The equivalent of $120 million in digital currency has been raised by an automated business run on computer code, with no human input beyond its anonymous backers.

The vehicle, called The DAO, in an embodiment of an advanced idea which are automatic companies that operate without managers or boards of directors, making them the purest form of shareholder governance. The financial support for the vehicle has caught the fancy of idealists who have long idealized the idea.

Set up primarily to invest in other business making it a form of investor-directed venture capital fund, the DAO — an acronym of decentralised autonomous organisation, the name given to such entities.

“There are no humans controlling it, it’s just the code. There is no one who will take money for favouring one or other contract. You will have the wisdom of the crowds,” said Simon Jentzsch, a German software developer who was one the people behind the idea.

Estimated to be worth $120 million, The DAO had raised 10.7m units of a digital currency called Eth as of this Monday. After the end of the fundraising period on May 28 and after choosing between proposals submitted to its website, the investors of  the entity will vote on what to do with the money.

The Ethereum blockchain, a public ledger designed to make its operations transparent and enforceable forms the basis of the set of so-called smart contracts that governs the organization. Things like the “deliverables, responsibilities and operating parameters” agreed by companies The DAO invests in are guaranteed by the contracts that are designed to do so.

The computer code was released publicly on Github, an online repository for code and was written by Mr Jentzsch’s brother, Christoph.

“We didn’t want to be the ones who started or controlled this, we didn’t want to do it for ourselves,” said Mr Jentzsch.

A group of volunteers called “curators” who check the identity of people submitting proposals and make sure the projects are legal before “whitelisting” them are the only humans who get involved with the running of the company, says The DAO’s website. The organisation’s investors will then vote on which ones to give money to.

One of only two organisations to pitch for financial backing from The DAO was a blockchain technology company called Slock.it where the Jentzsch brothers hold senior positions. The money that would be collected would be used to build a “universal sharing network”, a worldwide network “where you can share whatever things you have, [like] cars or houses”,  if the project is successful, said Mr Jentzsch.

He added that Slock.it would have to “negotiate” with The DAO for the money but said that it hadn’t decided yet how much money it would ask for.

Since Swiss law makes it possible to “take money from an unknown source as long as you know where it’s going”, a vehicle had been set up in Switzerland to facilitate The DAO’s investments in other companies said Mr Jentzsch when he was asked about how the autonomous organisation could ensure it was not being used for money-laundering by its anonymous investors.

Mobitiq, a French electric vehicle start-up, is the only other investment proposal listed on The DAO’s website.

(Adapted from CNBC)