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Rally | Alternative Asset Investments💰#RallyApp #Collectibles
Recorded: May 15, 2023 Duration: 1:06:00Space Recording
Full Transcription
You, thank you.
You mentioned, obviously, the platform is NFTs, and I spoke to this about Will probably very briefly a couple of weeks ago in terms of the NFTs on the platform.
What was kind of the, I guess, the procedure and the process to walk us through this for all the, you know, people that want to participate on Rally,
maybe have their items kind of, you know, listed on there or even possibly get a stake on certain products or items?
What's kind of that process through, I guess, a consumer standpoint?
Yeah, so the way that it works now is that anytime that we have a bunch of, like, in the app or on the website, there's a bunch of contact points for us.
So anybody who has any asset that they want to put on Rally, again, we have kind of our internal checklist.
We have a group of things that we're always kind of looking for.
We don't always publish that data because a lot of times we're trying to find the best possible deal so that we can get a great deal for our investors and get the best possible deal for the seller as well.
But what we try and do as much as possible is keep an ear open, and we're always kind of really quickly turning around sort of the yes-no's as best we possibly can.
So whether you want to buy something off of Rally and put it in a private collection or put something on the platform, there's a few ways you can do that.
If you submit any asset, typically we're looking for, like, you know, the images, the provenance, any details, receipt, authentication, documentation, whatever you can put in an email, really quickly send over.
Our team kind of mobilizes quick, and we have all the data, public and private, around kind of pricing, around the economics of an individual asset, a range that we have in terms of what the price that we deem realistic if an asset is kind of checked off and hits the checklist that we have right now.
Then we work quickly to either, A, if we can make an opportunity to sort of purchase on any asset and we can do something where it makes everybody hold, that's something we'll always kind of keep on the table.
If somebody has made some money on paper, maybe, or they really care about something and they want to still maintain equity and be part of the community but want to list it on Rally, we have the option for kind of a shared equity model where maybe you keep 15% or 20% of it, the other 80% of it gets listed on Rally.
And then we can do real consignment models, too.
We have great kind of relationships, not just with our users and with our platform, but with auction houses and a bunch of people in the space where sometimes if it's not for us, we might be able to point you in the right direction of somebody that it is for.
And that goes for everything from NFTs to cars to everything in between.
So we try and keep kind of a lot of optionality for an individual who wants to list on Rally, but we also want to sort of create relationships in the space.
I think that with NFTs in particular, everything is so new and, you know, the people who've risen to the top of that space and have to kind of are really relevant or in a lot of the conversations right now are people that we try and maintain contact with because if it's not a right now thing, there's always a chance it will be in the future.
So we're always trying to sort of keep in contact with everybody who has big collections or has sort of insight into a space to make sure that we're not missing anything along the way, too, you know.
That's awesome.
Rob, you mentioned the NFTs, and I'm glad you guys are kind of looking into this more in depth.
I think this is something that will probably be very fruitful for everyone and collectors and investors probably in the next 10, 15 years I'm being absolutely, you know, more, I guess, more on the conservative side and saying about 10, 15 years.
Right now on the Rally platform, what kind of NFTs do exist and to what capacity do they exist?
Yeah, so we've got, you know, around 25 or so of what we consider kind of the blue chip and the big market NFTs.
And it started with CryptoPunks, and that for us, I think, was a moment in time where everybody here was really paying attention to what was happening in the NFT space.
Everybody was kind of buying and selling and kind of putting things into their wallet.
And it was a new experience for a lot of people a couple of years ago.
And I think it kind of caught the attention of everybody here really quickly, where we want to make sure that we got to start when we started fractionalizing NFTs.
We did it as securities.
We had to submit all this paperwork and these offering circulars to the SEC.
We had to have everything kind of buttoned up.
And CryptoPunks were the path of least resistance for us, but it was also the one that was starting to have this meteoric rise.
So we had bought CryptoPunk 9670 really relatively early in the, I believe it was like the $40,000 or $50,000 range.
Whatever the case was, we wound up IPOing it for the same price we bought it for basically, and it had already doubled in value at that point.
And that's kind of started us down this journey of trying to make sure that we're finding the best possible assets because then a lot of the times it became kind of binary outcome that everyone was expecting.
You started getting that crazy meteoric rise and apes and everything associated with it.
And we wanted to make sure that we weren't just grabbing any and everything.
So we were looking at traits, individual characteristics of NFTs and making sure that anything we put on platform was interesting now, but will be interesting in the future.
And knowing that typically these meteoric rises, they turn into where we are now, where there's going to be a pullback at a certain point.
