Primer: This document is a starting point for a legal set-up for strategic initiatives that require Arbitrum DAO to hold equity. The ideal outcome would for us to find one common legal structure that enables all of these initiatives. The Arbitrum Foundation has offered support to use their legal counsel / lawyers to vet the conceptual solutions brought forward.

Below you will find a draft of an entity structure for the DAO M&A working group.

Initiatives that would benefit from a clear legal umbrella are, amongst others:

1. Passive VC LPing
2. Co-investing or direct investment
3. Funding incubators
4. DAO M&A
5. Active provisioning of liquidity as capital in the ecosystem

⁉️ Key questions for the Arbitrum M&A Working Group

1. Legal: Who holds the acquired assets legally? How does M&A work for a DAO work in a legally compliant manner?

2. Management: Who manages acquired companies / how to avoid DAO frictions / do we need a board? What role does the foundation play? How are stakeholders engaged?

3. Strategy / Target Selection: How do we pick targets? How do we determine strategic priorities for target selection?

🎯 Scope

Day-1 Solution for Key Questions

This is a conceptual day-1 solution that needs to be tested with lawyers.

• 1. Entity Ownership: Who holds the assets legally? / 2. Entity Management: Who manages the assets?
• 3. Entity Oversight: Who oversees management of assets?
• 4. Target Selection: Who picks the targets and how should the DAO be involved?
• 5. Transparency: How can we equip the DAO with enough information to make decisions if there are NDAs or other factors that may not be transparent for legal / business reasons? / If we had an advocate(s), how would the DAO know enough about the data or decisions to even know how to make a decision?
• 6. Role of Foundation: What is the Foundation’s role?