Authors: Commodore & Flex Chapman

Table of Contents

1. Summary + Primary Goals
2. Proposal
3. LOI Progress
4. Plans
5. Retrospective

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1. Summary

Commodore & Flex Chapman are requesting to renew their full-time charter. We've made incredible progress in our most important pursuit of securing a LOI with a NBA team. We received a verbal from the runner-up bidding group in the Suns sales process. We're now in deep conversations with another ownership group who sees the value in our value proposition & our vision to work with them.

We intend to try to close a deal with the ownership group & execute the details determined by their counsel, our counsel, and the NBA's counsel.

In the event the current conversations fall through or stall, we'll turn our attention to a second ownership group that we have a path to. We'd like time to be able to explore both of these avenues (close + execute w/ current or run process on next group).

Primary Goals

• Execute a letter of intent for a minority position of an NBA team [LOI] (very hard)
• Pitch more NBA owners (hard)
• Execute a treasury diversification (hard)
• Capitalize on meaningful partnership opportunities (hard)
• Operate core functions of the DAO [legal, financial, community, growth, etc] (normal)

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2. Proposal

• A monthly budget of $33,334 USDC
• Paid monthly
• 8 months starting (in arrears) May 1, 2023, ending December 31st, 2023. Intention of 8 months is enough time to work our process on a backup team + a clean end of the year duration.
• Contributors' stream can be cancelled at any point by the DAO via proposal, at which point future payments will cease (prorated to the day stream is cancelled).
• We must retain 100% of our airdropped allocation of $KRAUSE balances for 2 years (as of Jan 1st, 2022) or until no longer being compensated as a full-time contributor.

Monthly Spend

| Name | $USDC | $KRAUSE | | --- | --- | --- | | Commodore | 16,667 | 0 | | Flex Chapman | 16,667 | 0 | | Total | 33,334 | 0 |

Commodore Wallet: thycommodore.eth Flex Chapman Wallet: flexchapman.eth

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3. LOI Progress

We are currently in deep conversations with a NBA team attempting to close a LOI. This is the 2nd time we've been close with an ownership group (specifically the Suns leading bidding group). Our pitch is resonating. Our networking is getting us infront of owners (5 ownership groups to date). We're delivering compelling pitches.

This is a matter of when, not if.

4. Plans

1. What are our plans for the DAO?
2. What’s our plan for DAO finances?
3. How can we improve transparency for the LOI work?

What are our plans?

1. Secure a Letter of Intent: Securing a minority position in an NBA team is the next major step in our mission. In addition, this helps plant the seeds for objective (2) and (3). This requires cultivating relationships with NBA teams and aggressive networking by this team.
2. Raise for KH Capital: Work with KH Capital to close a $100m+ PE Fund. Ownership positions in sports clubs will exist within a fully KYC’d, regulatory compliant entity as ideally a sub-DAO. KH Capital provides us the ability to structure a legal entity that sports clubs can interact with legally & compliantly, while KH Capital delegates access + governance to Krause House where allowed. Additionally, this gives us negotiation leverage to verbally commit to large sums of capital without knowing KH members’ appetite due to KH Capital being able to backfill any remaining allocation. Note: Closing a LOI with a NBA team is a massive accelerant to getting this fund closed.
3. Community Engagement: Our community & our ability to organically build new communities (OTE as an example) is a superpower. Sports leagues & clubs are interested in ways to partner with us. This can serve as a path to earn equity from other sports clubs as well as generate revenue.

What’s our plan for the DAO treasury?

At this moment, we have roughly $855k our Mainnet and Polygon treasuries. We believe that we should continue on course. Our biggest & most important goal of delivery a LOI feels within our grasp. If we can secure a LOI with a team, our future drastically improves as paths for monetization, treasury diversification, etc open up significantly. As voters, we're targeting a ~$75k stablecoin/mo burn to continue to drive our core theme of credibility building.

How can we improve transparency for the LOI work?

We've tried our best to maintain a balance of transparency without risking details that could sink a deal or violate any signed NDAs. This is by far one of our biggest challenges pursuing this mission as a DAO. We want to increase the transparency in this process by creating a larger group that we're "full kimono" with.

Dubbed the “LOI Transparency Committee”, we’ll establish a group of 5 additional tokenholders (including the 2 now: Lewwwk & Mario) to be updated twice per month of details including:

• Which NBA teams we’re engaged with
• The owners / executives / representatives we’re engaged with
• High-level summaries of each material interaction

Each new member of the LOI Transparency Committee will need to execute a doxx’d NDA with Krause House Capital. For reference, the Krause House Capital entity is US-based and therefore more enforceable for any breaches.

The LOI Transparency Committee will be established & a first disclosure of status will be made within 45 days upon passing of this proposal. Each member of the committee must be nominated by either Flex or Commodore, the tokenholders will vote to determine their desired members.

In the event that a LOI Transparency Committee is not established & the first disclosure has not occurred within 45 days upon the passing of this proposal, this workstream will be cancelled effective immediately. In the event that an elected member refuses to execute their NDA within 7 days, they will be removed from the LOI Transparency Committee.

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5. Retrospective

Commodore

Highlights

• Used surprise Suns sale to drive awareness of our mission to multiple ownership bidding groups to lay foundation for future deals.
• Networked to leading bidding group (at the time) for the Suns sale, worked our way to securing a verbal to join the ownership group. Maintaining relationship to partner in future deals.
• Initiated KH Phillippines TikTok strategy after several attempts to inspire other Jerrys to step up & experiment. Early results have been tremendous.
• Took the feedback from last term & significantly increased my vocal leadership.

Learnings

• Take advantage of press cycles to get into narrative + deal flow.
• Local native content on TikTok as a strategy seemingly works.
• Interesting soccer ownership opportunities around the world, worth exploring KH expanding into soccer.

Improvements

• Being more transparent, as a voter, of my financial strategy for budget/burn/runway.
• Finding ways to better engage the community as a collective.
• Be more proactive in having difficult conversations with Jerrys.

Flex

Highlights

• Leveraged personal & professional connection to secure an IRL meeting with a majority owner in the NBA.
• Developed and executed pitch strategy for multiple prospective ownership groups which resulted in a verbal offer to join a bid for the sale of the Phoenix Suns.
• Closed premier partnership with Overtime and Overtime Elite resulting in first revenue generating project for the DAO.

Learnings

• Increasing feedback around expansion into other sports & leagues around the world.
• Gathered insights from several hours of meetings with front office, current and prospective owners. Subsequently published findings for public consumption.
• Bottoms-up initiatives such as court refurbishments, localized content creation, and digital community management all have the highest level leverage. Owners, regardless of sport, are very interested in our success across these types of projects.

Improvements

• Received feedback to exude more leadership in public forums rather than just in small tactical groups.
• Involve more high value members in discussions and dialogue directly relating to NBA ownership conversations.
• Leverage creative and storytelling abilities to accelerate growth of the Krause House brand.