It's just natural for that to happen with any new marketplace.
But then we also started thinking about, because nostalgia is so important for us, the idea of a rookie card is so important for us.
So even though we had, you know, crypto pumps, which I still look at as the rookie card for NFTs, and we had a bunch of, you know, board apes and a bunch of the big projects.
We started doing E&S domains, and we made sure that anytime there was like an airdrop or anything associated with any of these assets,
that went back kind of as a dividend check to investors, we started doing the, the, the kind of Genesis moment for a lot of these NFTs too.
So we worked with the, the, the cool cats team and made sure we got some of the original sketches from Klon of those original blue cats.
And that became, that sketch got graded by PSA and became an IPO on rally.
Same thing with V friends and with Gary V and some of the early, some of the early sketches that he had, which turned into, into individual investments on rally.
So there's this ecosystem that exists outside of just PFPs.
We took, we started with PFPs and kind of moved into the best we could, the whole ecosystem associated with NFTs.
Where the, where we, what we do in the future and what NFTs look like around in the future, I can't say for sure.
We launched our first project, which was really called the Future is History with Pixel Hall of Fame, was a great digital artist and kind of 8-bit and 16-bit artist.
And we did it in a way where it's got physical tie-ins the whole way.
And that was first started with a bunch of giveaways.
And then we did it where there was a trading card set, which just came out of and was really excited about, which had relics and kind of pieces of history in those trading cards.
We're doing a lot more in real life activations that go along with it with our new museum.
So that for us, like, I don't know what the future looks like.
I wouldn't trust anybody who said they knew what the future of NFTs look like.
But I do believe that there's this on-ramp that we can be a really big part of that everybody's talking about forever.
I'm not going to say, you know, web two and a half or talk crazy like everybody else does.
But I really do believe that this on-ramp includes a lot of people right now who are just intimidated on the sidelines looking in.
And for us to take those steps, it required us doing those blue-chip NFTs and the PFP projects to start.
Then it moved into ENS domains and the things that I think people recognize because they have that look and that feel of the past, but it has this new technology.
And we did a lot of that nostalgia and the initial genesis and the sketches and the real-life projects.
And now the next step is for us to tie it all together, which we're always paying attention to the space to make sure that we can cover that.
That's awesome. Rob, I am personally happy and excited that you mentioned vFriends.
I currently do own two autos from Gary V's, you know, second, I guess, card deployed distribution.
So that's great to hear stuff like that as well.
Obviously, all of what you mentioned, Rob, they're all kind of PFP projects right now, PFP brands.
Do you kind of see, obviously, there's no right answer for this.
No one knows the answer, as you said.
Everyone who says they do, probably lying to your face.
Do you kind of see or foresee, you know, PFPs kind of going in the other direction?
Where things become more physical for NFTs?
Or do you see things kind of maybe becoming PFPs?
Because at every base level of any human, I guess, self-expression is at the very, I guess, pinnacle of everything.
Or do you kind of see it going the other way?
Or do we kind of see it with the PFP concept moving forward?
I mean, I don't know.
I think I'm confident that in the future, we'll say, we'll use terms like PFP and NFT way less.
I think I really early on, this is sometime like early last year, I believe, I was talking to Amber Vittoria, who's like an awesome in real life artist, but also is a really important NFT artist, too.
And she's somebody who's not necessarily building, you know, the same thing as Jack Butcher.
She's not doing things where it's incredibly complex.
She wants the art to kind of speak for itself.
And her thought process, which I agree with, was that early on, like we were calling MP3 players, MP3 players.
Like it was like this crazy, absurd thing to say that no one would ever say now.
Now it's just everything's on your phone.
You don't call your phone a camera.
You don't call your phone an MP3 player.
It's on your phone.
And that's just like the vessel that everything lives under.
I think that Web3 will kind of become that at a certain point.
I don't think we even use that term.
But I think it's human nature to make, you know, riskier decisions when things are really good and you're comfortable.
And PFPs made that really, really comfortable early on because I'm seeing this thing that looks and feels more like a cartoon.
It's got a community built around it.
Sometimes they're cute.
They're interesting.
The art is great.
But also there's this promise that something great is going to happen in the future.
I think some people delivered on that.
A lot of people didn't.
And that's kind of got us to where we are right now.
So now you see this second wave, which in my mind is kind of a pullback where you need more physical.
You need more things that don't allow for the naysayers and people who said, I told you so, to just broadly get away with it.
You have to keep building that technology and you have to build it in ways that's familiar to the majority of people.
