How to raise money in the NFT market | Interview with COO at NFTY Labs

What's the next generation of NFTs going to look like?

A lot of the real value is in how you can use an nft, not so much about what it looks like. This is not a bear market. This is not the end. This is just the beginning.

Hey, guys, it's Andrew Thurman. I'm the weekend editor at Cointelegraph. I'm joined here with Titan Inc.

Yes, sir.

Nifty Labs, right?

Yes, that's correct.

I understand it's an NFT platform that's currently under going a raise. So I thought, you know, talking to a young team in Miami, figuring out what the VC situation is like, what it's like trying to get something off the ground in this current climate. So first off, how you like Miami?

Love it. I mean, we're, we just flew in from LA on Monday. Miami is much more vibrant. You know, there's a lot of business being done right now. So I think Miami is really the place to be if you're in, if you're fundraising or if you're just building products and crypto in general. Love it.

Nice. Well, we'll circle back to the fundraising, but I want to hear a little bit more about Nifty. Yeah, I think this is a market that's a little saturated right now with NFT platforms. I think a lot of people had the idea, you know, I'll be the guy selling the shovels during the gold rush.

Right, right.

So how are you guys gonna stand out and what unique products are you gonna bring to the market?

Yeah, well, we saw a lot of the speculative value in NFTs and that's, you know, it's really cool. And I like the punks, I like the NFTs in general with the digital collectible art. That' first phase, in our opinion. But the second phase is really more so about what can you do with an nft? Not so much about, like what it may look like. So what we did is we decided to build, you know, the first NFT utility management platform where you can say, you know, I want to be able to do, you know, this with my nft. How can I keep that in one place for all of my audience to find so they don't have to go searching through my social media or my website to find out how to do that. There are token gating platforms, platforms out there that can let you, you know, assign some kind of redirect of a link of sort for NFTs, but there is nothing out there right now that allows you to just keep all your utility in one place. And so we built a platform for that.

Interesting. And when you say utility, are we talking more of the defi applications or is it the display, the AR VR, having your own personal gallery kind of stuff?

Well, really, it's, it's more so about like, okay, for example, if you want to use an NFT to get access to a private Discord Channel community, for example, or even a private Telegram community, or we're also building plugins for Shopify, so you could take an NFT and immediately get like a 50%, 20% discount on a product in a Shopify store even. You know, we're expanding and adding more applications, but we think of it bigger than just maybe redirecting for a link or something like that.

So, yeah, very exciting stuff, man. Well, tell me a little bit more about what it was like trying to raise money in this current environment. You know, there's a lot of articles going around about how NFTs are dead, the sales volumes are down. Yeah, I wrote one of them about three months ago and it was right. But it seems like everybody's digging up a new metric to try and shovel some dirt on NFTs. What do the VCs think? Are they still believers?

Does it seem like they are? They're more believers in the utility side, which is actually great because that's exactly where we're covering right now. And not too many people really thinking ahead with NFTs. You know, a lot of people are saying, okay, again, you know, very speculative nature, it's all about the art. But most VCs, they're kind of catching on to the fact that a lot of the real value is in how you can use an nft, not so much about what it looks like. So a lot of VCs we talk to, they're very excited about the first NFT utility management platform coming to life. And the rest of our ecosystem, which we haven't even explored, we have more products than just our platform for NFT utility management.

Sticking around, we'll circle back to the utility a little bit more, but I want to hear more about what it's like to raise. There's a lot of young entrepreneurs out there. They're probably listening right now. I think there's a lot of criticism and a lot of maybe even mysticism around raising VCs and the handshake networks. What has your experience been? How can somebody get their foot in the door if they have a great idea and think they want the backing.

Have a great product? First of all, the Big thing about crypto is a lot of the guys that want to raise money, either they're not very serious, or maybe if they are serious, they're getting ahead of themselves and trying to raise funds before actually having a legitimate product that people can use. We decided that we wanted to have a legitimate product that people could actually use and see how it works before ever getting to the point of fundraising. You're competing against a lot of people in this industry, but at the same time you want to make sure that you can actually, actually bring a product to life and show people how it works. So don't get ahead of yourself. You know, focus on like being heads down, building first and then get to the point where you want to fundraise and then just talk to people, you know, and build your network, you know, start reaching out. And it's a lot of reaching out, that's, that's for sure.

It sounds like you did your fair share of cold calling and all that.

Oh, yeah, yeah, yeah. That's, that's B2B, you know, and if you're starting a company in this industry, you're gonna have to wear a lot of hats. You know, you're gonna have to do a lot of different things, but if you really want to and if you competitive enough, you're going to be able to have success in fundraising and just talk to people that are interested in NFT platforms, NFT utility, NFT et cetera. And chances are most of these guys that are in this industry, they're very nice, they're very forthcoming, they're going to talk to you and explore the idea with you and they're going to give you good feedback too. Take the feedback, add to the product and then come back. It's not the end of the world if you don't get the yes on the first day.

I remain a little bit surprised. I mean, it sounds like you guys, I know you can't disclose figures or anything.

Yeah.

