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VC #9: Tally's Seed Round
Wow, the team of investors is diverse and impressive!
This is Valet Confidential (VC), the best way to keep up to date on Jenkins the Valet, Azurbala, the Jenkins Audio Experience, Book 1 with Neil Strauss, mutant hijinks, and everything else in the Writer’s Room ecosystem.
On January 31st, Tally Labs and Jenkins the Valet revealed Roadmap 2.0. The scope is massive and incredibly ambitious. A book with a host of well-known collaborators (Neil Strauss, mbsjq, Murda, IC4 Design) with a custom ebook interface. An Audio Experience produced in collaboration with SALT Audio which includes six(?) other NFT communities – including custom software for enhanced interaction. A licensing portal that will connect avatars to creative projects, leveraging The Writer’s Room NFTs as the conduit (and they will be the benefactor of shared profits). Then there’s Azurbala, the Azurian pfp, and an interactive world with a native token, $MARROW. And lastly, two DAOs: Media DAO and Character DAO. Building and supporting one DAO is hard. Two is… well, twice as hard?
All of this requires well-designed software (UX/UI), extensive partner relationships, well-written marketing and explainers, frequent community-focused events, and an entire company all rowing in the same direction.
And this is just the next six months. What does the next 12 months look like? The next two years? Think their ambitions will get smaller? Or much, much larger?!
I think we got our answer today.
Tally Labs announced a $12M seed round led by a16z’s Chris Dixon – a true champion for Web3 ethos and vocal proponent for decentralization since at least 2018. His a16z Crypto fund has invested $3B in various blockchain startups, including Opensea, Dapper, and Yuga. Now they add Tally Labs to that list. I can’t imagine a better advocate for the humble valet! On leading the seed round, Chris said on Twitter:
Even before NFTs hit the mainstream zeitgeist, SAFA and Valet Jones recognized that NFTs could be much more than PFPs and act as a medium for communal creativity and digital IP.
Most importantly, they’ve done it all with their community. It’s this collective group (and all of the others who will join in the future) that makes us most excited to support the mission of decentralizing content creation.
Let’s dive into why Tally took VC funds, who the investors are, and what these investors mean for possible future projects!
Again, look at the broad ambitions outlined in Roadmap 2.0. Execution of all those elements takes significant operationalization of the entire company – and more people in the company. But the answer isn’t just more people. Web3 companies require a broader set of skills earlier in their growth than most typical, software-focused tech startups. Tally isn’t hiring 25 devs and calling it a day. In addition to devs and full-stack engineers, they’re hiring product designers, content strategists, and biz ops roles. I could see them adding more biz dev and partner relations roles to expand interest in the upcoming Licensing Portal. Maybe more marketing and comms roles to spread the message. I mean, the Director of Vibes needs assistants!
Staffing up like this costs money. Building an organization intentionally takes time, patience, and… capital.
Another important aspect to mention here is the Second Wave Effect. Heard of it? No? Hmm. Ok, I just made it up, that’s why you’ve never heard of it. Let me tell you about it.
Launching a successful Web3 project is hard. Growing a thriving Web3 community is harder. Building an operationalized Web3 company that can match vision with execution is significantly more difficult. That “Second Wave” of product(s) after the first launch is what will define 98% of consumer-focused NFT companies. Success requires aligning product, technical, and messaging to community and market expectations.
Fail and it’s likely to be a wrap. Nail it and there’s real momentum.
Now let’s talk about who invested!
We talked about the Why, but now what about the Who? One thing that’s clear is that Tally Labs was extremely deliberate about whom they ultimately decided to partner with. Acknowledging some overlap, we can begin to see some clearly defined groups that allow for a smooth fit with the projects we know are upcoming. A Lead Investor. A Tech centric Group. A group of Entertainers and Hollywood veterans. Consumer Product experts. And a Sports centric group? We asked VJ and Safa whether the diverse mix of investors was intentional. Here’s their answer:
Yes — 100%. There is a clear lack of diversity in web3 right now. Many of these investors are coming in with their own ideas for how we can work together to change that. It’s really important to us.
Let’s take a closer look at some specific members from the list of founders, visionaries, entertainers, builders, and moguls that make up Tally Lab’s new investors.
a16z Crypto. A division of Andreesen Horowitz, a16z are leaders in the Web3 space, and tech more broadly. It’s kind of difficult to even be in the NFT space on a daily basis without touching one of the companies in their portfolio.