I think that's what we've tried to do here.
And I think the most successful brands, and I'll credit Gary Vee and VeeFrance to a lot of this, for what it's worth, for all the polarization that comes with everything that Gary Vee does.
He's done a really good job of making sure he's not leaving anybody behind and that people who want to be a part of this space but maybe are intimidated by the crazy super liquid conversation discords and the more complex projects get an opportunity to have physical in real life activations and physical cards and pieces that go with it.
So I think that's an important kind of – I think what technologists and people who are really early in building the blockchain and building the space might look at as a couple of steps backwards from where we want to be, I think to get to that truly fully trustless, get to a place where everybody kind of gets everything they need out of Web3, you have to have the moment that we're in right now that mixes that physical and that digital.
Definitely a great point. I have a personal take, and I think it's a little bit kind of coexisting with yours.
I feel like we just kind of – social media, I think, is in its infancy at scale.
I think Twitter, Instagram, Snapchat, obviously the apps kind of change every four or five years, seven years, whatever it may be.
But I feel like in terms of the way people are operating on them, I guess the way that they're operating in terms of volume and what they can possibly do on them is changing at a rapid rate, especially with AI coming into the mix now as well.
And I believe that the digital landscape is only going to get bigger and longer.
I feel like more and more people are spending more time online in a sense that you're kind of glued to your phone.
The attention is all there where it is.
So I foresee these PFP projects, PFP brands rather, I've got to stop calling them projects or brands.
Effectively, I think they will probably still exist.
And I think as long as humans want to express themselves, the same reason that I kind of go nuts when I see someone wearing a Patriots hat, I'm a huge Pats fan.
I think it's the same way that these people will do the exact same thing with these NFTs.
It's almost – Rob, to me, it's almost a form of signal calling.
Does that make sense?
That's kind of the way I perceive these NFTs, kind of let them know, hey, man, I own this.
This is kind of a, quote-unquote, flex.
This is what I'm doing right now.
This is how much I'm, quote-unquote, worth.
This is who my friends are.
This is who I kind of associate with.
Same thing when you go watch a hockey game, basketball game, you go to a bar, you go downtown, whatever you do.
You kind of stay in the calling of what you're wearing as a very self-form of expression.
And that's what, to me, these NFTs are and what they possibly could be in the future.
I just think I have a little bit of a take here.
I just kind of feel like the barrier to entry on some of these things are a little bit too high for my liking, which I think is what your platform is currently solving in terms of kind of creating that fractionalized equity stake, I guess, ownership, which I think is very, very attractive.
Because the majority of people, Rob, I mean, Will, too, they can't really afford to be AYC for $100,000 or even a mutants at $30,000, whatever it may be.
It's just not attainable.
And I think that giving kind of an equity stake or percentages and kind of having whatever it may be, some ownership fractionalized, whatever you want to call it, on your platform is definitely something I think will bring the masses.
But I think going back to kind of a next question I have for you, Rob, is so obviously you guys have NFTs on the platform, which I'm a huge, huge fan for.
Have you noticed, or maybe you haven't noticed, I'm not sure how you kind of get this data, has there been much kind of cross-pollination from, I guess, those that are, I guess, OG collectors of physical goods than those that are kind of NFT heads, kind of digital collectors?
I'd be kind of mixing in the middle.
Have there been kind of many inquiries about NFTs, people trying to learn on the platform what NFTs are?
Has there been really much, I guess, curiosity is what I'm trying to ask.
Yeah, 100%.
I mean, and you hit it on the head, too.
I think the reason that we've seen that cross-pollination, sorry, is very much just the Patriots hat.
It's seeing, like, that's my guy.
That's someone I've walked down the street.
We don't know each other, but I know that we're both thinking at least the Venn diagram has enough overlap to have a conversation.
I think that we've seen with NFTs on Rally, you know, in the first few months of us putting NFTs on Rally, we onboarded 15,000 new investment accounts, and that was based purely off NFTs.
It was off, you know, our first two Bored Apes, which I think onboarded, like, 60-something hundred new users just from opening that investment.
And then our first CryptoPunk, which was the first NFT that we did, that had something like, you know, 4,600 unique investors that were very much the first time they made their investment.
And that was, at that point, more owners than individual CryptoPunks.
So it was something where it was pretty obvious there was something there.
I think for us, it's rare that something new captures the entire spectrum of conversation.
And NFTs did just that for us.
I think in the beginning, you know, with NFTs in general, there was money and art, and there were these big brands trying to kind of catch the tailwinds of this new cultural phenomenon.
