#14 How to Fundraise your Web3 Gaming Project in 2023 - Advice from Shai Perednik (VC Kalman's Forge)

In this episode of the Token Takeover podcast, we share a community question / answer session with Shar Perednik (VC Kalman's Forge) to discuss best practices for first time founders and small startups in approaching their first fundraise.

Connect w/Shai:
https://shaiss.notion.site/Homepage-b6a3679e7e244f858d31bc02780856d8

Join the conversation! 
https://discord.com/invite/FHZzMfBBqa

Links:
Follow us on Twitter - https://twitter.com/GamingStartUp_

Follow us on Twitter - https://twitter.com/GamingStartUp_

Transcript

0:08

Sharing. That would be a video call. Yeah. But no control over the cameras then. Yeah. Can you, um, uh, do you want to, you want to come up on, on stage with me, man? Invite to speak? Oh, okay. Okay. So I'm going to say yes. Hopefully that worked. What's up, man? Hey, what's going on? Hey, look at us. Figuring stuff out. Hey, what's up grazlow Really bad experience once with uh, with live cams audience. I think everybody's cool until somebody's I had to get called let's put it that way what the hell yeah Okay, well you gotta, you gotta color in the blanks, man. I mean, it went from... It's the kind of stuff that you never want to see. And, uh, and the FBI has to get called if it, if it shows up on, you know, on a live stream, so. Something that as a, as a father or a parent or any human being you'd hate to see. That happened once, and it was... Oh, God. I still remember it. Yeah. Oh. You have to be careful with, uh, with live cams, unfortunately. Yikes. Yikes. Okay. Okay. Yeah, it's uh, it's a good call out. I guess you never really know people, you know? Well, it was uh, it's open, you know, so it was just somebody we didn't know really that came into the event. But we all needed counseling after, so. Yeah, I imagine. Hey, uh. Oh, hey. I don't know why I, I, I, I don't know why I, like, went with that as the, uh, as the thing. GM, it's 1230 miles on the west coast. Uh, cool that you have a, uh, a thing going here. And I'm gonna try and actually go share it a bit. So, try and get some other people in here. So, hang on a sec. Well, do you want other people to come in? Yeah, as long as they find it valuable, we'd love to have as many people want to join in as possible. Hey, Grazel, so I was saying, so, I set this up through this stage, because I like how it visually looks, because we're recording it. But then, I don't like how you guys have to raise your hand to ask questions. Like, I want this to be, like, super low key and accessible. So, if you want... Like, feel free to raise your hand, or ask to speak, and I'll just bring, pretty much I'm just gonna bring everyone. So that way you guys can like, ask questions without having to type them out. Unless that's your preference. Like, I understand maybe folks are multitasking, so that's cool too. Sweet! Yeah, so let's see, logistically... So Shy should be hopping in here any minute. Um, I have some questions from the community that we'll go through and we'll ask. Uh, folks who couldn't attend. You guys, feel free to ask general questions. Specific questions about, like, your experiences or things that you're personally working through. Um, and then as a fallback plan, I do have a bunch of questions I've put together. Just in case we run out of content. And then all this stuff will be recorded, put up on the YouTube channel, probably turn into a blog or something. Oh shoot, give me, give me one second. All right, turn on cam. How um, how have you guys found the community so far? I was just putting it into the Game 7 community here. Okay, yes it is. Uh, community's been good. I love your podcast. Been waiting for more episodes. Now I'm slumming. Slumming, hitting up other people's podcasts right now. But uh. Yeah, I've. Hey, what's up Shy? I know a couple people are raising. I, um, I tried doing it earlier, earlier this year, but not, you know, not too much intentionality behind it. And so, yeah, I, uh, love, I love this topic. Alright, so, sorry, real quick. So, Graslow, what's up, man? Uh, and then Shy, I think I just sent you a invitation to speak. And hopefully it'll bring you up. Boom! Look at us. Okay. Hi there. What's up, man? Long time no talk. How are you doing? Yeah, you too. I'm, I'm, I'm well and alive. Uh, and building with my hands down. And sometimes I come up for air. It's funny, it like never really changes. It's always the same. It's always like hard work, grinding. It's fun though. I mean that's, that's, that's where I get my, like, my fuel and fire. I jokingly say that I, I, I feed off other people's passion and their fire. Cause that's what then fuels me, right? When I see people building and doing cool stuff, I'm like, I get excited. Dude, for sure. And I know every time that I talk to you, like some, I've even went back and listened to our podcast. Just, just like your, your thought process and how you're seeing the future is just so exciting. Like so exhilarating. It gives me like a boost of energy on days where I'm feeling like lame. I'm glad. Yeah. It's my aim in life is to entertain people and uh, give them a little information. Yeah. Alright, so let me uh, let me hit a couple logistical things and then we'll jump right in. So, everyone who's in the audience, feel free to request to speak, alright? Like I want this to be communal, so if you guys have questions, you ask. Like I don't, if you prefer to type, obviously that's okay, but... I just feel like the live conversation is going to be, uh, if you feel comfortable, feel free to throw your camera on, you know, um, obviously no, no stress if you do not. And yeah, so let's kind of set the scene a little bit. So we, we created this community about a week ago. Uh, the gaming startup collective really where it started was I, as a founder earlier this year, trying to fundraise for a infrastructure project we were building, just found it like. Really, really difficult, um, partly because the market's tough right now, and partly because I was making a ton of mistakes, and I wish that I had someone or a group of people I could go to, to like brainstorm things, um, invite people who have maybe been through this before to ask them for advice. So that's really what we're trying to build here. So as part of that, we took a poll, and we said, what is the topic that's top of mind for everybody? And fundraising was numero uno. So I had the pleasure to speak with Shy earlier this year. Shy, you know, why don't you go ahead and do your own intro? Because I'm just going to butcher it. But he's like. An amazing person. Go ahead. Thank you. I appreciate it. I'm working on being amazing. Put it that way. Um, I've been in IT for about 28 years now. Uh, the last, uh, my majority of my career was really focused around digital transformation, really understanding, um, IT and really understanding really the bleeding edge of technology, um, and helping, uh, enterprises and startups go through those enterprise transformation. Many times as a solution architect. So I've had the benefit of both being at an architecture and at an, at an, uh, at an executive level, but also being very hands deep and hands-on, uh, with all the builders throughout my career and really, uh, getting into every nook and cranny of it that I could. Um, since 2010, I've been digging into the blockchain space in general. I read the Bitcoin whitepaper in 