Tally Labs’ $12m Fundraise: The Who, What, When, Where, Why.
On May 22, 2021, we purchased Ape #1798 on the secondary market for 0.4652 ETH and decided to name him Jenkins the Valet. We named the ape, first and foremost, because we wanted to contribute something unique and fun to the space. That contribution was rooted in a hypothesis that the next generation of household IP would emerge from the blockchain, and we felt it needed validating.
At the time, no one told first-person stories as an NFT character, and since we thought that should exist, we decided to start.
One story about an ape from the other side of the swamp (whose mother cried because she was so proud that he got a job as Head Valet at the BAYC) ended up snowballing into more stories and ultimately hundreds of Apes submitting their backstories for us to write about. Our focus then was the same as it is today: to have fun, to contribute to the crypto space, and to show that with a bit of creativity you can turn your NFT avatar into a character.
At the time, there was no business model. There was no entity. There wasn’t even a Discord server. And now, remarkably almost one year later on the dot, even though so much has been built around Jenkins, our goal has not changed. Jenkins the Valet exists to empower other NFT owners to tap into their own creativity and imagination.
We recognized, alongside all of you, that when we tap into our collective creativity, we can tell amazing stories. The stories we told together on Twitter were a blast, and they laid the groundwork for many of the characters who exist on your timeline today. Yet, when we announced our plan to write an entirely crowdsourced novel that would feature characters owned by the community, it sounded crazy.
We heard it from everyone: “A digital monkey is writing a book?” … “About what?” … “And the community is voting?” … “That will never work” … “That’s literally crazy.”
Yet when Jenkins became the first NFT character to sign with a major talent agency (CAA), it marked a shift in the narrative. It felt like people started to believe we could pull it off. When we announced 10x NYT Bestseller Neil Strauss, people really became excited. When we announced collaborators like Murda Beatz and MBSJQ, the anticipation was palpable and the book only became a matter of “wen.” Now the only thing that’s crazy about it is that we’re actually doing it. Together.
Today, we announce a monumental step in the growth of Jenkins the Valet, The Writer’s Room, Tally Labs, and our community. Tally Labs has closed on a $12m seed round led by a16z Crypto and other leaders across Media, Sports, and web3.
Before explaining what this means for our entire community, we’d like to tell you a bit more about our new partners:
- a16z Crypto: One of the most respected firms across all of Venture, with investments in companies like Yuga Labs, Coinbase, OpenSea, Dapper Labs, MakerDAO, and Compound Finance. Among many amazing team members, we’ll be working closely with Chris Dixon who was just ranked #1 on the Midas List as the top VC globally. They are true web3 and decentralization maximalists.
- Connect Ventures: A joint-venture between CAA and NEA (a top Silicon Valley VC firm). Seeing CAA double down on us outside of representation is so exciting.
- Penny Jar Capital: An early-stage venture firm backing the category-leading companies of the future.
- Dapper Labs: creators of NBA TopShot, CryptoKitties and Dapper Wallet
- Roham Gharegozlou: CEO and Co- Founder of Dapper Labs!
- WndrCo: A fund led by Jeffrey Katzenberg (a Hollywood legend). Anthony Saleh, largely responsible for the intersection we see today between Hip Hop and Venture Investing, led the investment.
- Will Smith’s Dreamers VC: Will Smith’s and Keisuke Honda’s (global football star) joint fund
- Odell Beckham Jr.: Pro Bowler, Super Bowl Champ
- Paul George: NBA All Star, Olympian
- Kenya Barris: Screenwriter, producer, director + actor | Creator of “Blackish” and “BlackAF”
- Allyson Felix: Multi-Olympic medalist in Track + Field
- Jim Toth: Founding Board Member of Hello Sunshine, Hollywood veteran
- Packy McCormick: Accomplished writer, angel investor and founder of Not Boring
- Lionel Richie: Global icon
- Double Down: Magdalena Kala’s new fund!
- Sterling VC: A sports and media-focused fund, supported by the principal owner of the NY Mets
- Framework Ventures: Crypto-native venture capital firm.
- Listen Ventures: A brand and culture focused venture capital firm making their first web3 bet on us
- Keen Crypto: Blockchain native venture fund, of which our advisor Adam Brotman is a partner in
- + other incredible investors remaining anonymous across all of the areas we are building in
Anyone who has spent time in crypto over the last few years knows that raising capital itself isn’t as challenging as it used to be. What still remains as challenging as ever is getting capital from the right partners.
From Day 1, we told ourselves that we would never take in outside capital from people who didn’t genuinely believe in our vision for our business and for the future of decentralized content. More importantly than that, they needed to believe in our community. They needed to feel as strongly as we do that nothing is possible without all of us together.
