Revealing the 'shady secret” of project financing: Former Polychain partner Niraj Pant secretly received 'facilitation fees” from Eclipse Labs

Author: Sam Kessler

Compiled by: DeThings

Editor’s Note: Niraj Pant, a former general partner at a top crypto venture capital firm, has struck a deal with portfolio company Eclipse Labs The secret agreement, but with a vague timeline, caused some controversy. The incident has raised concerns about potential conflicts of interest and ethical standards in the venture capital industry, highlighting the complex relationship between investors and startups.

• Polychain said its former general partner Niraj Pant entered into a secret agreement with portfolio company Eclipse Labs that violated the fund’s policies.

• An investigation by CoinDesk revealed that former Eclipse Labs CEO Neel Somani pledged to Pant to hold $13.3 million worth of Eclipse tokens.

• According to sources at Eclipse, Somani promised these tokens as an incentive for Pant to receive Polychain funding.

• Polychain said Pant did not disclose the transaction to the fund. Later, it invested in Pant’s artificial intelligence startup Ritual.

• Pant confirmed that Eclipse Labs allocated him “advisor” tokens, but said that he did not reach an agreement with the company until after Polychain’s investment.

• The situation offers a glimpse into the typically shady dealings of the crypto industry funding scene, where venture capital firms invest in projects and investments in exchange for tokens rather than traditional equity.

Crypto venture capital giant Polychain has accused former employee Niraj Pant of striking a behind-the-scenes deal with portfolio company Eclipse Labs that violated the fund’s policies.

Former Eclipse Labs CEO Neel Somani quietly allocated 5% of the upcoming Eclipse crypto token to Pant in September 2022 - according to three people familiar with the matter and internal Eclipse documents reviewed by CoinDesk. This comes days after Pant directed Polychain to lead the company's $6 million pre-seed funding round.

The allocation was ultimately reduced to 1.33%, worth $13.3 million, based on the token’s most recent fully diluted valuation in a private investment round. (According to a source close to Eclipse Labs, the company’s latest funding round values ​​the token at a fully diluted value (FDV) of $1 billion.

Polychain is powered by cryptocurrency exchange Coinbase Founded by Olaf Carlson-Wee (first employee), one of the largest and best-known cryptocurrency venture capital firms with over $11 billion in assets under management. Pant served as the firm's general partner from 2017 to 2023. , responsible for channeling the company’s venture capital into promising crypto startups

.

Pant has since become a prominent figure in the crypto industry and currently serves as co-founder of blockchain AI startup Ritual, another Polychain portfolio investment.

Eclipse Labs built a blockchain that mixes technology from the popular Solana and Ethereum networks. After leading Eclipse’s pre-seed round in August 2022, Polychain participated in a $50 million Series A round in March 2024.

Pant spearheaded the pre-seed deal, and a CoinDesk investigation revealed that around the same time, he was allocating as many Eclipse crypto tokens as Polychain itself. According to CoinDesk’s sources, the deal was not disclosed to most of Eclipse’s executives, advisors or large investors.

Pant insists that the arrangement is entirely kosher, as it will not be finalized until September 2022, a month after Polychain has already invested in Eclipse. He shared legal documents with CoinDesk showing his "advisory" allocation to Eclipse tokens was revised to 1.33% in 2024, but declined to comment on the size of his initial stake, or why it was changed.

Polychain told CoinDesk it was not aware of Pant’s financial stake in Eclipse until after Pant left the company in 2023. The fund said he should have disclosed the deal in accordance with its policies, which are designed to protect companies and their investors from conflicts of interest.

“Polychain was not aware of the financial relationship between Eclipse and Niraj Pant until after Niraj Pant left the company,” a Polychain spokesperson said in an email to CoinDesk. “Polychain has robust policies and procedures for employees in advisory roles. After Mr. Pant left Polychain, the company became aware that he violated its policies and investigated the matter.

Polychain’s statement to CoinDesk provides an update on crypto A rare insight into the sausage-making process in the cozy world of VCs and the projects they fund. VCs rarely publicly discuss personnel matters or deal structures, and Polychain didn’t publicly disclose Pant’s policy violations until CoinDesk reported on it.

Blurred Timeline

The revelation could deepen the controversial narrative surrounding Somani, who resigned as Eclipse CEO in May amid sexual misconduct allegations, which he denied. , and declined to comment on the matter.

