What are the side effects of DAO?

As a keen observer in the cryptocurrency and finance landscape, I'm curious to understand the potential pitfalls and challenges surrounding Decentralized Autonomous Organizations (DAO). Could you elaborate on some of the key side effects or considerations one should be aware of while engaging with or investing in a DAO? Specifically, I'm interested in understanding the risks associated with governance issues, security vulnerabilities, and any potential for mismanagement or misuse of funds. Additionally, how do DAOs handle disputes and ensure transparency in their operations? I'd appreciate a concise yet comprehensive overview of these aspects to help inform my decision-making process.