Thursday Thoughts #8

Rarible - Alexei Falin

Hello world, and welcome to the eighth issue of Thursday Thoughts.
Each week, founders and investors share their thoughts on fundraising trends and strategy.

Rarible is one of the most successful NFTs marketplaces in the space, launched in January 2020.
A month ago, they announced their $14.2M Series A round, with participation from Venrock Capital, CoinFund, and 01 Advisors.

Rarible’s co-founder and CEO Alexei Falin sat down with us and answered a few questions about his company’s hectic fundraising journey.

You recently closed a $14.2M Series A led by Venrock Capital - they're obviously a traditional venture fund. Can you walk us through that decision (vs going with a crypto-native fund)?

In our pre-seed and seed rounds, we were supported by some of the best crypto-native investors in the world which helped Rarible get off the ground. By the time of our A-round raise, it was evident that NFTs were going mainstream and that we needed mainstream investors in addition to our crypto investors to help build the company and effectively reach a wider audience. Ultimately, we are thankful to all of our investors for believing in Rarible’s mission and we aim to continue making Rarible and NFTs as a whole a household name. 

You decided to pick a few investors for each round rather than a village of funds and angels - can you explain the reasoning behind this?

We received significant interest from investors in our seed round and A-round; almost every major fund reached out to us to get involved. We decided to stick with investors who shared our vision and could bring their own unique set of competencies. Additionally, our team had no intention to sell Rarible, and we were already making more money than we burned, so we tried to keep each round as small as possible. This approach limited the number of funds we could choose, and we had to select the best partners carefully. 

Both rounds took a couple of months of discussion by our team, and we are thrilled with the outcome. It’s been such a pleasure to work with every one of our current investors. Our partnerships with them are about so much more than money; we’re grateful for the years of experience and expertise they bring to the table as well.

You introduced your token in July 2020 and were one of the first teams in the NFT space to do this - to what extent did this influence your fundraising processes?

RARI is a governance token and it is not meant to serve as an investment tool. Instead, it helps to govern the Rarible Protocol and ensure Rarible runs efficiently. We have a huge community signaling power and Rarible depends on the success of the Protocol. As such, the RARI token doesn’t affect the fundraising process directly.

You completed three funding rounds in only 9 months, obviously dealing with very different markets. What is the most valuable skill you learned through that journey?

Rarible already has a strong presence in the crypto market, but these funding rounds were a valuable lesson to begin working with VCs and closing multiple funding rounds in a short time frame. Working with VCs who have a proven track record of growing major companies was really valuable for our team since our vision is to bring NFTs into the mainstream market.

One other important lesson we learned is that we should be prepared to launch another round at any time. Crypto hype cycles are hard to predict and impossible to avoid, so it’s important for us to be prepared to respond to these changes.

Along with your Series A’s announcement, you revealed an official partnership with Flow to bring NFTs mainstream - any fundraising PR strategies advice for founders?

That’s right. As you noted, our recent Series A announcement wasn’t just a typical investment round announcement; we chose to unveil our strategic partnership with Flow at that time as well. The Series A and our partnership with Flow really go hand-in-hand; they’re both major advancements in our journey to take NFTs mainstream and to reach new audiences. By coordinating the two announcements together, we were able to make an even bigger splash in mainstream and crypto media and really capitalize on the milestones we achieved.

Many thanks to Alexei for sharing incredibly valuable insights.

See you on Tuesday for Dove Dispatch #12,

The Dove Mountain Team