But it sounds like you guys are being very successful so far with this round. And this is amid market wide 50% pullback. NFTs arguably hit even harder, although it's a little choppy across the board. But it seems like the company, the money dried up in 2018, you know, and I guess that's just not happening now. That's not happening yet. What do you think that says about the current fundraising space?

I think it says a lot about the future of the industry. I think it says a lot about how serious people are taking not just NFTs, but, you know, Defi, etc, etc, you can actually use, you know, lending protocols, borrowing, you know, collateralizing, things like that in the defi world. And then, you know, NFTs, the next logical step is what you can do with them, right? So people are starting to wake up, they're starting to realize that this is the next logical progression. And yes, we may have had, you know, a 50% pullback in two weeks on Bitcoin, but it's not the end of the world. This is not a bear market. This is not the end. This is just the beginning. And I think a lot of new money, not just existing VC money in the crypto space is starting to realize that. And we've talked to plenty of previously interested private equity firms that are coming in and saying we want some tokens too. Right? Because they realize, look, we're in a long high time frame horizon. We want to be in this industry, we see the value and we want to be in it.

Simple, exciting times. And it probably speaks to the potential longevity of the space then if good projects can continue to raise even in a bear or a pullback, I think that means there is some new health here. Let's talk a little bit more about NFT utility though. Yeah, I'm particularly excited about it. Sounds like you guys are doing social token stuff. NFTs that let you entry to events, discounts on products using NFTs for cool use cases. It seems to me that people are starting to wake up to the idea that NFTs don't have to be static. These pieces of art, these just rinky dink things that may be beautiful, but you can really use their underlying logic as smart contracts. You can use the stuff that makes them NFTs to do a whole lot more with them. It sounds like aside from what your platform's currently doing, you have some ideas for the next steps. And what are you thinking? What are the VCs thinking? What's the next generation of NFTs gonna look like?

You know what really gets me excited is there's a B2C side, you know, there's the consum, there's essentially being able to, as a creator, take your NFTs and redirect those users to whatever it is that they're looking for. Maybe a private community group, maybe some kind of discount on some kind of product or service, maybe even subscription services, which we're also experimenting with. But the really cool thing, and it's something that we've explored recently, is taking NFTs and using them as a primary method of authentication. For bigger databases, think energy infrastructure, think supply infrastructure, think remove username and passwords. Think non transferable NFTs being used as the method of authentication for entire user access control systems.

So an Ethereum address that holds an NFT can access some smart contract system that controls a database or some source of important infrastructure.

Maybe just access, no database needed. Blockchain is already there. Public key signing, Boom, you're in.

Give me some specifics here. What specific kind of applications might this have?

Yeah, so we actually, our pm, Dante, great guy on Twitter investnoire, just shouted him out, shout out investnoire. Yeah, he actually works with some energy or supply infrastructure and the specific use case would just simply be taking an NFT and using it for user access controlled. So like as an employee, you know, instead of a username password, which could be like, you know, obviously a security concern, obviously a privacy concern, you know, instead of using that, you replace that with a hard wallet, you know, hardware wallet with a non transferable NFT on it. And now that is your method of authentication. No database needed, you just use the blockchain security, you know, immutability. You got it all right there. Well.

I think there have been attempts at utility NFTs or products like this before. But I think one of the things that a lot of projects are running into is that even if you have an NFT that has some utility that can give them access to a new product or a new kind of experience, the market's still somewhat saturated and there's an increasing race to achieve, you know, the best business development, it seems like, is what's going to win for NFT platforms. Because buyers, collectors, users, they'll go to any chain, they'll go to any platform, they very rarely have loyalty. And so what are you doing on the IP front, on the licensing front? Who are some of the partners you might bring in for the subscriptions? What can a nifty user expect?

It's interesting, we actually just reached out to some partners we have in Malaysia. Publicly traded company on the Bursa Malaysia Stock Exchange, Great friends of ours, they are going to be opening up our nifty Asia branch. So for a B2B perspective, we take care of a lot of the US and Europe. European B2B, we mostly focus on creating subscription NFT economies, ecosystems. Building your entire ecosystem with your community around the idea of creating that ownership economy, but also having actual use cases for that ownership economy, not just having an nft, but with our nifty Asia arm, we're able to extend out to Southeast Asia example, and where not a lot of the payment or subscription rails are really set up. You know, us, Europe, it's much more established, but in Southeast Asia, not so much. That's why a good friend of mine, Jeff G. Hose at Axie Infinity, they're doing absolutely incredible in the Philippines and Southeast Asia in general because it's a method of ownership, it's a method of capturing upside for a lot of these people. And so a lot of these companies in Southeast Asia, they would love to be able to offer some kind of brand upside or ownership to their subscribers, users, community. When you offer that, you change the game and you offer them a lot of value in the process.

And I mean, that's an exciting notion too, because we've seen what Axie can do for local communities. You know, play to earn is so revolutionary for them. You know, play to use to unlock things has some significant potential for them, doesn't it?

Absolutely, brother.

Well, look, man, really excited for you guys. Love that you're doing cool things in the NFT space. And congrats again on the race.

Thanks so much, man. Page.