As you know, we recently launched a private VC deal for the Gaimin project. Due to the hype surrounding the project, our usual due diligence was bypassed in our rush to close the deal.
Initially, we were allocated $250K, with the condition that we share their links and socials to aid in hype and engagement. After signing all paperwork, this allocation was reduced to $200K ($180K intended for the community and $20K for us, as we didn’t charge any fees). In addition, ticket sizes were limited.
After closing the deal with the community and successfully raising funds with around 800 members participating, we were informed that our allocation had been further reduced to $140K.
Even after forfeiting our own $20K and making reasonable cuts, this meant significantly reducing allocations for everyone and issuing many refunds.
I attempted to discuss these issues with the CEO or founders of the project but was only able to speak with an advisor. My legitimate questions and attempts to negotiate for our community resulted in an ultimatum: accept the new terms within an hour or lose the allocation altogether. This unprofessional behavior and refusal to engage in meaningful dialogue prompted me to investigate further.
My research revealed several red flags, including the CEO/founder’s background primarily in traditional online marketing, with no evident experience in
Blockchain
Crypto
Gaming
Programming, or any related fields necessary for creating and leading a top L2 protocol project.
Additionally, none of the other core team members or founders. appeared to have the requisite experience either.
Conversations with a few other investors revealed that none had directly spoken with the founder/CEO, experiencing similar treatment from advisors.
Based on my traditional VC background and doing many investments in this space then the CEO and founding team are always involved in the capital raise and it is part of their main task and hence their intentional absence raised my concerns.
Furthermore, the project’s FDV increased by over 4X within three months, and its Bybit IEO/listing at a fraction of that FDV indicated potential significant sell pressure and challenges in achieving favorable multiples.
Given these concerns, and despite some disappointment from missing out on a hyped deal, I’ve decided the risks outweigh the potential rewards. We will not proceed with the project and will issue full refunds to participating members.
I’m happy to discuss it directly with the CEO if he reaches out for a discussion or alternatively happy to engage in a discussion about the project and my experience possibly alongside tech experts in a public forum such as Mario Nawfal Twitter spaces or with CryptoBanter.
On a personal note, I acknowledge feedback regarding my aggressive approach at times. I view our community as family and will fiercely protect it against any perceived threats. This stance, while not reflective of my usual demeanor, is sometimes necessary in response to unprofessional or unethical conduct within the industry.
As always, this is not a financial advice but my personal opinion and experience. I encourage everyone to conduct their own research and draw their own conclusions.
To our community, we will continue to do our best to bring you great deals and have a great upcoming pipeline.