Deep Dive into the Daily Operations of Investment DAOs: How to Get Into Top-Tier Projects?
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Deep Dive into the Daily Operations of Investment DAOs: How to Get Into Top-Tier Projects?
Competitiveness comes from a sufficiently diversified network and market-leading recognition in specific domains.
Navigating Web3 tides with focused insightsAuthor: Wang Chao, Empower Labs
In the previous article, we explored the characteristics, structure of investment DAOs, and the importance of building member networks. This article will dive deeper into the day-to-day operations of an investment DAO. As before: there are many models for investment DAOs, and this piece cannot cover every variation in the market. Even among DAOs with similar organizational structures, operational details often differ significantly.
As a DAO, how do you actually make investments, and how are specific tasks carried out?
This is a question I’ve been asked 100% of the time in past conversations.
We rely on three main tools in our daily operations. 1. Discord – used for everyday communication. 2. Investment Portal – a custom-built dashboard that lists all project opportunities, organized by stage (New, Active, DD, Voting, Closing, Archive). This allows members who don’t have time to follow Discord to quickly catch up on current deals and investment status. The portal also includes features such as on-chain voting, net asset value tracking, fund movement logs, and vote analytics. 3. Zoom – used for deal calls and weekly meetings.
When a new investment opportunity arises, members discuss it on Discord for several days. If interest is low, we pass. If there’s strong interest, we schedule an online meeting with the founder, open to all members. After the call, we allow 2–3 days for further discussion, during which due diligence (DD) typically takes place. If no major disagreements emerge, we conduct an initial poll on Discord to gauge support for investing and determine the proposed investment amount. Once consensus is reached, we proceed to launch a formal on-chain vote. Upon approval, funds are unlocked and relevant paperwork begins.
The entire process is flat and relatively efficient, enabling rapid responses to market opportunities. That said, the saying “too many cooks spoil the broth” still applies. If most members like a project, things move quickly. If most dislike it, we also move quickly. But when opinions are sharply divided, debates can drag on for a long time, often ending without consensus—and sometimes causing us to miss opportunities. To be honest, though, I actually enjoy these debates. They represent a clash of intellects, and I often learn a great deal from them.
Of course, the daily work of an investment organization involves much more than just discussion and decision-making. Broadly speaking, it includes: fundraising, research, sourcing deals, due diligence, post-investment management, and exit execution.
Fundraising – Covered in the previous article: investment DAOs onboard members through targeted invitations, and each member must contribute capital. Thus, fundraising happens organically as the member network is built. To prevent voting power from becoming too concentrated, there are strict caps on individual contributions, which means the total assets under management (AUM) remain relatively small.
With limited AUM, individual check sizes are naturally constrained. When we encounter a promising project whose minimum investment exceeds what the DAO can comfortably commit, we have a process to quickly set up a Special Purpose Vehicle (SPV). The DAO participates as one investor in the SPV, while additional capital comes from members contributing beyond their regular commitment. Most members have both the available funds and the interest to participate in such deals. This approach allows us to remain flexible and responsive to diverse opportunities—even with modest AUM, we can meaningfully expand our reach and impact.
Research – There is no formalized workflow. However, DAO members generally possess strong analytical skills and deep expertise in their respective domains. Ongoing discussions on Discord serve as an informal yet effective form of investment research. While not systematic, these conversations span a wide range of topics and often include deep dives. For specific themes or sectors, we occasionally organize focused discussion sessions—covering technical developments, industry trends, and competitive landscapes across particular verticals. Relying on members’ specialized knowledge and active participation, this method yields valuable insights despite its ad hoc nature.
Deal Sourcing – Members are primarily founders and investors from diverse backgrounds, with a significant portion deeply embedded in Silicon Valley—the epicenter of the current AI wave. This positioning gives us access to numerous early-stage opportunities. To date, nearly all of our investments have come through personal networks. However, relying solely on networks has limitations in terms of scalability and consistency.
As our portfolio matures, we’re gradually building a reputation within the AI founder community, leading to a noticeable increase in inbound deal flow. For areas we’re particularly bullish on, we plan to become more proactive by publishing insights and investment theses to signal our focus and attract relevant opportunities—though this strategy hasn’t been implemented yet.
We also occasionally pursue projects we’re highly interested in even if no one knows the team personally. These efforts usually target later-stage companies, which tend to be more expensive, so we only allocate a small portion of capital to such deals.
Finding deals is only half the battle—hot projects are oversubscribed and selective about investors. Most founders of the AI startups we’ve backed had never heard of DAOs before, but after talking with us, they were happy to reserve allocation. Why? Because during conversations, they recognize the collective expertise, diverse resources, and rich background of our group—qualities that are genuinely attractive to founders.
Due Diligence – Similar to research, conducted collectively through group discussions and feedback.
Post-Investment Management – We use an internal AI tool to track public information about all portfolio companies, generating weekly reports. Beyond monitoring, each invested company is assigned a dedicated member responsible for maintaining contact with the founding team. Our philosophy is to avoid bothering founders unless necessary. We step in proactively only when the team needs support or faces clear challenges. Given that each member brings unique expertise and connections, we effectively function as a powerful group of de facto EIRs (Entrepreneurs-in-Residence). Leveraging this resource pool, we’ve already helped founders solve real problems.
Exit Execution – We’ve discussed and agreed upon some basic principles, but since we’re still in the early phase of investing, we haven’t executed any exits yet.
Beyond core investment activities, several self-organized working groups have emerged to handle media outreach, ecosystem partnerships, and organizing the annual "Portfolio and Friends" gathering.
That’s it for now. I’ll likely write another piece later diving into the challenges we’ve faced and key lessons learned.
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