And there was an opportunity for a million things to happen.
And then real money started to get made, and that got publicized, and millions of dollars are transacting in this very polarizing space.
And that's part of why I was bullish back then about NFTs in all respects, and I'm bullish about it now.
It's collectible art all the way through NFTs used purely for utility.
And that'll change, and that'll kind of come to its own at some point in the future.
But it's an opportunity for everybody to understand some part of it.
And I think when you get the good, really good – I don't want to say projects either – the really good brands and the good platforms that come out that at least do something for someone the way they didn't expect and bring that community together, that to me is when it becomes kind of like you can build an investment thesis around that.
Because you see all these people who kind of look and feel a little bit like you doing something new and interesting, and they're inviting you to be a part of it.
And the cost to entry on a place like Rally is, you know, $10, $15.
And that got a lot of people in my mind invested in a way where it's not just the money.
They're invested in the conversation going forward, and now they're paying attention to NFTs.
And that, to me, is not a novel concept to say that that's what's going to bring it to the mainstream.
But to me, I still truly believe that.
And doing something familiar to a lot of people, whether that means transacting with a credit card or with ACH and debit card, or doing something familiar in a way where it looks and feels like something they remember from their past,
or doing something in a way where it only costs $10 or $15 or $20 to be a part of something that's worth $100,000 or $200,000,
are all these little check marks for us in sort of bringing people who weren't expecting to invest in an NFT into a space that now gets really, really sticky once they're inside.
That was definitely a great take.
And I am disappointed in myself and the rest of the space.
We had no idea you guys were onboarding that many users, Rob.
That's absolutely amazing.
I personally didn't know that, but I'm happy to hear that now that that's great news.
And I think that the process of even purchasing an NFT, whether it be $5, $0.06, $100,000, the process, it's way too difficult.
You have to tell people, okay, man, first step, go on a centralized exchange, KKYC, whatever.
Now, get a MetaMask, get a TrustPal, get a TrustPal wallet, get a SavePal wallet, whatever it is, get a Trust wallet, all these other wallets.
Send money, send ETH, send it from there to there.
Now you got to go and open and see one of these exchanges, purchase it, put it back in your hot wallet.
Now you got to get a cold wallet to make sure they're secure.
The process, there's too many steps.
To me, it's not seamless enough.
Obviously, I've been at this for about a year and a half and a couple of years, so I'm very kind of more familiar.
But for the first-come-first users, it's way too complicated.
I feel like that's what you mentioned earlier in the space that we know what Topshop did on the Flow blockchain.
There was completely seamless.
You could actually use your fiat money just kind of onboard and off-ramp, which took a little bit of time, but obviously it's working now.
Just kind of purchase those NFTs on the blockchain right there and then with your actual fiat money capital and not so much kind of go through these 6, 7, 8, 9, 10 hoops, which is, frankly, a pain in the ass for especially new investors.
And I feel like it even scares people away, to be honest, in my personal opinion.
I kind of want to avoid doing that.
And it's also great that, Rob, to my knowledge, you guys obviously do operate on fiat as well on your platform, so people can just purchase these NFTs or fraction these NFTs with their fiat money and actually don't need Ethereum or Matic or Solana or these other kind of blockchains capital.
Yeah, correct.
And I think that part of it – and it is – sometimes it's frustrating that we're all talking about, like, on-ramps now, you know, two and a half years later.
But in reality, I think that everybody wants this entire space to move at this meteoric speed, which is just not tenable.
I think that we saw it in the on-ramps that you just described in 2021, which relied heavily on third-party wallets and Ethereum for payment and early VIP access to popular projects and transaction fees and all these pieces that were just like –
you know, when Gas got crazy to try and explain, like, to my dad who was purchasing an NFT, like, nah, that's a separate transaction fee that you're not going to pay.
And he's like, but I thought there were no transaction fees because I'm doing this on blockchain.
It's this promise of the future.
It just – to explain it doesn't work like that to people.
It's easier to get them in in a way that they're familiar with and then to have some customer service associated with that so it's not fully trustless.
It's not some centralized chain.
It's not something where we're trying to, like, be in between you and your transactions.
I would love to get to a place that is fully trustless, but to get there requires making sure that you don't screw people the first time.
You can't have something where someone's got a hot wallet.
They just spent $10,000.
It's gone tomorrow.
And then they're trying to email MetaMask, who doesn't have customer service, to explain what happened.
And it's just never going to be that way unless we get enough people on the outside just looking in to not be intimidated and make that first purchase.
