Venture firm Bessemer counts on a decentralized network for deal flow

Quick Take

  • Storied venture firm updates market on DAO investing group.
  • Firm says that it has 100 “scouts” to scour for deals and propose them for on-chain governance votes. 
  • Bessemer said in March it would commit $250 million to crypto. 
In the world of venture capital, an investor's network is as good as her net-worth. 

Venture investor Bessemer is hoping that a decentralized network of scouts will help it spot the most innovative startups opportunities in the newfangled world of DeFi and Web3 consumer applications.

Founded in the early 20th century, Bessemer has backed firms like LinkedIn, Shopify, and Bumble, and has close to $20 billion in assets under management at the last count.

On Wednesday, the firm provided an update on its DAO and new scout program, which adds a crypto twist to the traditional scouting setup — in which individual angel investors bring deals to larger, more established venture firms. 

Bessemer, which committed $250 million to crypto in March, set up a so-called decentralized autonomous organization, originally dubbed BessemerDAO, to form a community of investors and other groups to share ideas and investment opportunities. The firm said the project is gradually becoming more decentralized, and will now begin assessing prospective deals sourced by a community of scouts, who will make recommendations to commit capital to projects based on governance votes.

Voting for winners

A majority vote from a committee of DAO leaders is required for a project to be granted funding, the firm said. Bessemer will invest $500,000 to bootstrap the initiative. 

The official vote can be viewed "on-chain" in addition to "broader decisions including: GC membership decisions (e.g., adding/removing members), launching new initiatives, incorporating new processes, etc."

As part of its ongoing decentralization efforts, the firm is rebranding the DAO to SteelDAO, which "pays homage to Bessemer’s roots and embodies a new and separate brand identity as the community becomes further decentralized and evolves separate from our efforts at Bessemer Venture Partners."


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