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1. Introduction
A few months ago, Arbitrum funded the Arbitrum CollabTech Hackathon through Questbook. This month-long event has just ended, having gathered great talent and energy.
We’ve got
- 164 applications and 144 participants
- 20 projects submitted
- 15 finalist projects built on Arbitrum.
- 3 winners having built a narrowly focused PoCs
We’ve created a funnel for builders on Arbitrum and we want to sustain this momentum. However, without support, the teams will soon seek opportunities elsewhere. Questbook new protocols track is out of funding but, even if it had funding, the projects need not only capital but also network access and expertise.
RnDAO proposes to co-fund (roughly 50-50) a program in partnership with Arbitrum to invest in and support these teams.
This program is designed to take projects from a hackathon PoC to engage in systematic customer validation, iterate and develop an MVP, and get their first 100 users. As such, we’re leveraging the raw talent and expecting the projects to evolve significantly as they engage and validate with customers, achieving traction at the end of the program.
2. The Solution: Turn Hackathon talent into Long-Term Success
Early-stage projects often stall or fail because they lack a deep understanding of their target audience and its needs. Systematic customer validation can significantly increase the likelihood of projects thriving beyond this initial stage.
This initiative, co-funded by RnDAO and Arbitrum, aims to build an ecosystem of unique Arbitrum-based projects that will continue to grow and attract new projects.
We’ve designed a 6-month, two-phase program to capture the best of the hackathon talent and energy.
Phase 1 focuses on validating ideas (customer development, lean startup, and design thinking methods) and understanding the market landscape.
Phase 2 supports projects to move from PoC to the development of a market-viable MVP and securing the first 100 users.
Here’s how:
We will select the 4 most promising hackathon teams to join the program (through due diligence by the RnDAO investment committee).
Each project will receive an initial grant (2k per cofounder per month, max 12k) from Arbitrum to support their participation in Phase 1.
Upon successful completion of user research, validation of interest, and presentation of a viable business case (solid pitch deck), the top 2 projects can move to Phase 2.
Phase 2 projects are awarded an additional $38k from Arbitrum and receive hands-on support (sales strategy, biz dev, marketing amplification, intros to funders, team formation, setting up ops processes and legal, setting up agile product development processes, etc.).
Goals:
short-term (6 months): projects validate their concepts with customers (first 100 users) and generate traction to fundraise from investors or otherwise receive follow-on funding or generate revenue.
long-term: create a group of unique ventures that collaborate and integrate (business cluster), drawing in new projects like a magnet with less direct involvement from our team.
3. Proposed Support Program
Program Structure (Two Phases)
By breaking funding and mentorship into two distinct phases, we derisk capital allocation. Only projects that successfully validate customer demand and can showcase a market gap in the first phase will advance to the second phase, ensuring that resources are focused on ventures with proven potential.
Phase 1: Customer Validation (3 Months)
Funding: Each project receives $2,000 per month per cofounder (max 2 cofounders receiving funding per project), totalling $12,000 per project for Phase 1.
Goal: Support validation with real users to confirm demand and solidify the project’s foundation.
Process: Most hackathon projects lack any customer validation and have a shallow understanding of the problem. As such, they fail to gain traction and die. In Phase 1 we focus on addressing these issues head-on by guiding projects through a structured customer validation process, with
weekly strategy and customer development mentoring sessions
shadowing user research calls and providing feedback
multiple hours of hands-on support per week (up to 8 hours per week directly with each project and extra cohort work) to refine their outreach campaigns (tactical support on copy, messaging, refining target user groups, introductions, implementing automation tools, etc.) and support on making the competitive landscape.
Transition from Phase 1 to Phase 2:
Assessment by RnDAO investment committee (we’ll invest significant labour in the next phase and so will only approve teams we deem viable).
Assessment based on market viability (clearly understood customer problem, market gap, proposed solution based on customer insights, viable team).
Phase 2: Development and Scaling (3 Months)
Funding: Projects that successfully complete Phase 1 will receive an additional grant of $38,000 each, amounting to a total of $50,000 per venture across both phases (enough to build and market test a basic MVP plus 3 months runway for market testing and securing the next bit of funding).
