Businesses that run only in fiat benefit from established structures. Integrating a bank account, debit or credit cards, Quickbooks or Xero, and Justworks, Gusto, or Deel can support your needs as the business grows. However, behind these established structures is a fragmented system, stitched together by third parties who gatekeep access by requiring that you trust them entirely with your money and your data, and also pay them lots of money over time.

Crypto and blockchain technologies present an opportunity to design systems with fewer gatekeepers. But, running operations in crypto is complex. I’ve spoken to over a hundred operators about their experiences and it’s clear that we’re all improvising solutions for more or less the same problems. At the same time, I can see some best practices emerging from the chaos.

If I were COO of your crypto team, I’d tell you…

Here are some questions to help you plan.

• How should we custody our crypto?

• How do we reduce overhead and fees of making payments?

• How do we track and process payment requests, expense reimbursements, etc?

• How do we track spend, analyze burn, and create budgets?

• How do we get the information we need to make decisions?

Here’s a general 10-step framework for setting up your business infrastructure.

1) Create and fund a team multisig

• Set multisig owners as a mix of founders, executives, operators

• Set required signatures as 2/N; ask multisig owners to use new addresses for the multisig

• Note: increasing the number of required signers better protects against exploits, but it also means coordinating with more parties

2) Fund new wallet(s) that will only be used for paying gas fees of team multisig

• Separate team activities from personal activities

• Designate person (or people) to execute transactions with their funded gas wallets

3) Follow and communicate a standard payments schedule

• Ex. on the 15th and 30th each month

• Set clear operational policies and permissions around who can initiate, sign, and execute transactions from which wallets, and for what purposes

4) Send batch payments through the multisig

• Save time, effort, and gas by sending payments for outstanding obligations in one batch transaction vs one-by-one

5) Track all payments from the multisig and gas accounts in one place

• Keep documentation (invoices, receipts) that enrich spend history and audit trail; this makes the world’s difference if and when working with accounting and tax professionals

6) Make it easy to collaborate and delegate

• Share context with partners and associates; focus on high-impact work

• For example, you can delegate adding context to transaction data; once it’s ready, you can review actual vs budgeted spend and adjust next period’s budget accordingly

7) Review burn, balances, and runway biweekly

• Review spend-by-category breakdown and make any necessary adjustments

• Following a standard payments schedule (step 3) with less frequent payment dates helps keep this process manageable

8) Process payment requests and expense reimbursements via a dedicated channel

• Give people a clear, easy to follow process for how pay and get paid

• Make it impossible to miss, lose, or forget requests

9) Track upcoming payment obligations and project spend

• Schedule known upcoming payment obligations to project spend

• If the startup is >20 people and has sub-teams, I might recommend that each sub-team have their own multisig, funded quarterly by the main treasury multisig

10) Work with experts on hard questions sooner rather than later

• Identify experts who understand the business and the business’ goals; avoid soliciting too many opinions as they can be conflicting

• Communicate risk profile, understand considerations, then decide a path forward

• Example questions you might have:

  • How do I hire and pay people who live in different countries? Can they be be paid in fiat, crypto, or both?

  • How should I think about global entity structure, taxes, and where IP or contracts are associated?

  • How do I handle crypto accounting and tax?

This framework is intended as a starting point for crypto businesses with one legal entity (or equivalent structure). If your crypto business has multiple entities, you may consider applying this framework at each entity with a clear delineation of activities per and between. Proper handling of and accounting for intercompany transactions requires forethought, documentation, and attention to detail. If the entities are in different jurisdictions, each one will have its own set of rules, requirements, and timelines to follow as well.

Managing crypto business infrastructure is demanding. Making this easier removes growth bottlenecks.

web3 is full of experiments, in technology and also in how humans collaborate and do business. Managing crypto business infrastructure is demanding because the playbook is nascent. By default, you’re a pioneer for web3 organizations. Not only are you balancing all the aspects of running a business, but you're also navigating a tension between the status quo vs. the disruptive prospect of sovereign individuals; there’s even more to dig into when your business runs in both crypto and fiat.

Growing the crypto industry and attracting more talent, ideas, and innovation necessitates business infrastructure that can support that growth, rather than bottleneck it. We can all accelerate its development by having open conversations and sharing mistakes made, lessons learned, and best practices.

We can also build tools that make running crypto businesses much easier. Without proper tools, it takes many organized spreadsheets, perfect record-keeping, constant communication, and superhuman cat-herding abilities. There are many incredible pioneers who do this for teams today. It’s possible, and it’s also difficult, stressful, and manual.

I’m building domo.so which automates and simplifies crypto business infrastructure, including the 10-step framework, and is indispensable to teams using our private alpha.

At domo, we use domo too. The app expresses what we wish we had when starting out as crypto operators, and also what we wish for today!

Feel free to email me or dm me on Twitter with questions, ideas, requests. If you’re looking for a dedicated COO, operations manager, or similar for your business, I’m happy discuss how I, domo, or awesome people from my network can help.

Hi, I’m Grace! I’m an executive operator who’s set up and scaled several startups, including web3 projects and a venture studio. I’m currently co-founder & ceo of domo.

Thank you Sol, Ryan, Thazin, Amber, Yi, Winston, Remy for your review and feedback.