Thread by @DoctorJayPeg

Not sure what to make of the @dust_labs VC raise annoucement? let me break it down for you. 👇

a 🧵 #Solana #SolanaNFT #NFTs #y00ts #DeGods

First off, I want to aknowledge that VC funding has bit of a bad rap in the crypto world. In some cases this is deserving but in many it is not. This thread is not made to debate the efficacy of VC. I will say this is an all star lineup of investors. Shoutout @SOLBigBrain

So what is @dust_labs anyway?

Dust Labs is a software company that builds products for NFT projects. The y00tlist scholarship app/mint site are examples of the type of products the company will be developing. @kevindegods is an experienced dev and will be taking on the CEO role

Why raise a venture round?

To put it simple it allows you to move fast. Building out teams quicker, develop products faster, iterate more, and in turn deliver better customer experiences than your underfunded competition.

Round Overview:

$3.5M for a 10% equity stake in @dust_labs valuing the company at $35M ($38.5M post-money)
$3.5M for an undisclosed amount of $Dust at spot value (value $Dust was trading for at x time) which will vest over 4 years

Why is this a big deal in general?

This raise brings a new level of legitmacy to not just @DeGodsNFT/@dust_labs/@y00tsNFT/$Dust, but to every Solana NFT project building legitimate businesses. This is a groundbreaking moment for the space on the biggest stage. Moves like this...

are a great example of a rising tide raising all ships. Because of this raise and the public manner in which it was annouced, more capital will flow into the Solana ecosystem and further cement the entire chain in the omnichain future we are hurdling towards.

Why is this a big deal for @dust_labs?

1. This raise will provide them sufficent capital to build out a top tier dev team
2. The round includes seasoned/disciplined investors like @chapterone (early investor in Dapper & FTX) which signals they have a legit business model/plan

3. The round includes strategic investors like ME & @metaplex which provide @dust_labs a clear path to partnerships/integrations/distribution for their software products
4. The company sold a relatively small equity stake giving them room for additional/larger raises later on

Why is this a big deal for $Dust?

1. VCs accepting $Dust signals there will be clear use cases for the coin in the future (likely on the @dust_labs roadmap)
2. This raise transitions $Dust from a "meme coin" to a specuative asset (might I dare call it... investable?)

3. The portion of $Dust sold will be locked up for up to 4 years which means less on the market. The vesting schedule sounds like it will follow a similiar one as equity with a 1 year cliff. (1/4 vests after the first year and then 1/16 quartertly till the end of 4 years)

Why is this big for Degods/y00ts?

1. Both projects still hold a bunch of $Dust in the treasury (VCs wouldnt accept it if they dont beleive is going to appreciate in value)
2. The $3.5M raised from the $Dust sale will go to building out the project teams and delivering utility

3. Both projects are inherently associated with @dust_labs. While this may not hold clear monetary value without a revenue/profit share, there is value in this assication. Imagine if Apple had an NFT community before it launched. Safe to say their floor would probably be mooning.

What does the raise imply?

1. There will be additional revenue streams/ways to accrue value on the way for @dust_labs
2. @dust_labs has begun it journey to an eventual acquistion or IPO (likely within the next 5-10 years) as $$ will eventually have to be returned to investors

Lastly I want to leave you all with a list of outstanding questions that I hoped will be answered at the upcoming Q&A. I have joined these spaces before and never get let up to ask questions so hopefully some of you can ask these for me if you get the chance.

1. Where did the $Dust come from? (Likely came from the treasury reserves but I beleive @y00tsNFT and @DeGodsNFT have seperate treasuries so would be good to get a breakdown)
2. What was the average price $Dust was sold to the investors at?

3. Will there be anything that ties @dust_labs to @y00tsNFT/@DeGodsNFT outside of $Dust being used in their ecosystems?
4. Was there a lead investor on the round? (Signals who holds conviction)
5. Did any investors recieve a board seat?

6. Is the team planning on building in public and giving the communities insight into the operations/plans of @dust_labs?
7. Would the team consider giving DeDAO/y00t DAO a board observer seat? (I think this would be a cool way to keep the communties involved)

8. What specifically will the funds be used for? (if for hiring, what roles will they be targetting?)
9. When does the team plan on raising its next round? (common VC question and will signal the cash runway the company has and the speed they plan to move at)

There is always a lot of uncertainty going into and coming out of a fund raise. It is best to not speculate on the answers to these questions as I am sure they will all be answered in time. Lets all take a minute to congratulate @frankdegods and team on the raise.

I wrote this thread while cooking pasta so im sure there are some typos/stuff I missed. If there are any questions you have feel free to add them below and someone may ask them at the upcoming Q&A. Still relatively new to the thread game so would appreciate any feedback or a RT🤝

Addition Question:

Why didnt they wait till after the y00t mint to raise capital? (I feel the recent success could have sent the comapny value even higher) (also important to keep in mind that raising at the highest valuation possible isnt always the best move)