2010, uh, coincidentally was, uh, Halloween, uh, sorry, ran Halloweens around the two year, two year mark. Uh, built a Bitcoin miner, uh, typical story of, of wiping the Bitcoin miner and then putting it somewhere in my storage and losing it in the storage, um, and just accepting that that's the way of life, um, focusing on the technology, really, um, everything I could till about 2017. Uh, and then 2017, uh, really with the ICO boom, really something hit me around the, the, the ability now with programmable money, uh, to really be run on a distributed network, particularly with smart contracts, uh, and sort of all the abilities and things that you could do as an enterprise if you were to start adopting that technology. Uh, so continue digging into it until about 2020, and then 2020 founded the, uh, crypto cohort across Amazon, uh, built that out to a 1600 community with about 800 hours of content. A lot of the messaging, a lot of the announcements that you're hearing, uh, including the Solana one, uh, today, uh, were some early projects and initiatives that I was part of, uh, almost two years ago. Uh, so I have very fortunate to be an executive role, uh, leading the Web3 partner organization, uh, and then most recently had the opportunity to, uh, start my own startup, uh, which is, uh, Commons Forge, uh, and we build startups. And so I'll leave it at that. Thank you for having me on. Boom. There you go. See, I told you I couldn't do that justice. Oh, he also forgot to include, let's see. What else have we, um... Oh yeah, there's some stuff. Let's see, you're a competitive drone racer? Or hobbyist? So, yeah, this is a fraction of the drones that are in the collection. Uh, we started cleaning up a couple months ago. Um, I used to do more of the acrobatic flying. Uh, I would say... Competitive, mostly competing with myself and circle of friends that we had, we had a local community group and we were competing, uh, mostly on photography shots and stuff like that. Uh, there was a whole mess of 3d printers back here, 3d printing. Uh, and I, I would say the thing that I'm most proud of, of all my hobbies, uh, was that all this led to delivering about 35, 000 face shields for, uh, the foundation that I founded, which was for PP for PA. Um, and so it was awesome during COVID to put my engineering skills and 3d printing skills to use. Uh, to deliver face shield and face masks for our community. See, I told you guys I told you guys he's an epic person. All right. Oh, there's there's four kids somewhere when they left the house today. There was four. We'll see when I come home And he used weren't you like mayor or something? You used to be a mayor or I was council member not quite mayor. All right. Anyhow, we're oh shoot. Did I lose you? Can you hear me shy? Can anyone else here or is it just me? Did you lose me? Oh, I can hear, you know, my studio, my cut out. So I pause I'm going to use the regular mic for now. I was saying, thank you for the title mayor, but I wasn't mayor. I was actually, uh. Council member and planning commission, uh, for about 4 or 5 years. Um, counseling, it's easy being a mayor because you just get to make decisions and hit the iron gavel. Yeah. As a council member, you have to really work with everybody, be part of communities. Uh, so, yeah, there you go. That's where we got a lot of my teeth on the. Public sector. Okay. All right. Now, now we're done building shy up. Uh, so let's tear them down now. I'm just playing. Um, all right guys. So, so again, like the whole topic of this meeting, um, shy has seen a lot around fundraising, supporting early stage teams, so there are no questions that are off limits around that topic. So, uh, I guess I can open the stage. If anyone has some initial questions, and if not, I kind of have a flurry of questions I've set aside to, uh, to ping him with as well. So, anybody have some initial questions around Web3 fundraising? I've got a couple, uh, initial questions. Um, good to meet you. This is, uh, is Dave, as you can see. So, traditionally, I've been a founder of lots of different, um, types of companies, and, um, usually solo, sometimes with friends. Nice Traditionally, I put a lot of work into a pitch deck and, um, I've seen people put a lot, a lot of time into a pitch deck. That's just chock full of information. Um, it's actually on one of, um, Nuwano Pallet's podcasts a few weeks back that I heard some very pointed contrary, um, kind of a discussion that, um, It's not necessarily the amount of information you put in, which it seems completely obvious in retrospect, but the pitch deck is really to get attention. Um, but I'm always... Fearful about leaving out, like, the magic, um, like, is there a magic number that I should have put in, et cetera, to show attraction or potential or growth. And so usually, well, I should say lately, I've been trying to, to add enough in there to, to kind of spark the, the dream in somebody, um, and so that they could potentially see, uh, you know, the large goals or what have you. But what is your opinion on that about, um, abundance of information versus use the pitch deck to get the meeting? So, I, I'm, I'm in the camp of that more information is better, right? That, that giving more information that's relevant to what you're doing, right? When you start going into superfluous and you talk to a sort of adjacent and you go off the rails, then, then yes, that's too much. But for example, my narrative. For Commons Forge was nine pages with 45 pages of data. So, I'm, again, I'm of the camp where I prefer to give more data. And as a, I, I, I, I look at myself as a technical investor, right? I, I invest from a technical side, looking at do we, do we build the resources, right? Is this worth the technology, right? Not, not cash. I, I invest in the technology side, right? Like, digging into the tech and what we build the tech and how we build it and all that stuff. So, when I spend time on that technology, When I look at startups and things are building the space, I'm looking for that depth, right? When I don't see that depth, to me, that's a red flag of either the team's not thought about that, or are they not understanding the technical details, right? And if they have a great pitch deck, but they don't have some of those technical details that we're looking for, or even like you said, some of the market details of what the market's like. Um, and then are they not really seeing the full picture? There are a lot of investors though that that do just want the bare minimum, right? They just want to know who they're investing in what they're investing in and when they'll get the return back and that's all they want And if you have those three slides, they're fine. You you may get the money from them, right? You may not want those kind of investors, right? Those type of investors ones that tend to be more in the business, right? They tend to be they tend to hold you to those dollars amount more So it's, it's also about what type of investors do you want? Do you want investors that are there for a long run? Do you want investors that are there for a quick exit? Are they there really to help you build out the additional products, right? Like, are you looking for them to be your gate, not necessarily your gatekeeper, but let's say enabler? To take what you're building and then go put it into a whole bunch of other different products and solutions, right? Their portfolio and