[Analysis] Unpacking the LAO
Since the LAO was announced, the efficacy of a decentralized venture fund has been put into question. These concerns include:
- "Wisdom of the crowds" reduces specialization in a highly competitive VC industry
- There is no incentive for any one individual to do the heavy lifting for sourcing and diligence
- Tokenizing startups can be detrimental since liquid investments reduce long-term commitment from investors
- Automated corporations create various tax and governance issues
The LAO team believes these issues are addressed with their unique approach of blending traditional legal agreements with smart-contract based governance mechanism.
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