Goal: This phase supports full product development, go-to-market strategy, and readiness for sustainable operation, whether through fundraising, revenue, or further grants.
Process: After initial customer validation, the key challenge for founders is being spread too thin, while needing to set up an effective, agile product development process to quickly validate hypotheses and accelerate product-market-fit, ensure financial sustainability (pitch development and fundraising), set up a fully functioning team (talent recruitment), and operate the organisation (admin and ops). We’ll help teams with all of these challenges, operating as a fractional c-suite (down in the trenches with them, up to 10 hours per week with each project and extra cohort work) and fast-track their brand recognition and network with the support of our marketing team.
RnDAO Program’s Value and advantages over regular incubation programs
Swarm Collaboration: participants join an alliance of similar projects, encouraging integrations (good for project retention in Arbitrum), sharing best practices, co-marketing, cross-selling, and more. RnDAO facilitates this through a system of guilds, collaborative databases, cross-ownerhsip, and facilitating specific collaborations.
Not just advisory, hands-on operators: we get our hands dirty working directly in the projects, fast-tracking their development.
Network access:
Support in establishing customer relationships by leveraging the RnDAO vertically-specialized network and peers’ networks.
Assistance in securing additional funding and achieving self-sustainability.
Talent network and talent attraction support via RnDAO community and comms channels.
Enhanced Visibility:
Increased attention from investors and customers through the RnDAO brand umbrella and marketing initiatives.
Combined, these strategies enable us to provide high-quality and hands-on support, customer access, market insights, and talent access, resulting in faster time to market and reduced failure rate for projects.
More on Swarm methodology and data-backed comparison with other types of programs: https://www.rndao.io/blog/post/startups-from-solo-to-multiplayer-from-ad-hoc-to-systematic
Overview of support offered: ​​
https://docsend.com/view/jys5wqqg9vi8qknm
Program Outcome:
In six months, we aim for at least 2 of the projects to:
- Get their first 100 users.
- generate revenue (early validation), and/or
- secure additional grants or successfully fundraise to continue growing.
Medium term (2 years) the investment should achieve 25% IRR (unrealised)
4. Anchoring in Abritrum through early onchain activity
To incentivise retention of the projects in the Arbitrum ecosystem, generate early onchain activity, and provide opportunities for project contributors to gain ownership in the projects, the program will support projects in implementing an onchain system to track contributions with points (non-transferable ERC-20s).
The methodology is based on sweat equity and leverages CollabBerry.xyz (project incubated in the Arbitrum Co.Lab Fellowship and later funded by Arbitrum’s Questbook program to develop an MVP).
5. Implementation Plan - Budget
The budget is divided in 4 categories:
Capital Investment into the projects: direct capital allocation to the teams.
Venture Support: hands-on support and mentorship given to the projects.
Early onchain functionality (CollabBerry grant)
Program Ops & Comms: creation of monthly program reports to the DAO & delegates stakeholder management, amplification and marketing support for projects (including recruitment/team matchmaking support and marketing strategy workshop), program branding and promotion of Arbitrum as a great home for builders, program management and overhead, and incentives for interview participants in phase 1.
Total Program Cost: $416,530
Arbitrum Budget Contribution: $213,780
- Capital Investment into projects $124k
- Early onchain functionality $30k
- Program Ops & Comms $60,780k
RnDAO Budget Contribution: $206,250
- Venture Support: $180k
- Program Ops & Comms $26,250
6. Funds Management & Payment Schedule
The funds provided by ArbitrumDAO will be transferred to the Arbitrum MSS.
The funds are then transferred in two phases and to three separate groups for easy auditing
RnDAO multisig for Capital deployment into projects
RnDAO multisig for Program Ops & Comms
CollabBerry multisig (Early onchain functionality)
Phase 1: $103,000
Capital deployment into projects $48k
Program Ops & Comms $35k
Early onchain functionality $20k
Phase 2 (upon completion of Phase 1): $111,780
Capital deployment into projects $76k
Program Ops & Comms $25,780
Early onchain functionality $10k
