I agree with @alchemydc (and also @ttmariemia and @mlphresearch in previous discussions) that MGRC should be able to make mission-directed investments that have an equity or profit/revenue-sharing component. That is, make payments that are not outright grants conditioned just on execution, but also include “pay us back if you make money out of this” terms, to projects within MGRC’s mission and scope.
This has several benefits.
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First, it provides a potential path to replenishing the MG funds and making them sustainable in the long term, rather than going back to the community hat-in-hand in 2024 and asking for extension of the in-protocol reward allocation.
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Second, it levels the playing field between projects that produce public goods that cannot be monetized, versus projects that be monetized. It makes sense to award outright grants to the former, while capturing some of the latters’ profits and redirecting them to future public goods. The alternatives are bad: either just avoid funding some valuable projects because they could turn out profitable (this demand did come up in the context of ZF grants!), or allow such projects to capture value without giving back.
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Third, it opens the door to the powerful blended funding models, where the MGRC would be part of a larger pool of investors, or even in explicit collaboration with VCs. MGRC can provide the domain expertise and sweeten the financial terms, thus attracting (potentially much larger) investment capital. Leveraging domain expertise and a nonprofit pool fund to attain much larger impact via for-profit investments is model used in other contexts, such as developing world investments.
The caveats I see are:
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MGRC should still give high priority to non-profitable public-goods projects that have high impact. It should not be tempted by the narrative that for-profit projects are always better because they can fund greater future impact.
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Profit/revenue-sharing arrangements can be difficult and distracting to set up, especially in the blockchain arena where business models may be fluid and weird.
Note that this is quite similar to or @ericmeltzer’s Zcash Ecosystem Fund, except that we are explicitly encouraging also funding of public-goods project with no prospect of turning investment profits. It’s also reminiscent of “green energy” investment funds and the like, but reversing the priorities: instead of serving investors who have an ideological bend, it’s about serving idealists with a penchant for sustainability and impact.
As for whether this is permitted by ZIP 1014… I think yes, though unfortunately this isn’t crisply specified. My proposed ZIP 1012 did include language in this spirit:
ZF may award grants as profit-sharing contracts, in which case any resulting profits will be added to the ZF-GU slice (to fund its ongoing operations and any future grants).
The revision from ZIP 1012 to ZIP 1014 removed that paragraph (I don’t know why), but did not contradict it. I’m comfortable with the interpretation that this is still allowed, and the removed paragraph was just overly specific.