledges that much of the tokenomics is still being finalized, and dao5 will not convert into a DAO until approximately three years in or once at least 70% of the capital has been allocated. Additionally, the DAO’s tokens will only hold value if the fund is profitable.
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