their, their portfolios portfolio. That's the kind of investors that I like to work with. Those are the kinds of people, the VCs that I like to collaborate with because they, they, they are the ones that understand that this space is nuanced and that this space requires that depth. Um, and, and they're the ones that really put the due diligence and ultimately push out the better product. I find that the ones that are in there for the quicker hit looking for the shorter context They don't really care about the quality of product. They're just looking to make a return So so long as it makes a return in the short term, they're happy So I hope you gave that answer that I went about kind of a couple different angles there It spoke a lot to know a little bit about the investor Yeah, from a technical side, knowing that is tremendously helpful actually, you know, so I guess the follow up question and based on what you said at the end about investor wants to return, um, it's web three, sometimes investment options include, um, you know, people buying tokens, um, and, you know, a lot of the people in, I think in this gaming, well, there are web three gaming people where sometimes a gaming token can be involved. Um, so, you know, initial thoughts on that, maybe not initial, but thoughts on that token versus, uh, seed round investment. I, so I, I, the, the challenge I have in that, in that is my sort of decision tree starts based on where you're domiciled as a citizen. Because I think that's the biggest challenge that I found is that if you're in the U. S. And you go down the route of a token, you have to be really careful and follow all the crowdfunding, SEC, Reg D instructions, and you have to follow everything to the letter of the T. Again, from my perspective, I've been in public sector. I, I, I would spend time in the military. So I have a respect for laws and rules, right? I'm not here to break laws and rules, even if I don't like them. They are the laws and rules that we have in the US, and you have to understand those SEC rules. And that's the thing that I recognize, is when a lot of builders, especially in the gaming space, go the token route, they don't recognize the SEC rules that they're sometimes violating. I'm not a lawyer, but a simple one is you're not allowed to publicly solicit your token. Right. That's what we've had a lot of tokens in this space getting in trouble for. So there's simple things like that, that we need to understand as builders and entrepreneurs and engineers and marketers in the space. That to make sure that we're not violating some SEC rule. Right. That's again, if you're domiciled in the U. S. and that's why for myself personally, even the things I'm building. As much as I'm not crazy about it, I'm still going down the VCE seed route and then I'm looking sort of counter to that and really adjacent to that, the crowdfunding options like WeFounder, INX tokenization, all these platforms that enable you to come on and really take a lot of that burden off of you. Right? That's, that's a great thing when you have a parter that can take all that tokenization legal overhead away from you. And in that way, you know that you are following the rules all the way through, right? Of course, you still have to be careful. You probably should still have legal counsel. But there's a lot of caution that you have to go down if you're in the U. S. And you're going down a token route, right? Now, you, you can have the approach of, okay, then I'm going to go to a different country and I'll start in a different country. Yeah. Wonderful. If, if you can do that, by all means you can. I'm trying to convince my family to do that too. Right? Go to Malta, go to Malaga in Spain, or Portugal, Lisbon, right? Go to Belize, go to New Zealand. A lot of other countries where they're much more open to a lot of things that we're building, where when you launch a token, you, you have much cleaner cut rules as far as what you can and can't do. So it it, you're not sort of in this playing limbo of, am I, am I violating the rules or am I not? You, you, you kind of know, are you violating the rules or not? Yeah. It seems like there's, uh, you waiting for the other shooter to drop. Um, pretty much not knowing what the regulation landscape looks like, even if you don't blatantly, you know, do a public token offering and all that kind of stuff. But also. It feels like when you do take a, uh, when you do sell a large amount of token to an investor, that's happened to me before in the social token space. I was involved, heavily involved with Rally, uh, for example, with a gaming token. And it was a date in the future where investors were able to cash in their tokens. So that was like always looming on the landscape, knowing that that was going to affect the whole economy. So I feel like that's still a major kind of negative downside to doing a token deal like that. Almost the, the lack of the secondary market on the VC side, right? The, the, the, the challenge in building the cap table when you're doing it through a traditional VC route almost forces you to be more protective and more careful as you're going through and building it, right? You're, you're much more clear about what your terms are with the VCs when, when the equity vests and all this stuff, and you're going through all the detail with them, I find that along the tokenomic sign. Even though we already have boilerplates for decent tokenomics, there's a lot of products that are still released with really bad vesting schedules, really bad equity models, that ultimately ends up with a broken cap table. And, and the product may be fine, but from a business side in tokenomics, they've destroyed themselves. So, then you end up with, hey, we're going to launch a new token, you know, and you hear this all the time, and when you dig into why, there's a, there's a good amount of, let's say, I would say about 40 to 50 percent that are just because of broken tokenomics. They just realized they screwed up when they launched the economics. That's it. So that's that's the other reason why I'm still learning leaning towards that BC route. Right? Again, unless you're in other countries, and then you have that regulation that, you know, of, you know, some of those things you can build against. And then those partners in those countries are much more capable of building those economics models. Have you are there are there. Some like boilerplate approaches to token structures and vesting that you've seen, Shai. Like, I think we've done, you know, the VC and the team have the same vesting cliff and schedule to make sure, like, incentives are aligned, but I guess, have you seen any boilerplate stuff out there that we could share with the community while they're developing their tokenomics? I mean, it's similar to what you said. I'd have to, I'd have to find all the links and see one of the ones that I recommend. My, my challenge in, in like recommending a boilerplate is that I don't want people to just take it and use it as it is. Yeah. The point is that you should go and understand why it's there, right? So, I mean, the OpenZeppelin are some of the common contracts when we talk about tokenomics. That's the common sort of... Partner solution that we look at is all the OpenZeppelin, OpenZeppelin contracts that are out there. Um, so those are great. The other one is I would look at partners like ThirdWeb, Alchemy, uh, and Infura. A