Orb Collective 3-Month Financial Update

[immutbl]

Now that we’ve had a chance to analyze the numbers, I’d like to give the community an overview of Orb Collective’s spending over its first 3 months of operations (Aug- Oct 2022), compared to its budget.

As the largest service provider to Balancer DAO with the most areas of responsibility and team members, Orb accounts for the highest cost on the DAO’s balance sheet. In light of the DAO’s deficit between revenue and expenses and the bear market we find ourselves in, Orb Collective has been taking the following measures to reduce its financial footprint, and improve efficiency in the Balancer ecosystem beyond Orb, without losing its ability to drive growth for the Balancer protocol.

• Reducing existing headcount
• Revising hiring plans
• Slashing the marketing budget
• Cutting team expenses wherever possible
• Taking a conservative approach to all team spending
• Finding inefficiencies in the ecosystem and developing cost-saving solutions

Through these efforts, we’ve managed to cut almost 1/3 of our budget, underspending our allotted budget by 31% during our first 3 months of operations, saving $350,865. We’re taking this opportunity to bolster the treasury by voluntarily forgoing our December funding ($291,238) that is due from the Balancer OpCo. We will also revise our budget forecast for Q1 2023 based on the cost reductions we have made and our revised growth plans.

Overview:
3 month budget: $1,123,271 USDC
3 month spend: $790,993 USDC
% under budget: 31%
Money saved: $350,865

Next steps:

• Orb Collective is coordinating with the Balancer OpCo to cancel its December 2022 funding payment
• We will use the cash we’ve saved to cover our expenses for the next month
• Once we can analyze the numbers for November, we will develop a revised budget forecast for Q1 2023 that reduces Balancer’s financial load and keeps more stable funds in the treasury

There are also notable recent cost reductions that are not yet reflected in this report:

• Net headcount reduction of 2 (1 addition, 3 subtractions)
• Halting of recruiting activity

Thank you to the community for trusting us to be good stewards of capital.

[ZenDragon]

Really appreciate the consistent transparency from Orb and the nonstop effort to appease any parts of the community concerned with spending. To see the tangible progress made in such a short period of time is impressive. Thanks for making the tough decisions to make this possible.

[Xeonus]

Thanks so much for the transparency. As many of you know I am a strong proponent optimizing costs for the DAO wherever possible given the current market conditions. It is exemplary of Orb how they not only stayed within their budget but also saved a significant amount of money. People should be fully aware that the decisions behind these numbers must have been very hard and I sincerely hope there will be better times ahead to fund service providers like Orb in the long run.

[ReptilePresidente]

Quick question on the department spends, is that basically the spend on salaries for the people employed in each department plus other costs? So say for example department spend for marketing would be 4x salaries + marketing costs like organising conferences, paid newsletter and what not for a total of $130,536? Just to make sure I am interpreting it correctly.

If partnerships has 0 actual headcount, but it has $55k spent, how do I interpret this?

Thanks for transparency

[Bobbay_StableLab]

This is a very appreciated move to be more conservative with your spending and aim to play the long-term. We appreciate the consistent updates and transparency in regard to your spending, especially with the return of funds to the DAO.

This is a great example of what we should expect from service providers.

[immutbl]

Department spend includes all costs coming out of Orb’s budget for that department including FTEs, contractors, payroll taxes, token distribution taxes, etc.

This report covers 3 months from the start of August through the end of October. We released our 2 partnerships team members at the end of October, so the headcount was technically zero at that moment for the department, however they were employed and paid throughout the period in the report, so their costs are reflected.

[0xEvan]

Why did you spend 0 on legal and insurance? Are these considered routine expenditures or one time costs? For example were you expecting to pay 10k/month for these line items throughout the quarter? Or is up to 10k reserved for unexpected expenditures related to legal and insurance that happen on an irregular basis?

[immutbl]

Legal = outside legal costs. It is an expense that could arise at anytime and did not arise during the first 3 months, therefore we did not spend any of those funds.

Insurance = we had not secured insurance during the first 3 months, therefore we did not spend any of those funds.

[immutbl]

To clarify discrepancies in the original update, I’m sharing a corrected version below: