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Ian Lee: Why DAOs Will Replace Venture Capital; Biggest Threat to Web3 | 20VC #893

Ian Lee is the Co-Founder of Syndicate, a web3 startup that has raised over $28M from a16z, Kleiner Perkins, IDEO, and 300+ investors. Previously, Ian was Managing Partner of IDEO CoLab Ventures, a crypto venture fund backed by IDEO focused on web3, crypto, and blockchain startups. From 2017-2021, Ian led investments and helped incubate 80+ crypto startups in the areas of DeFi, NFTs, DAOs, and more. From 2014-2017, Ian was the Head of Crypto at Citigroup and Citi Ventures globally. Chapters: 0:00 How did you make your way into investing? 3:23 How did Syndicate come about? 6:25 DAOs are the future of VC 9:24 How do you determine who's allowed into your DAO? 13:01 How are DAOs different than Venture Capital? 17:10 Winners and Losers of Crypto today 21:36 Can I do a follower fund with Avichal? 21:55 Crypto is the future of the internet 30:30 Could crypto cause greater income inequality? 32:38 Greatest opportunity in crypto today 35:40 How important is storytelling? 41:34 Biggest threat to Web3 44:00 VCs' sudden fascination with Web3 46:34 Favourite book 50:35 What have you recently changed your mind on? 53:17 Hardest thing about building Syndicate 56:03 How long until a DAO invests $1 billion? In Today’s Episode with Ian Lee We Discuss: 1.) Ian’s Entry into Tech and Crypto: Why did Ian decide early on that he did not like being a VC? What was it that changed his mind, showing him the impact investing can have? What have been the most significant but non-obvious developments in crypto? 2.) Why DAOs Will Replace Venture Capital: Why does Ian believe that DAOs will replace venture capital firms over time? How does Ian analyze the current landscape of Web3 investing and VC? Can existing firms layer on a Web3 Partner or Fund and win in the new Web3 landscape? How will the next generation of Web3 native firms be structured? 3.) DAOs 101: What really is a DAO? What is not a DAO? How are DAOs structured? How many people are invited? Who decides who is invited? How are decisions made within DAOs? How does this differ dependent on structure? What are the single biggest challenges that DAOs face today in operations? 4.) Crypto is The Future of the Internet: What does Ian mean when he says “crypto is the future of the internet”? What does this mean for the distribution of ownership and wealth in the next generation of the internet? Do DAOs and Web3 do more to harm or hurt income inequality today? What are the drivers that would lead Web3 to centralize wealth even further? Items Mentioned in Today’s Episode with Ian Lee: Ian’s Fave Book: The Innovator’s Dilemma: The Revolutionary Book That Will Change the Way You Do Business Ian’s Fave Web3 Resources: a16z’s Crypto Canon, Jesse Walden’s: The Ownership Economy 2022 Why DAOs Will Replace Venture Capital, What Existing Incumbent Venture Firms Can Do To Survive, The Biggest Challenges Facing New DAOs Today and Whether Web3 Will Bring More or Less Income Inequality #IanLee #20VC #harrystebbings #cryptocurrency #dao #technology #venturecapital #web3 #investing #futuretech #decentralization

Harry StebbingshostIan Leeguest
Jun 7, 202258mWatch on YouTube ↗

At a glance

WHAT IT’S REALLY ABOUT

Ian Lee Predicts DAOs Will Transform Venture Capital and Web3

  1. Ian Lee, co-founder of Syndicate and long-time Web3 operator, explains why he believes DAOs (decentralized autonomous organizations) are the logical next step in a decades-long shift toward more decentralized, community-based investing.
  2. He contrasts traditional VC structures with DAO-enabled models that can coordinate financial and human capital natively on the internet, arguing these will both transform existing funds and enable entirely new internet-native organizations.
  3. Lee frames Web3 as the next iteration of the internet, where value and ownership can accrue directly to users and communities rather than only founders and institutional investors, while acknowledging the technology can also exacerbate inequality if misapplied.
  4. The conversation covers the current limitations of DAOs, UX and storytelling gaps in crypto, regulatory and speculative threats, and why Web3 needs more pragmatic, first-principles thinkers rather than short-term “tourists.”

IDEAS WORTH REMEMBERING

5 ideas

DAOs extend a long-running shift toward decentralized, community-based investing.

From AngelList syndicates to solo capitalists banding together, investing has been moving away from centralized funds toward networks of individuals; DAOs formalize and accelerate this by letting communities coordinate capital and work natively on-chain.

Purposeful, narrowly focused DAOs work better than vague, generic ones.

Early evidence shows DAOs with a clear, specific mandate (e.g., buying the U.S. Constitution or funding women founders in crypto) have more staying power and better decision-making than broad, unfocused investment clubs.

Web3 investors must build native capabilities or risk becoming irrelevant.

Crypto networks often require investors to custody tokens, stake, run nodes, and participate in governance; traditional funds that can’t do this tend to dump tokens, hurt projects, and lose long-term access to the best founders.

Web3’s core innovation is business-model and ownership change, not just tech.

Lee argues the real disruption is shifting value capture from centralized Web2 platforms to protocols and user-owned networks, enabling models where drivers, creators, or community members own meaningful stakes in the platforms they power.

Web3 can either alleviate or worsen inequality depending on design choices.

Like social media, the technology is neutral; token models, governance, and distribution mechanisms can either decentralize wealth and control or concentrate them even more tightly among early insiders and capital holders.

WORDS WORTH SAVING

5 quotes

DAOs are a technology in Web3 that enable financial capital and human capital to coordinate natively on the internet together very quickly, very cheaply, and very efficiently.

— Ian Lee

What Web3.0 does is it actually enables the protocols of the internet, the networks of the internet, to start to create and capture value.

— Ian Lee

You can’t take the same strategies from Web2 and then just think that because of that you can win in Web3.

— Ian Lee

Technologies don’t give a shit about people… it’s really up to us how these technologies are applied for human beings and society.

— Ian Lee

What we need, the industry needs, are people who can look at this from a first principles perspective and grok what is actually meaningful here and what of it is not.

— Ian Lee

Ian Lee’s path from operator and consultant to VC and founding SyndicateWhy DAOs are a natural evolution of venture capital and investingWeb3 as the “ownership economy” and the next iteration of the internetStrengths, weaknesses, and current experimentation around DAO design and governanceHow crypto/Web3 investing is changing investor capabilities and founder expectationsInequality, inclusion, and the social impact potential and risks of Web3Barriers to mainstream adoption: UX, infrastructure, regulation, and poor storytelling

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