lot of the sample contracts that they have also have a lot of those tokenomics built into them too. Um, and so those, you can use those as those boilerplates. But again, I, I would highly encourage everybody. Don't, don't do the thing that we do in traditional development where you take a code example, you copy and paste and it works great, right? Try to really understand why the tokenomics are there. And why that vesting schedule is there, right? And if it's two years, why is it two years? Does it make sense for your business, right? That's the, that's a bit of the challenge, right? There's no one boilerplate that's gonna be like the base for everybody. There, there's like some basic things, right? The token distribution, right? The amount of tokens in circulation, the, the vesting schedule, the amount of people that you deliver it to, right? The way that you hold it in the developer wallet with a multi sig wallet as well. Those are basic like best practice things that you should follow But then the things like the vesting schedule sometimes just relate to your business as well Like how how long is your business going to take till it becomes profitable? And how soon do you want to start incentivizing people? So Don't just take it carte blanche either Take it as as a guidance and then say, you know, does this really apply to what i'm doing? And if it doesn't ask yourself, are you veering off from the norm too far? And you're trying to do something that like hasn't been done before and you're really You're really passionate about, you know, we should do this differently, or is it like, hey, we're going to adopt it because it makes sense and yeah, let's just go that route and we'll figure out the rest later. I think that that's good advice. That's good advice. Um, so I don't know if I pronounce your name right. Erasmo had a question around, uh, any thoughts about tokenized company shares. Have you encountered it? Yeah, so we're, we're seeing a lot more of that happening, right? We're seeing a lot more of like real world asset tokenization coming on chain. And so you have the. Sort of I want to make sure that the there's two ways to come to the question, right? So tokenized shares could be tokenized Tesla, Apple, right? Traditional like New York Stock Exchange shares that are tokenized, right? That's one of it. The other tokenization is sort of as you're launching a company, you're tokenizing the company's shares. I think the latter one is the one that they're referring to. I don't think they're talking about real world assets in a chain. Okay. So the, the second one, right, which, which is similar to things I'm looking at too, it's, it's the equivalent of issuing your common shares, but rather than issuing your common stock or preferred stock as traditional stock, you're issuing those as tokenized stock. So, all it is is, and again, it depends on the platform you're using, because what you're doing is you're, you're, you're basically defining the tokenization platform that you're using or the exchange as a line item on your cap table. Okay. And so all the investors come in under that one line item, and you issue out a certain amount of tokens to that tokenization platform. So let's say you're using tokenization platform A, right? You assign them 10, 000 tokens. Those 10, 000 tokens equate to something of your company shares, right? Either the common stock or the preferred stock. So you still have to understand the traditional cap table and traditional stock models, at least in the U. S. Right. That's, that's the way it has to work here. Um, and then on the, on the exchange side or on the tokenization platform side, they are then selling those tokens that represent an equivalent share, uh, of either common stock or preferred stock. Generally it's common stock because you have no, no, uh, uh, no voting rights. Boom. There you go. Um, so sorry, Chris, I didn't mean to talk over you were going to ask. So Chris has a couple questions. He said, I've heard that good pitch decks shall answer three questions, whether the world needs the product, or if there might be a need for it at some point, whether this team can complete it, complete it, and whether it's financially making any sense. Uh, what do you think about that? Are there other things that we should consider or write down? So I mean to me two two is easy, right? The second one is the easy one and you have to I think I don't I don't see enough time spent on that, right? You should in your pitch deck talk about your team and like your background and the value that you bring, right? I have six years of Amazon, great, but I also have 28 years of IT, right? I have digital transformation experience. I have solution architecture experience, right? I've been in business leadership meetings. So a lot of those things that, that's hard to just put on a pitch deck. Right. You have to think through how, how do you phrase that? Right. How do you put on there, your value, right? How do you give like a little bio that doesn't just say former Amazon and that's it. Right. I mean, like I could put former Amazon and I'd have credibility. Sure. But I could also put for former Navy. I can put a former Deloitte, right? Any of those add credibility. But the point is you don't use your employer solely as that credibility, right? It's your work at that employer that is your credibility. So what did you do when you're there? Right. That's what I think a lot of investors want to see when they're looking at the team. Um, they're kind of a lot of things I'm seeing from VCs now are, yeah, we get that you were at Amazon or we get that these people were at Facebook or some other thing company. What did you actually do there? Right? So they want to know a little bit more than what we've been giving them traditionally. Um, but again, I think that's pretty straightforward. The financially making sense on the 3rd, 1, that is, that is a general challenge, right? Because. A lot of the numbers you're using are going to be hypothetical numbers. They are going to make sense based on the picture that you present. So, if I take your numbers, yes, it certainly can make sense, right? You said there's, you know, 10 million gamers are coming on board. You're serving a niche market of RPG games or first person shooters. You're creating new NFT model and tokenomics models that weren't there before. So yes, it financially makes sense, but maybe as soon as I start tweaking some of those variables, you know, it's not a million gamers, it's only a thousand gamers, and you're not going to charge 50 a month, you're really going to charge 10 a month, then all of a sudden that model breaks. So, that's been my challenge in general, is that this space is so new, and a lot of times when we're in the very early stages, it's about customer acquisition, it's not so much about customer retention. I think we spent a lot of time, especially in the precede and seed thinking about retention, right? How am I going to keep customers on for a long time? I don't gaming. Of course. It's important, right? You're talking about content. You want to have a good content that keeps people around, but the financially making sense. For a lot of investors in the pre seed and the seed round is about eyeballs. Can, can you get the eyeballs? Not so much. Can you retain them? Can you get them right? Is your game doing something unique? Is is it coming up with some unique story? Is