Input Requested: NEM Ventures Annual Community Update Report

DaveH · October 3, 2019, 1:52pm

This posted in my personal capacity, nothing to do with NEM Migration Committee Input

Dear NEM Community

As we mentioned on Twitter recently (https://mobile.twitter.com/NemVentures/status/1172045990657953792) it has been a year since the NEM Community voted to formalise the NCF into an investment arm for the ecosystem and we have had the privilege (and challenge) of making that a reality on your behalf, legally starting in Dec 2018.

Part of the reporting we suggested in the proposal was to create a publicly available Annual Community Update Report, to assist with transparency and good governance. Our first year comes to a close in Dec 2019 legally so that is when accounts etc are drawn up, audited, etc. That is also the logical time create such a report. We have been giving regular updates on the forum as we go and hopefully they have been informative, this is more of an annual summary of it all with some additional detail in certain areas,

We are starting to prepare the report now and would like feedback on what you would like to see included. We cannot guarantee to fulfil every request (depends a bit of what is asked for and commercial arrangements in place) but we will try our best.

At present we plan to include:

Reminder of what NV is, why it is here and what we see for the near future
Major events since inception
Summary of investments made to date and where you can see company progress
Headline KPI figures for numbers of proposals assessed, attracted, in flight etc
An overview of how we have tracked against the proposed operating budget
Insight into how we have managed xem liquidation to protect the price
Section on the team and who is doing what
Introduction to some of our key partners, how they have and will continue to be involved
What we are planning for next year
Summary of our audited accounts

We want to give as much transparency and insight into the workings of the company while making sure it is also relevant and easy to digest. We have a small and dedicated team who have limited capacity due to keeping the headcount as lean as practical. We have no full time marketing or comms function so we largely apply common sense and want to validate that with the community in order to ensure we focus our energy in the most useful way reporting wise. Do please let us know in the comments if there is anything else you would like to see and we will try our best.

Timing wise – depending on how long accounts take to finalise, its likely to come out Q1 2020 at this stage but subject to everything else that is going on with Catapult at that time, we will revisit the exact timing near the end of the year.

As an aside, for those smaller, upcoming startups this is a healthy governance practice to set up gebnerally and a legal requirement once you get a certain size (for private and public companies). It is something all companies should get into the practice of as they grow, especially if audited accounts need to be filed with a regulator such as NEM Foundation did recently with the Singapore company register.

Thanks and regards

NEM Ventures Team

corporal_clegg · October 7, 2019, 10:39am

Very quiet here so I will get this started:

Just off the top of my head here now, NEM Ventures asked for 800k in costs to manage 2million worth of investment both annually. As far as I can tell, the investment fell far short of the target. Did costs also fall short of the target? What is being done to address the lack of investable projects and also to keep costs down during this “startup” phase of NEMv.

I can anticipate answers to some of these questions, but they should be included in the report. Particularly in regards to cost. The hiring process of the Nem entities was never competitive. This should make the community rightly concerned about overpaying for whatever they get. The annual report should alleviate this concern.

Xpedite · October 8, 2019, 9:29pm

Would you be open to accept a community appointed ( competent ) person that gets full disclosure to the accounting ?
Just to be clear I’m excluding myself from this for various reasons
I think it should be acceptable and would suggest the same for all entities that receive funds ( NEM Foundation , NEM studios,…? ).

I assume we have a competent accountant of auditor somewhere in our community that could be up for this with a small compensation for the effort.

Obviously privacy should be warranted but this community appointed auditor should have the right to report about anomalies as long as it’s de-identified information.

I’m open to discussion about this.

GodTanu · October 10, 2019, 4:18pm

I have doubts about the existence of NEM ventures.
At the moment it has not brought anything to the community. It’s just XEM selling pressure.

Financial reports, results announcements, and await reports on what has been returned to the community.

DaveH · October 11, 2019, 11:37am

Thanks @corporal_clegg for kicking things off. Definitely can (and will) include commentary on these in the report, completely hear you on alleviating the concern and will try and ensure it is addressed in the published report.

Bear in the mind the $10m wasn’t a target, it was a maximum investment amount for the year. There are still deals that will be announced before the financial year end in 3 months, at this stage it is likely to fall short of the maximum and will be carried into next year.

In terms of costs, they are currently under budget; an explanation will be given in the report on that as well - some of them are fixed, based on there being a set amount of work and expense for setting this kind of operation up and keeping it running. Some have been delayed as operationally we didn’t need them as early as expected or have been scaled down due to the wider crypto market.

Investable projects flow - we will cover in the report, we have been trying several angles here, some working, some not and have further ideas or year 2 now we are coming out of startup mode and catapult is launching

DaveH · October 11, 2019, 11:45am

Thanks @GodTanu, we will ensure the value that has been brought to the community is highlighted in the report and try to do so in the regular updates. Do please let us know if there is anything specific you would like including that would help clarify those doubts

In terms of selling pressure - this is actively managed and minimised where possible, but yes, unfortunately the nature of funding ecosystem entities from reserved funding pools does necessitate the selling of those assets to invest into the ecosystem. Had they been sold/diversified into other currencies and held in treasury during the bull run the ecosystem would be in a stronger position generally and we have started to try and actively set that up.

A trading desk with professional and experienced traders has been set up to try and minimise this and avoid sell pressure where it cannot be sustained. Similarly OTC relationships have been put in place to try and keep it off the markets if possible; naturally there are limits for what can be achieved with this in a bear market but we are trying to ensure the ecosystem has a more mature fiscal approach going forward in general because we recognise the missed opportunities that happened over the past few years.

DaveH · October 11, 2019, 12:02pm

Thanks Kristof, good to see you back active again, hope Fullblock is going well and to catch up soon.

Would you be open to accept a community appointed ( competent ) person that gets full disclosure to the accounting ?

This is already in place, it was in the proposal the community voted on, section is here

In terms of Community appointed representatives, no, at this stage the structure is working well as per the proposal. There are various long standing members of the community that are part of the governance structure above NEM Ventures as nominated by the Core Team. We laid out the process for this in the proposal prior to it being voted on and will run as per the proposal for the first year or two at least to see how it works, we will keep an eye and revisit as needed though.

I think it should be acceptable and would suggest the same for all entities that receive funds ( NEM Foundation , NEM studios,…? ).

I will leave this to the other entities to consider themselves, not one for NV to comment on.

I assume we have a competent accountant of auditor somewhere in our community that could be up for this with a small compensation for the effort.

We have a certified and registered auditor in Gibraltar that will be performing this and the audited accounts will be disclosed publicly as was always the plan, they will published with the report (or as soon as practically possible after if they take too long to prepare, rather than delaying the report)