Let's assume you are a holder of the DAO tokens. The basically represent

ownership of some of the ETH stored in the DAO's "vault" and allow you

to profit from startups that raised money from the DAO. So you are

exposed to ETH with very little chance to liquidate your DAO to ETH

(they are not really locked away but it seems to be not very easy to get

back all of them). Anyway, you have exposure to ETH and I bet that most

people that "invested" into the DAO are still long on ETH.

Now, a new startup seeks funding through the DAO. That startup initially

has real costs from labor, infrastructure, or whatever that they need to

pay in fiat. Since the DAO can only pay their "partners" in ETH (because

that's all they have), the partner will need to sell ETH to get fait.

Now, ask yourself this question: Why would I want to give a startup ETH

so that they can sell them, depress the ETH price and build a company

WHILE I am still long on ETH?

While the idea may work well for small projects (i.e. a couple k$), I

don't see how this could ever work for something that asks for a couple

M$.

What are the more than $100M worth of funding worth if they can't use

them? That money is stuck I personally don't see how any rational (i.e.

greedy) individual would ever approve the funding of a company/idea that

needs to pay their stuff in fiat?! Can you?