there unique artwork in there? Is there unique gameplay that hasn't been seen before and that's what's going to get new people to come over? They may get bored after two months because it doesn't have that long term retention That's kind of okay, right? Some investors are okay with that. So long as you can clearly talk about how you're you're doing customer acquisition, right? Because that's that's the important part So that was the the two easier ones any any comment? I'll get the first one. No, go ahead I don't want to interrupt your flow keep going so With with the first one right when you think about the the need for the product, right? Or is is there a need for it at some point? That's the one I honestly find the hardest to to To get a clear answer from an investor because the problem is, it's all based on sort of what niche market they're in and where they're currently investing in. Right? So I talked, for example, with a good investor that doesn't invest anything in blockchain at all, but they have a lot of investments in real estate and in, uh, in med tech. And I went through our portfolio. I talked about what we're building. I talked about how we're building it. And they said, yeah, you know, could care less if it's built on blockchain. Why did you even start telling us it was blockchain? You should have told us that these were real estate solutions and we would have happily invested. Now that you said that they're blockchain, we're considering, we're second thinking it. And it's like, well, why, right? If you're seeing value in the solution, why are you second guessing it, right? It's because they don't see value in blockchain. They do see value the real estate side of it. So again, it does go into you know What we said before about you need to know your investor you need to know what they're looking for What is their pain points in their portfolio and their ecosystem in their world? What are the things that they see as the need it's great if you see the need But if they're no longer in blockchain or they don't care about blockchain They only care about real estate and you're not coming at them from that real estate angle Then they could care less. So the, the, the, the challenge I think as founders, right. When, when it's phrased that way, right. What our product is our baby. And we look at it and we're like, everybody needs it, right. Our baby is so awesome. It's so cool. We're doing something so unique. Everybody needs it. Right. And it's so easy for us to find like different use cases, but we're the investor that's sitting on the other side of the table in general, they're, they're looking at and saying, I've already seen this before. I don't, I don't see the difference here. So when you articulate the real uniqueness of what you're doing, that's where that real value is, right? So it's not so much about whether the world needs your product. It's a little bit of that need at some point, right? It's that uniqueness to be able to say. Hey, we are doing something that's unique today And we are going to continue doing something that's unique because we know that what we're building is new, right? It's novel. It's different We're not doing things that everybody else is doing it And if you're doing things that you know, one or two other people are doing that's fine But you're not following the mainstream and the main content there, right? so It's it's a it's a tough one. Um, I would say My my general recommendation is Investors find value when you're really passionate about your building and you have a personal story of why you're building it, right? For example, I have a decentralized version of Monopoly that I want to build. When I talk to investors about why I want to build it, I flat out say, my nephews will not play the monopoly against each other. I cannot get them to sit and play monopoly together. So by building a decentralized version of monopoly where the economies are completely separate but also can play together, my nephews will now play together. Investors are like, oh, you have a personal reason why you want to build this. There's a personal endeavor of why you're going down that path. So that's my one recommendation when you're talking about that first one. That's super cool. If you need any, uh, if you need any testing of this, uh, monopoly, let me know. Happy to grab my kids and we'll give it a whirl. Um, we'll get there. So I, I had, I had a piece of advice that I tweeted out yesterday. So if, if you're a first time founder and you don't have a network and you're trying to go out and raise your, your first round, right? Like either angels or your seed round. My advice was find like five or 10 research, their thesis research, uh, the recent companies that they've backed. Network with those founders. Ask those founders for advice on what you're building, and then once you have a strong enough relationship, ask them for a warm, uh, introduction back into that VC, or like, your product. Um, is that, I guess, what do you think about that? Is that a reasonable approach versus just, you know, cold emailing, cold calling, hunting people in DMs, all that stuff? I mean, look, I 100%. I think that that's the good way to go. Right? What do you think of? Like, there's many different angles that you can go down. I don't want to say that 1 is better than another 1. Yeah. Right. But, but I like the idea of building things through a partnership angle. Right? When you're coming to a founder, you're saying, hey, look, what you're building is really cool. I see the value here. I see what you're doing, right? Have you thought about this? Maybe you're giving, giving them suggestions about different areas that they can go in the product, right? One, they value that feedback that they are like, Holy crap. Somebody is taking their time out of their day. Another founder, somebody else that's also in this space and has given me that feedback. So you ought to, you already earned their trust, right? And that earns trust goes a long way with the VCs, right? Because those VCs have hundreds, if not thousands of pitch decks coming to them per week. And so when, when a founder in their portfolio is saying, Hey, I've, I've talked to this other founder and they got a really cool thing that they're building and I can potentially see how it's going to benefit our product to now that the VC that they're talking to has two reasons to be interested. 