[Short #8] Follow the $ pt. 1
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Thought I wasn’t going to send one out today, huh? :)
I’m still figuring out my optimal writing schedule. I’ll keep writing daily until my schedule doesn’t allow for it, I really enjoy it and hope you do too!
Enough about what I’m learning about myself, you’re here for the good stuff.
And today’s ‘stuff’ is about money.
Where the hell is it coming from?!
Sure, we know there are rich individuals and funds (crypto native or otherwise) starting to buy up high-value NFTs.
But $250 MILLION in transactional volume since Saturday morning?! Wowza.
As mentioned in yesterday’s post, the founders of Moonbirds are very well connected in the tech and VC communities.
Considering their track record, reputation, and deep interest in Web3/NFTs, did their networks with considerably deeper pockets buy Moonbirds?
I don’t know for a fact but…
Because the raffle to mint a Moonbirds was a low-ish 25% success rate, you likely had to purchase on the secondary market in order to get one.
And if you wanted multiple, you had to pony up the ETH.
So why am I talking about Moonbirds for a second day in a row?
More projects will launch with qualified and well-connected founding team. Not only will your average NFT fanatic try to purchase the project, but their network will try to get in as well.
Remember, Kevin Rose is also a Partner at True Ventures. Wouldn’t you think every person at the VC fund tried to get a Moonbird? That’s not your average NFT degen.
The key here when I say ‘qualified’ is that not only do they have a strong track record, but they understand the space well and respect it. Aka not what Floyd Mayweather and many others in the space have attempted and failed.
VC funds will adapt to the evolving fundraising landscape. Remember, the PROOF team ‘raised’ $60M from mint and will receive 5% royalties from secondary volume…and they didn’t give up equity for it. 🤯
So what do those that hold the VC purse strings do about this? I’m speculating here, but I think there are still plenty of options, just gotta get a little more creative :)
1. Redefine what it means to be a VC scout.
So basically…everyone that trades NFTs is a VC Scout of sorts. Your resume is your Opensea account and Wallet :)
2. In earlier stage projects, funds should actively purchase the NFTs to show support. What better way to be ‘founder friendly’ than to buy their NFT?
Remember that monster $450 million Yuga seed round?
Uh…ya I wouldn’t bet against Yuga…
3. Empower point 1 (your scouts) to result in point 2 (the typical VC fundraise round).
Keep in mind that $300k+ BAYC was originally a $200 mint. What does it a look like if funds gave their VC scouts $100k annual budget to support founders by purchasing NFTs?
Also, a lot of these young projects need more professional expertise. They may have a brilliant vision and IP in the making, but might not have the business or operational experience that these scouts have.
On top of that, this space is fun :)
4. Adjust preconceived notions and mental models on what a ‘good company’ is.
Imagine…you’re at a VC Demo Day and a group of 3 founders come up on stage. They talk about their company — Diehard user base, great track record, everything checks out.
Then they share introduce themselves: Burnt Toast, Poopie, Tulip.
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Right?
Great job! You just passed on one of the top projects in the space, Doodles.
The game is changing. Adapt to it.
5. And if it doesn’t work out? Enter Private Equity/buying out projects. This is already happening, especially for the projects that have a strong community and brand/IP potential.
Pudgy Penguins is a great example of this, and this happened 2 weeks ago (6 months in NFT terms).
So, have the floodgates opened with money that’s been waiting on the sidelines?
I’m not convinced that they’ve opened completely, but rather opening a crack. As more Yuga’s and signals of a maturing space emerge, those with deep pockets will be more comfortable and the party will really start.
BONUS
Yay, you made it to the end! You get a gold star, two in fact :)
And these stars have a pretty big following.
Well well well, look at what Jimmy Fallon tweeted to his 51.4 million Twitter followers.
BTW, this tweet has 8x likes, 18x retweets, and 15x replies vs. his previous one.
Let’s see what Justin Bieber is posting on his Instagram account with 231 million followers!
5 posts of NFT projects (1 of them his own) in a span of 3 hours. Wow he must really like those pictures you can right click save!
Until next time tomorrow folks.