Ian Lee on DAOs, Venture Capital and the Promise and Risks of Web3

Ian Lee says he initially did not want to be an investor because he preferred building things directly. Work on factory floors and technology commercialization appealed to him more than the distance he perceived in venture capital. He later joined Citi Ventures and came to appreciate the impact of investing.

Lee says the idea behind Syndicate grew from a concern that conventional venture funding concentrates ownership and control of networks that he believes could be community-owned. He was inspired by the openness of initial coin offerings while acknowledging that their regulatory implementation was problematic.

He describes Syndicate’s ambition as turning investment functions into internet software accessible to communities. This is a founder’s account of his company’s purpose and capabilities. Access in practice depends on applicable law, product limitations and other conditions not established in the interview.

Lee argues that investing was already moving toward more distributed participation through angel syndicates and investor collectives. In his 2022 view, decentralized autonomous organization technology could extend that trend by coordinating capital and contributors online. This is the commercial thesis of the company he co-founded, not an established replacement for venture capital.

Asked how many people should join a DAO and who decides, he says those questions are still being tested. He recalls the 2016 DAO exploit and says many experiments will fail. In his observation, groups with a clear and specific purpose may have more staying power than generic groups.

He mentions examples ranging from a group formed to bid on a copy of the US Constitution to investment groups focused on women founders. Some examples use Syndicate, giving him a direct business interest. His claims about their success are observations, not independently established comparative results.

Stebbings challenges a DAO with four delegated administrators as essentially a venture fund. Lee accepts that early implementations may resemble existing organizations and says the technology could also support novel forms of coordination. He predicts that truly new markets may eventually exceed the value of converting existing structures; that remains a prediction.

Lee thinks investors in crypto need technical capabilities suited to the networks they back, alongside familiar skills such as hiring and marketing. He claims some traditional funds sold tokens because they lacked custody or operating capabilities, potentially harming token prices. He does not present evidence that this explains all such sales.

He argues that token holders can be both users and investors, so investors may need to participate as users as well. Stebbings asks whether a smaller investor can follow a specialized lead without rebuilding all its infrastructure. Lee says partnerships and useful traditional skills can still matter.

Lee calls web3 a possible next iteration of the internet. In his account, earlier internet value accrued largely through centralized companies, while decentralized protocols could distribute some ownership differently. These are his interpretation and proposed architecture, not a finding that decentralization or broad ownership is guaranteed.

He acknowledges that users also benefited from previous online services. His concern is that much financial wealth accrued to founders, investors and large holders of capital. He proposes user-owned alternatives to familiar platforms, asking whether participants such as drivers or hosts could share more of the value they help create.

Stebbings asks whether a technology shift might instead increase inequality. Lee agrees it could do both: a technology can be used to spread or concentrate ownership and control. He says outcomes depend on the choices of founders, investors and communities rather than on technology alone.

Both see usability as a barrier. Lee says the users who can navigate costly and complicated crypto infrastructure in 2022 are a limited group. Wallets, keys and interfaces would need to become easier for broader populations; the existence of a potential use does not establish that it will be adopted.

He recalls becoming interested in the possibility of financial access for people outside traditional banking. He says many startups with that goal failed because supporting infrastructure and user interfaces were missing or immature. He treats timing and infrastructure as part of the explanation, not as proof that blockchain automatically provides financial inclusion.

Lee wants storytelling that reaches people beyond existing crypto circles rather than focusing only on trading and profit. He says exclusionary narratives and limited participation by women and people of color constrain what gets built. His proposed remedy is to invite a wider range of people into designing the technology.

He identifies regulation, concentrated control, short-term profit seeking, exploits and hacks as potential obstacles. He recalls Mt. Gox and the 2016 DAO exploit as setbacks, distinguishing unintended failures from deliberate schemes. His view that socially useful projects will ultimately prevail is an optimistic forecast, not a certainty.

Asked about newcomers who suddenly call themselves web3 experts, he admits frustration but says some later become excellent founders or investors. Time, in his experience, reveals who remains committed. His estimates of how many people leave during cycles are impressions, not measured industry statistics.

Lee recommends Clayton Christensen’s The Innovator’s Dilemma and argues that technological change can hide a new business model. For introductions to web3 he points to a16z’s Crypto Canon and Jesse Walden’s writing on the ownership economy. Those sources express particular industry perspectives, including investors’ perspectives.

He says he changed his mind about NFT timing: after early experiments he expected the technology’s impact to take much longer, then saw rapid activity in 2020 and 2021. He predicted NFT-based media and commerce might emerge within one to three years and very large outcomes within a decade. These were speculative 2022 forecasts, not realized results.

Building Syndicate has required help from investors, users and partners, Lee says. He describes rounds with many funds, individuals and companies, including a Series A led by a16z, and says the resulting capitalization table is complex. His fundraising figures and characterization are his company’s account.

He argues that building internet infrastructure requires cooperation with others and accepting limits on control. That is also consistent with Syndicate’s business interest in DAO infrastructure. Stebbings asks when a DAO might invest $1 billion; Lee mentions a group he says held more than that in assets, which is different from having deployed that amount.

Lee predicts broader use of DAO structures for large-scale investing could take five to ten years, while saying activity on Syndicate was already occurring at smaller scale. He acknowledges that some structures might resemble conventional funds. This is his 2022 projection, not evidence of later deployment or investment performance.