They led the funding round with Chris Dixon and Jane Lippencott running point. Chris is number one on the Forbes Midas List for 2021. He’s likely THE person you want leading your funding round. On Web3 tech, Chris said on Twitter earlier today:
NFTs are the building blocks for new Web3-native, collectively-owned media studios, and the tools that Tally Labs builds will enable any NFT holder to create and distribute IP with the support of a DAO that includes creative leaders and an authentic Web3 community.
Tech Centric Investors
An incredibly simple interface and a unique portal have been at the core of jenkinsthevalet.com since the very beginning. NFTs are a massive part of the products Tally Labs will continue to deliver, but are also at the heart of the decentralized content which the Writer’s Room community will help create. It’s not a surprise that Web3 builders and tech centric investors are part of the Tally Labs seed round.
As the Tally Labs team continues to build and scale, there will be a need for even more experience, bandwidth, and horsepower to ensure their tech performs effectively and reliably.
In addition to a16z, the other investors are:
Roham Gharegozlou. CEO of Dapper Labs. We will touch on Dapper a bit more below, but Roham is a very respected builder, investor, and executive in the Web3 world. Should be an amazing advisor for the Tally Labs team on building and succeeding in the space, and has led multiple funding rounds for Dapper to the tune of over $600 million at almost at an $8 billion valuation.
Packy McCormick. The founder of Not Boring, a Web3 centric newsletter and a successful investor. Will be a great advisor for the team to go to for opinions and as a sounding board. On Twitter today he said:
Community storytelling is going to open up unimaginably rich new worlds. Tally Labs is both showing the way-with Jenkins the valet & an upcoming book with Neil Strauss-and building the tools for decentralized content & IP. As a storyteller, I’m thrilled to back them.
Framework Ventures. A Web3 and blockchain centric firm that has a push for a decentralized future across consumer and enterprise business models. Fantastic roster of Web3 native companies in it’s portfolio. Fantastic resource for building tools across the blockchain.
Keen Crytpo. Led by veteran Andy Sack and Investors in Irreverent Labs, an AI powered blockchain gaming company. Keeping my eyes on this connection as we begin our journey into Azurbala and start to interact with that world. Could this be the connection that unlocks the environment and NPC interactions?
Hollywood Centric Investors
WndrCo. Led by Jeffrey Katzenberg and Anthony Saleh. Jeffrey Katzenberg is a huge name in Hollywood having been the co-founder and former CEO of DreamWorks. Shrek. Madagascar. Kung Fu Panda. How to Train Your Dragon. Bored & Dangerous? These kinds of connections to the movie-making industry are invaluable for Tally Labs, Media DAO, and the community.
Dreamers VC. Led by Will Smith and Japanese soccer player, Keisuke Honda. Will Smith needs no introduction as one of the most successful and prolific actors of all time. Keisuke Honda is an athlete of note, and the firm’s stated goal is “bridging established Japanese corporate investors with early stage US-based companies”. Investments in their portfolio include Dapper Labs, Clubhouse, The Boring Company, Sandbox VR, and many others. A strong international connection, led by one of the most well-known actors in the world, is a combination that should help smooth worldwide expansion.
Jim Toth. A Hollywood veteran and former successful CAA agent and co-head of motion picture talent, his list of former clients Robert Downey, Jr., Zoe Saldana, Jamie Foxx, Chris Evans, and many more. He’s invested in the Nashville SC MLS team. Not to mention, he’s the husband of Reese Witherspoon. This is yet another investor who can navigate the entertainment industry, make introductions and recommendations, and get projects over the finish line. An incredible asset to the team and community.
Kenya Barris. Critically-acclaimed and successful actor, producer, writer, and director with hits such as Black-ish, #BlackAF (Ed. note-highly recommend this hilarious show!), Grown-ish, and more. Voices and perspectives like his are sorely needed and important to the growing Web3 community. Yet another investor who can open doors, help the Writer’s Room walk through them, and make our ideas a reality.
Connect Ventures. CAA has had a front row seat for quite a while representing Jenkins and the Tally Labs, and it appears they loved what they saw. They’ve now put even more skin in the game, and joined the investment round through their partnership with New Enterprise Associates.