1 is because it's a cool product and a new investment 2, because it can probably and potentially bring them more capital into their existing investment. Either through additional revenue generation or other options. So, yes, I 100 percent think that's a great route to go down. Um, so hopefully that answered that question. Was there a follow up to that one? No, I just, you know, that tweet got 15 views. So that's a little unfortunate, so much alpha for 15 views, but it's all good. You know, we're, we're, we're growing advice sometimes takes a long time to find the right ears. So it lives on ephemerally. Don't worry. It'll find the right years eventually. Right. Again, I think that's great advice. If you're, if you're new to this space, right. The, the, the, the idea again of building that trust is key. It's not about quantity. Right. Been through myself and I've seen many other people that have this notion of I'm going to hit 200 investors and of those 200 10 percent should hit that's 20 of those 10%, another 10 percent will likely bid. And then one of those two will go on fine. If you want to play that game of pitching to 200 people, just so you can get that one, go ahead. You're going to spend at least 400, if not 600 hours, two to three hours per investor, it's a waste of time. Right. My, my perception is it's about quality. You made a really good point there, Ryan, about knowing who your investor is, right? If you know who the investor is, you pick maybe those five founders, you know who those five founders, what investors, what VCs they're attached to, right, who they've worked with before. You now, because you know the founder, you know their use cases that they're going after, you know the types of founders that they're going after, and then now you also have a VC and you understand their portfolio. So when you go and talk to them, you're not just somebody that's pitching to them. You're now almost like an insider coming to them and saying, Hey, look, I really want to help you and work togetherly, right? Work together. How can we collaborate? That's awesome. I don't know about you guys, but I'm really enjoying this conversation. Like, I'm not finding this type of dialogue anywhere. And I'm in a bunch of communities, nothing against them. But I just think that there's not enough structure around, like. Bringing people who are new and learning to people who have done it before and could provide the advice. Um, I think that right now I'll comment on that. That challenge, I think, is because we have a lot of people coming from the Web 2 space, right? A lot of people are coming to that Web 2 space. On the, on the business side as well, and they're coming in and saying, Hey, we can, we can do things in the Web3 space the way we've done traditionally. If you want the next hundred million users, you have to do them the same way that we did in Web2. My argument is, that's kind of true. We almost have to do the same things, but you can't do everything that you did in Web2. You have to understand some Web3. For a simple example, you think about marketing. Marketing the, the value of, you know, where does the game sit on the decentralization scale? Is it a hundred percent decentralized versus, you know, a hundred percent centralized? Where does it sit on that, right? A lot of Web 2. 0 people don't know necessarily how to have that conversation and talk about it. Uh, the Web 3. 0 side, right, a lot of times we're cowboys. And we tend to sort of fly by the seat of the pants. So I think that's the idea is we're trying to really focus on, on that middle part and really bring a lot more structure in. Well, well, hopefully, hopefully we can give more and more content to serve those people, you know. Um, all right. So let's see what else we got. By the way. Everyone, if you're new, if you just hopped in, not sure what's happening, this is Shy. He is, uh, amazing. He has an exceptional track record in building companies, helping companies kind of turn around their technological infrastructure, um, past Amazon, past Mayor. I'm saying Mayor. You can't stop me. Mayor. He's, uh, he's building up, I'm gonna pronounce it incorrectly. Incorrectly it. Commons Forge, Kalman's Forge, is that right? No, you got it right. Okay. Kalman's Forge, yeah. Yeah, so it's a VC fund that is really on the cutting edge of tech, including Web 3. And so if you have any questions about fundraising for your project, like literally nothing is off the topic, no question is too dumb, uh, chances are if you're thinking it, half the rest of the audience is thinking it too, so just feel free to, uh, type it or ask live. Yeah, and and I'll say if you're coming at it from the technical angle, I am a tech geek. You can see by the things I build over my head. Um, so any time question, feel free to throw it right? Any kind of investment question. I always come at it from a technical angle. So, you know, my, my focus is really on deepening the tech in this space. Um, and so that's really what I'm building comments for it for right is really to get deeper in the tech. And so. Um, yeah, by all means, I invite everybody to reach out afterwards. I'm happy to really dig into what you're building. Um, because I think that rigor that you talked about Ryan before is really important. Right? Really building that depth into our products. Absolutely. Yeah. I see angry. Oh, gee. Somebody's hungry. I've got a quick question. Sorry. No, welcome. Yeah, I was just. Yeah, I was just going to say, um, uh, shy, like, I'm curious, since you have that tech background, I found this with different VCs, you know, like if you have like the blockchain background, you may be more favoring, like, you talk about the decentralization scale, you may be favoring companies that are further along in the decentralization scale, I'm curious, do you have like a bias like that? Or do you think, you know, are you following more where you think the market is going? And maybe like, you know, Someone 25 percent on the decentralization scale, but with a plan to grow further as the market matures. And as you know, um, the friction reduces things like that, or I'm just curious, do you have a thought process there? That latter, that latter 1 is the key part there, right? The, the decentralization is, is, is a growth that we're going to get to, right? We're right now. I'm worried about, I think 25 percent is a little generous. I would probably say more like 10 to 15 percent of the, of the tech stack is really what's decentralized. Now, that being said, you do have some projects that are pushing higher, right, when, when they decentralize their front ends, uh, and they, they do some of their computation on a distributed network that runs on Cosmos, as an example, they can get closer into that 75, 80%. However, I think at some point, when you look at the stack anywhere, right, when you start getting to the CDN side, uh, when you start getting to the distribution side, at some point, there ends up being some sort of centralization, even if it's down to the client that they're using, and they're, they're, they're only using the geth client and that's it. Thank you. Well, then they're centralized in the geth client for Ethereum. They're not distributing. They're not really decentralized when it comes to even Ethereum clients. So, there's so many places in the tech stack that we can pick apart and say, you're not really decentralized. You're really centralized here, right? This is where your throat is to choke. Um, that will come over time, right? And I think that's the, that's the key part of as builders that we need to understand is that it's okay for us to use some web 2 technologies, right? A lot of the stuff that are is available. It makes us makes it easier for us to do things that's available in AWS or Azure or any other cloud provider, right? We still can't get into the centralized world. For example, if I want to do SMS messaging, I can spin that up in a couple of seconds in any cloud provider. There are some Web3 solutions that are coming, but it's a lot more challenging to get through those. So, that's where the Web2 world is still beneficial, and it's really about builders understanding how do you bring the two together. And then the VCs value that, right? They value people that understand. That this isn't a maximist world of everything is going to be decentralized and, you know, screw the system, right? There's a, there's a handful of those, right? But those handful tend to be anonymous, right? They want to invest in tokenization platforms and they're out there, right? So if you're going for those, that's fine. You know, again, you need to know your investor, but the, the, the bulk of investors really sit in the middle where they're just tired of the vaporware. They're tired of the stories that they've heard in the space. Right? They're, they're tired of sort of like lofty goals of applications. I want to do everything under the sun. And so they want to see a lot more people to understand that you're not going to be, you know, sort of 100 percent decentralized and you're going to build towards that path. So, exactly what you said, right? 