Throughout our fundraising process, we spoke with many folks who were simply not the right fit. Every single person or entity on the above list is there because they believe content and IP should be community-owned and generated, composable and collaborative.
Most importantly, the people on this list have shown us over the last few months that they want to roll up their sleeves and help us accomplish our collective goal as a community. We’ve worked for nearly four months (since late January) to close this round of funding. Every step of the way, through every aspect of this process, we’ve asked ourselves if the decision was the best one for the Writer’s Room. When the answer was yes, we moved forward. We hope this timeline gives you insight into the care we took throughout this process (and maybe why some of the items on our roadmap are taking a bit longer than anticipated :) ).
These are the types of questions we asked ourselves throughout the process to evaluate if an investor was the right fit:
- Do they want to change what we’re doing? By no means are we so stubborn to think that we know everything, but it was important to us that our future investors knew that they were joining something established. Something with a direction, with values, and with a community that we’re in lockstep with. We ended conversations with anyone who we felt may have been pushing their own agenda.
- Have they been a part of companies’ successes at the highest level? While we’ve had success in our careers, neither of us have led companies at the scale that we hope to see Tally Labs reach. We will never pretend to know everything. For that reason, aligning with firms and angels who have been a part of major success stories is incredibly important. We are fortunate to be aligned with investors who collectively have been a part of scaling some of the most exciting tech companies in history.
- Can they envision a Web3 future? While we think there are some incredible lessons to be taken from Web2, we believe that many of the rules need to be rewritten. It was important to us that our investors showed a fundamental belief in Web3. We will never make a decision based on something that doesn’t ultimately help us democratize content creation.
- Can we call them with bad news and expect to find a partner? Building a company is hard and it won’t be all rainbows and sunshine. When things get tough, it’s important to be in the trenches with people you like and trust. It makes it that much easier to push through.
We study this space everyday and we spend our lives immersed in it. We feel like we know it like the back of our hand, and one thing we’ve seen a bit of recently is negative sentiment towards VCs. In some cases, it’s certainly warranted. Other times it’s not. While there are predatory investors out there who want to extract value from the space, we rest easy knowing we took the time we needed to make sure we picked the right partners.
In the interest of transparency, we’ve prepared a FAQ to address some of the questions that may be running through your mind:
Do all of the above people and firms “own” Tally Labs now? No. When raising venture capital, companies typically give up small pieces of equity in their company in exchange for capital to scale. We are still the majority owners (by far) and we also make up the entire Board of Directors. While we are not sharing Tally Labs’ valuation, we can promise you that we would not have done this deal if it meant giving up more of the business than we were comfortable with. Tally Labs will still be run by us, and we couldn’t be more excited to collaborate with our new partners to tap into all of the knowledge and expertise they have across various industries.
Are you raising because of the recent price downturns across Crypto and NFTs?” No. And unless you really need to, we would not recommend making a move that serious out of desperation. We began this process back in January, well before the recent events. We approached it rationally and felt that it was what was the best move to help us achieve our ultimate goals with Tally Labs and the Writer’s Room. Now, of course, the timing is pretty good. Having a bolstered balance sheet today with additional capital gives us the ability to not have to make future moves out of desperation no matter the macroeconomic environment.
Aren’t VCs the antithesis of Web3?: We don’t think so. We believe this is a generalization. We think the best investors have adapted to the Web3 world and will continue to do so. As we mentioned above, capital has been commoditized in the Web3 space — we see new projects raising $30m+ via primary sale on a weekly basis now. What’s not easy is getting capital from the right people. We feel that we’ve gotten capital from incredibly strategic partners whose value goes far beyond a dollar.
What changes now?: Our goal is for our community to feel an exclusively positive impact from this move. We’ll be scaling our team across Engineering, Design, Solidity, Ops, Creative, and Marketing. This means that our community will see Tally Labs putting out better work, with shorter timelines, and more professionalism. When you raise from outside investors, you must reach a new level of accountability for your business. We are really excited for you to see that output. Nothing will change with respect to the way we make ourselves to the community for any feedback, thoughts, questions, and concerns. We’ve worked hard to foster that environment.
We hope that this piece has given you, our community, insight into how this opportunity came about, why we decided to pursue it, and what this means for the future of Tally Labs. We are certain this is the best direction for all of us and will be looked back at as a defining moment in the company’s life. The Writer’s Room has our word that we will continue to operate with the same transparency, availability for our members, and community-first mindset that got us here in the first place.
Buckle up. Things are about to get real.
And as always: We Are Book People.