Polychain Accuses Ex-Partner of $13M Secret Token Deal with Eclipse Labs

Polychain Capital has accused its former general partner, Niraj Pant, of violating company policies by secretly securing a token deal with Eclipse Labs, a startup in which Polychain had invested

Web3 venture capital firm Polychain Capital has accused its former general partner Niraj Pant of violating company policies by secretly securing a token deal with Eclipse Labs, a startup in which Polychain had invested.

Pant allegedly arranged to receive a 5% token stake, later reduced to 1.3%, in the startup, which was valued at $270 million in its last funding round and is developing a decentralized Web3 social network. The tokens were set to be valued at $13 million based on the last funding round price.

The arrangement was made with Neel Somani of Eclipse Labs shortly after Pant led Polychain’s $6 million pre-seed funding round for the startup in early 2022, according to a person familiar with the matter. Pant was also given the option to purchase tokens at a 50% discount.

The incident highlights ongoing concerns within the crypto industry regarding undisclosed advisory roles and token deals. Several crypto VCs have been accused of engaging in undisclosed token deals or advisory roles, which could potentially create conflicts of interest.

In addition to the alleged token deal, Polychain also invests in Pant’s AI startup, which is developing a large language model.

Pant left Polychain in November 2022 after about four years at the firm. He joined Polychain in 2018 from Bain Capital, where he was a vice president in the private equity group.

At Polychain, Pant was involved in several key deals, including the firm’s early investment in decentralized exchange Uniswap, which was later valued at $1.7 billion in a Series B funding round.

Pant did not immediately respond to a request for comment. A Polychain spokesperson declined to comment.