25 percent and you're going to go in the future and build it out. I think that's a great mentality. And that's the camp. I said that help. Yeah, absolutely. Thank you. Go ahead. Hangry great conversation. I'm a founder of a web 2, a couple of web 2 businesses and an equally a founder of a web 3 gaming ecosystem that we're building. My question we're in that journey at the moment with the VC and angel experience, which is, uh, you know, brought with ups and downs as we are all aware. But my question is around, um. Yeah, Traction, you know, there's a lot of emphasis and VCs that I've come across are really interested in the traction side of stuff. But if you have previous games that you've built, great. But if you don't have a previous game you've built and you've got a small community, what's the kind of take? What's the strategy in terms of communicating a traction piece to a VC, group of VCs? So, I think what they want to see if you don't already have established traction, they want to see what is your plan to gain that traction, right? How are you going to get into that market? How are you going to grow those customers? Again, remember, it's not about the retention. So, they're not necessarily asking about how you're going to retain those customers, right? They're just asking what are you going to do to get those customers, right? So, how are you going to target if you're demographic? You know, they're looking for things. Have you identified your demographic as an example, right? So, you know, you're targeting 18 to 25 year olds. Okay. Have you have you decided on your tick tock and Instagram campaigns? What does that look like? Right? How are you bringing them from those platforms into your discord channels once they're in discord? And they have an X role of you know guests or something. How are you converting them? Right? So what's your conversion process? How do you take them from somebody that's just interested into something else, right? Is there, I'll give credit to Ryan, right? The way that this Discord server is set up, right? When you come in and you have to go through all these questions, right? That's a great thing for, from like a VC side to see, Oh, that's how you're converting your users, right? You're asking them all these questions, you're getting data points on them. That's part of your conversion process. So that's what they're looking for, right? Is, is, do you have those things in mind and are you starting to execute on those? All right. We've got a couple other questions here. Let's see. Um, so scrolling up here, Chris, uh, thanks for the answers. This is circling back a little bit regarding acquisition. What VCs like to see at the early fundraising stage where product is not yet market ready. When the project cannot show users using the project, uh, is that a focus on social, like Twitter, Discord, uh, followers or participants? Yeah, so, so there's two parts to it, and we can tie, there was a question about the MVP stage and app development, so we can kind of tie the two together, right? I, I think when you're, when you're at that pre seed stage, what some of the investors are looking for is, is really, do you have something that Is going to capture those eyeballs. So a, do you have a website? Right? Do you have the website with a login page? Do you have any socials that are also either just a launched? Right, there's a lot, I don't know why, there's a lot of projects that start up and don't create a Twitter account, they don't create a LinkedIn account, they maybe create one TikTok account and that's it. So, that availability on the other socials is one of them, right? Are you on those socials? Are you posting on there? Do you have the eyeballs, right? That's one thing, that's again customer retention, right? Do you have the right eyeballs on those social channels? And then on the MVP side specifically, As you're building that out, do you have something that you can show and gain that interest? So, is it UI, UX mockups? Right, you might have a website and the website might have like one screenshot and say sign up now. That's great. That's going to help your, your, your customer acquisition. But if you have a white paper, That's going to have even more customer acquisition potential. Right? So again, they're looking for that white paper. If you have a UI UX mock up where it's either like a PDF or mock website or mock application that people can just click through and get a feeling of what that's like, that will add an additional value to the VCs and things that they're looking for. So, ultimately, I think in that precede round, they are really looking to validate functionality. So if you think about it, right, you're coming to them, you're pitching to them. You're saying, my game and my app can do all these really cool things. My team can really do all this. You know, I can show you that the world really needs this idea. And they're like, okay, prove it. Right. So now the prove it is that functionality. Right? You said your game has this really cool unique feature? Okay. How can you prove that it really has that unique feature? Right? Maybe it's a staking mechanism of some sort. And when people stake in your game, that staking causes a mutation of your character or something. And all of a sudden they start mutating at a rapid pace. What does that, how does that rapid mutation affect the gameplay? That sounds like a unique element to your game that's tied specifically to that token ons, which is what you're saying is your unique selling value and your proposition. So what does it actually look like in the game? Right. Show me some screenshots of what it might look like. So I hopefully that was answering the question a bit. I'm happy to elaborate there. Yeah, I think you crushed it. If you have follow up questions along that same train of thought, feel free to share them. Uh, in the meantime, I'm going to share a quick little antidote. So, earlier this year, I had an infrastructure startup we were attempting to fundraise for. But in order to prove its feasibility, we had to have a game to show the tech working. And so we went through the route of trying to fundraise to build this game to prove that our infrastructure would work, right? Uh, so at that time, either because, you know, they just didn't want to say no and be rude. The, the response was, um, you know, you need to, you need to show that you can build an early version of your game and that you can get people interested enough to come in and play it. And then once you check that box, come back to us and then we can talk. So, for our startup, it ended up, like, we're still working on it on the back end, the engineers are kind of doing their thing, but I'm not. You know, quite