With CAA now on board as an investor, one can assume they will be applying even more resources and focus to ensure Tally Labs and the Writer’s Rom have everything they need to execute on their shared vision.
Lionel Richie. What more can you say about Lionel Richie? He’s a legend that has been successful in the entertainment industry for decades, including currently as one of the hosts of American Idol. Look no further than someone you can call on to ask about sustained success across music and entertainment.
Consumer Product Centric Investors
Double Down Partners and Listen Ventures. Both firms have been extremely successful investing and launching consumer products. Mags Kala from Double Down is a unique rapidly ascending investor. Listen Ventures is making their initial Web3 investment with Tally Labs. Here’s Mags:
NFTs are about ownership
Ownership is about benefits
Most NFT holders don’t know how to max those benefits (like commercializing owned IP)
Community-driven & community-owned entertainment is the future.
I'm SO PUMPED to invest & help make it happen!
That’s the sort of know-how on building for customers and executing product launches will be critical as the team moves forward.
Sports Centric Investors
As we discussed earlier, the other groups of investors fit very well with the already publicly announced projects. Bored & Dangerous. The Jenkins Audio Experience. Azurbala. One would assume not a lot of sports being played in those verticals.
So why all the athletes and people involved in sports? Investors include Penny Jar Capital, Paul George, Odell Beckham, Jr., Allyson Felix, and Mets owner Fred Wilpon through Sterling VC. As we mentioned earlier, the team was incredibly deliberate about who they brought in as investors. What does the Tally Labs team have coming that has a focus on sports and athletes? A few speculative guesses:
Storytelling: picture the “F1: Drive to Survive” series, the movie “Rise” featuring Giannis Antetokounmpo on Disney+, “Hard Knocks” on HBO, etc.. Specific targeted stories about teams, athletes, or organizations that give you more color and richness in regards to their lives and day to day. Could these happen in the metaverse as well? Can we dive into the Web3 journey of people in the sports world?
A new way for avatars to compete: The vast majority of the ways our avatars have been able to, or will be able to, interact is through some sort of fight or battle. But why couldn’t they compete in sports instead? Wouldn’t you love to see an Azurian cross up a Bored Ape and drain a jumper over the outstretched arms of a Gutter Cat? A World of Women character launching a 70 yard bomb to a Wolf Game Sheep, just as a Wolf Game Wolf tries to break up the pass? Wouldn’t that be fun?
Web3 media sports coverage: The way sports are consumed has been expanding greatly over the past few years. NFL games on Amazon. Separate national broadcasts for the same game featuring commentators with different goals and focus. Watching games in VR. Will we see a metaverse arena where professional sports start being played? Complete with fans, commentators, sideline reporters and everyone else all being avatars themselves? Wouldn’t it be great to see a DeadFellaz interview Steph Curry?
Athlete-specific fan clubs: We know that Tally Labs and the Writer’s Room are building a decentralized studio / agency, amongst other things. That seems like the perfect apparatus to build out a metaverse-centric fan club, and maybe even an environment, for specific athletes, organizations, or teams. Can my avatar jump into Allyson Felix’s world and interact with her? Maybe even have a virtual race? And that race turns into her own unique content. And it’s all gated by her specific NFTs.
Dapper Ventures. The company at the foundation of the NFT wave we are all still riding through their NBA TopShot platform, Dapper Labs has joined the party. Certainly a significant tech partner, but also a leading Web3 company in the professional sports world. They have brought very successful NFT projects to market with the NFL, NBA, and the UFC and could be a tremendous asset. They’ve created their own blockchain (Flow) and multiple successful NFT projects with major outside partners. Who better than them to advise and assist with continuing to expand the sports world in the metaverse?
This announcement was a massive step forward for Tally Labs and the Writer’s Room community. SAFA said it himself in the CoinTelegraph article, “I think capital in today's day and age is not incredibly difficult to come by, but we think it’s more so about who the money comes from, and we’ve feel that we’ve found the best group of people we could possibly ask for.” Based on the deep dive we just took into that group, we’d have to agree.
Some Disclaimers: None of this is financial advice. DYOR. And yes, FilmBook and SpaceWalk are TWR collectors and long-term hodlrs.