Two unnamed sources close to Eclipse claim that Somani promised Pant his 5% advisory stake in Eclipse tokens before the pre-seed deal was completed.

According to documents reviewed by CoinDesk, Pant’s stake is higher than that of any Eclipse investor except Polychain, which also accounts for 5% of Eclipse tokens. Shares of all Eclipse employees except the CEO

Somani told his inner circle that the generous token grant was intended to incentivize Pant to acquire Polychain’s cash and the senior A coveted endorsement for VCs.

According to Polychain officials, the arrangement was not disclosed to the VCs or their limited partners at the time.

Tokens, Not Equity

This time also gives us a glimpse into the cryptocurrency industry’s unique fundraising practices, with digital tokens typically being awarded alongside, or in lieu of, any equity. Blockchain applications, digital assets, and decentralized ledgers are often promoted as more transparent alternatives to traditional finance, but the ownership structures of many leading projects and cryptocurrencies remain opaque.

Eclipse Labs has built a layer 2 blockchain to provide users with a faster and cheaper way to transact on the Ethereum network. The network’s main appeal is that it borrows elements from the popular Solana blockchain to power key elements of its technical design — a detail that has helped it generate buzz among two of the largest blockchain communities.

In Eclipse’s financing, token allocation is crucial because few investors get equity in the project. Most people were simply promised a piece of Eclipse’s tokens—a cryptocurrency that didn’t exist yet and that Eclipse hadn’t even announced publicly.

This setup is not atypical. Cryptocurrency investors often offer cash in exchange for tokens rather than traditional equity, and companies rarely disclose these arrangements to the public lest they provide ammunition to financial regulators in the fight to classify cryptocurrencies as investment securities.

“Eclipse Labs does not disclose investor ownership percentages to the public,” an Eclipse Labs spokesperson told CoinDesk.

Eclipse employees, investors and advisors have received nearly 50% of the future Eclipse token supply, according to an internal token allocation table reviewed by CoinDesk.

Pant insists that his own consulting agreement with Eclipse is above board. He shared legal documents with CoinDesk showing that he will receive a 1.33% stake in Eclipse tokens.

Excerpted from the revised consulting agreement provided by Niraj Pant

This amount - revised from an earlier total that Pant did not disclose - is lower than Pant's according to documents and people familiar with the matter That's 5% of the original commitment, but that's still higher than every other Eclipse advisor and nearly all investors and employees.

The consulting agreement shared by Pant is dated April 29, 2024 — after his departure from Polychain — and signed by two parties: Neel Somani, on behalf of Eclipse Labs; and Niraj Pant, on behalf of “The Psychological Operations Co.”

Excerpted from the Revised Consultancy Agreement provided by Niraj Pant, signed by Pant and Neel Somani

根據協議，Psychological Operations Co.將獲得Eclipse代幣的贈款，以換取Eclipse要求的「定期電話會議同步會議」。協議本身沒有提到Polychain或其對Eclipse的種子前投資。

Pant 提供給CoinDesk 的協議版本指出，這是對2022 年9 月8 日早期諮詢協議的「修訂」——就在Eclipse 的種子前輪融資結束幾週後，當時他仍然是Polychain 的普通合夥人。

潘特拒絕分享最初的協議。

Polychain的政策

無論Pant的顧問職位是否在種子前交易之前完成，如果他在Eclipse的最初顧問職位是在他仍在Polychain工作時開始的——正如他自己的文件所證明的那樣——那麼他可能仍然需要根據公司的道德政策披露這一點，該公司在向美國證券交易委員會（SEC）的冗長披露中對此進行了描述。

Polychain執行長Olaf Carlson-Wee（Danny Nelson / CoinDesk）

在提交給美國證券交易委員會的官方政策文件中，Polyin寫道：為了監控任何衝突Polychain員工必須預先清除其個人帳戶中的某些預期交易，這些交易可能會出現不當行為，並且必須首次和每年披露所有個人帳戶的持股情況，以及每季度披露所有交易。情況尤其引人注目，因為Pant不僅是Polychain的前僱員，還是Polychain最熱門的投資組合公司之一Ritual的聯合創始人。產業演講者的主要成員，被視為加密和人工智慧交叉領域的思想領袖。投資的寵兒。就知道了這一違規行為。在Eclipse 的股份價值成長了10 倍。

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