technical. So, so it leaves me with some free time. So I started doing some support work for a web three game called last resort and doing some marketing community stuff for them. And they've done it. They have built a game. They've gotten like over a thousand people in it on their first public alpha. They've had their first free mint. And I sat in on a couple pitch meetings and they were saying, Hey, look, we've built it. We've shown people will play it. And like me knowing what I know, I was like, great, here it comes. We've checked all the boxes and like. Unfortunately, unfortunately, the, uh, the, uh, the yard post has moved, and now it's more like, that's great, but, you know, it's not, it's not quite what we're looking for. Like, I think the market's waiting for what that next evolution is, I guess. So, I, I think, I think that challenge comes from that we, we, we're leaving it up to the VC, in this case, to determine what that MVP is like, right? Yeah. What they're expecting from that MVP. Yeah. Yeah. For a... When we're having those initial discussions, we should, we should before those discussions at least, have an understanding of what MVPs they've accepted before. Or, I've flat out asked in those meetings, right, what do you expect to see from an MVP? Is a functional prototype where I can walk you through a website and there's not really, you can't really do anything but I can, you can click around and move around through the site, is that enough? Do you want UI mockups? Do you want design? If it's a game, do you want like one level that you can play? Are you looking to play till the end where you reach the boss level? Right. Like what, what is that MVP that you're looking at? And particularly in a game, I think it's about how much polish are you looking for, right. And clarifying what that MVP is. The other route to go, which, which, which I prefer and I like is you decide what that MVP is, right. And find the investors. That align with what you believe is an MVP, right? If you're looking at your game and you think like, Man, I got some really cool idea. Okay, well, what, what do you need to do? What do you need to build to prove out that idea? Because it's, that, that idea is what makes you unique. All the other crap you have, your login menu, and your Web3 wallet, all the other stuff is stuff that we've seen before. And we're like, okay, great, so another wallet, whatever. Right? You're doing a wallet uniquely in your game, whatever. It, fine. It, what is your unique value that's in that game that makes it really unique, and how do you go and prove that value? So, for you... It screenshots may be enough, right? A, a walkthrough of the game might be enough. Uh, a a one level might be enough, right? Whatever that is. I, I think we should be dictating that to the VCs, right? We should be saying, look, this is what we have today. Is this sufficient for you? If, if you're, if you, if it is great, I'll happily walk you through and I'll show it to you. If it's not, well, I don't have additional capital to keep putting money into this and keep chasing your dream, I'm not building a game for you. I'm building a game for this market that I see as an opportunity there. If you want to come on board and you see that opportunity great Then we're happy to take your capital and continue to build up the game. If you're not we'll go find other vcs Um, and the the last comment i'll throw in there is angel investors tend to be more willing to see things before they're fully baked They tend to be more willing to go on the limb and say hey i'll invest things Now the the cautious is that we're not seeing angel investors throw out checks of a hundred thousand two hundred thousand Yeah, like they used to do a couple, you know two years ago. Yeah But they're still giving out smaller check sizes. So, you know, don't only, you know, remember that there's angel investors and there's VCs. There's technically 2 different classes. I like, you know, I'll just go ahead. Go ahead. Start this 1 comment because I thought that was excellent. I love that whole, um, the way you explain that. Um. I recently got some great advice from a founder who was telling me, you know, like, I mean, obviously you have to listen to the feedback you get from VCs. And if you're, if you're getting VCs that you, that you really want to go after and they're telling you, you know, you need to be further along or you need to do this, you know, then certainly take that into thought. But he said, when you're really lining up those investors and, and, um, and you're ready to raise. Don't go on a quest every time an investor says, we need to see X because, you know, they, they may be not allocating a lot or, you know, and they, they want a certain threshold met, or maybe, um, it's just not a great fit. And, you know, you just need to say, all right, I'm moving on to another investor because I'm, I'm going to find one that wants to invest in us where we are today, not where they want us to be in months or whatever. But I thought your explanation was great. Thank you for adding that. I like, I like the swagger in your answers. Like I feel like at times when your runway is running out and like it's you know You need that capital to kind of keep building the thing you can get a little bit desperate and so you're like, okay sure Yeah, I'll chase this stick that you threw in this direction, but I like I like your guys's thought process around that It's awesome. That actually shortens your runway, if you think about it, because what you're doing is you know that your runway is like this, maybe it's like two, three months out, and all of a sudden now you're like this, and then you're figuring out, okay shit, how do I get back to that two months and then extend it out? So it, to me, looked like a really weird way to go around. Yeah, it's a good way to burn some time. Um, Alright folks, so we are, we are rounding this call. I want to be respectful for Shai's time. I think we, we have about uh, five more minutes tops here. Any last questions, comments, concerns that you'd like to ask? And Shai, in the meantime, while they're thinking or typing those out, um, if folks want to follow you, follow your journey, stay in contact, where should they go, what should they do? Yeah, let me drop the uh, if you do through my website, that's probably the easiest let me drop the link here if you're going to try product. com the the links to my twitter and uh, or x and linkedin and uh, Instagram whatever other accounts I have is all there. Um, that's the quickest way to follow me through there Uh, I generally spend most of my time on linkedin. Um, As a techno geek i'm trying to do my part in the web3 world to bring technology to linkedin And more sensible technology conversations So you can usually find me on there I I tend to post more whimsical stuff on Twitter, but yeah, I live around the digital world most of the time. Very cool. All right. Really appreciate your time, Shai. No autopilot. Thanks for hosting. All right, Shai. I think you made it through our litany of questions yet again. No, awesome. I I love your your hosting style. I'm always excited to do this again So thank you for the time and I appreciate all the good questions. Uh, best of uh, not luck Best of fortune and keep driving through and forging ahead. Oh, there you go get there. All right folks. Thanks so much Y'all have a great rest of your day. See ya