And that, to us, was the biggest part of putting NFTs on the platform, which also led to other investments in tangible things and other investments in more NFTs.
So, to us, that was a success.
Great point.
That's definitely a bunch of great points there.
And moving forward as well, I know this is I've done my personal research on alternative investing.
I do take, I guess, my most expensive collectible is probably about $10,000, $20,000 a physical route.
And I do kind of, I guess, partake in alternative investing, obviously, to a certain degree because I'm not.
I know I have to be conservative with my approach on certain things, but I do kind of get involved.
I know that, Rob, I believe that there's statistics out there that actually some collectibles have outpaced the S&P, which is actually very kind of profound if you think about that, that these collectibles that people thought that weren't actually worth anything one day are now kind of outperforming the stock market.
Rob, do you know about that data or things that actually may outpace or kind of the user base?
You've kind of seen more on your platform scale within the past 12 months despite being less liquid.
Have you seen kind of the, I guess, a surge in the alternative investing market, especially in collectibles?
Yeah, I think we've also seen, we've seen that and we've seen that from day one.
But what we've seen over the course of the last year where liquidity did dry up in a lot of markets and in the collectibles market, you saw a lot of people go into defense mode.
And we saw something similar on Rally, too.
And to give you the details around what we've been doing, we're not in a situation right now where we want to sort of take unnecessary risk for our investors.
And I think that it's our responsibility to make sure, A, we're always still sourcing the best possible assets and we're finding assets and we're finding collectibles that make the most sense to an individual's investment thesis.
But also, again, back to the first point, making sure it's something that's relevant now but will be relevant in the future.
What we've seen on Rally is that we've had a lot of great exits, full buyouts of assets over the course of the last year and a half or so where people come in, one collector with a big checkbook wants to buy all the shares.
It goes to a vote with our investors.
And if they say yes, it exits the platform typically.
But we're also in a situation where the best in class assets are the ones or the blue chip assets, the ones with the longest history are the ones that are getting the most attention right now.
So where somebody might have had 20 or 30 or 40 individual assets in a portfolio, what they're doing a lot of times is that if they can get liquidity or they get a sale out of one or two of them and they're putting an ask up for a few of these assets, the money is not necessarily even platform.
It's going into the assets that have the longer history or that have had the returns over the course of this bumpy road over the last year.
So things like our copy of the Declaration of Independence, which has doubled in price since we first did the IPO about a year, a little more than a year ago, a little less than a year and a half ago.
So they're going to our Honus Wagner card, which is one of the most important baseball cards of all time.
But it's also one that historically, you know, this is not investment advice, but one has never been purchased and sold for less than it was purchased for in its over 100 year history.
They're going to assets that, you know, are dinosaur fossils and things that have been around for 60 million years.
So what we're seeing is that there's real there's real work being done by our investors to A, find arbitrage opportunities in our secondary market, but B, consolidate into the assets that maybe they weren't thinking about when they first got here.
Maybe they came in for an NFC. Maybe they came in for something that maybe has a different type of risk profile, was going crazy in the moment like Pokemon.
They'll get back to it and the money will still be there.
But they're trying to find sort of assets that make them a little bit less concerned about the future, knowing what's happened in the past.
So we've seen way more of that over the course of the last six months in particular.
But what's encouraging is that we still, you know, I see a lot of people in the audience now who are part of our platform and that we talk to on a regular basis.
We're trying to go in the direction that our community is pushing us in without sacrificing our quality.
So finding the assets that have that long history, the ones that typically you would put in a conversation of outpace the S&P or do better than gold.
But we also want to make sure they're relevant because that's the one thing that as much as every financial institution,
every family office and every hedge fund will say all that matters is the numbers.
You see that you see the data when it comes out.
Another report came out just last week.
I believe it was it might have been Goldman Sachs or Morgan Stanley or one of them.
But they interviewed a bunch of family offices about alternative assets, and that includes collectibles.
And it was something like 30 percent of the respondents said that the first the reason that they make that that first kind of look at that first investment is based on emotion.
And to hear that from people who are really controlling a huge portion of the wealth is is reinforcing the fact that this is this type of stuff is more important and more interesting now than just a ticker symbol.
And I'm confident it will be in the future, too.
So even in these moments of consolidation, looking toward the future at the assets that matter most is just as important.
And the relevance is just as important as the historical returns, in my opinion.
That was very, very powerful, Rob.
That was very, very powerful.
I mean, effectively, as long as the culture is there and relevancy, as you said, there will always be a need for collecting these alternative assets.
Rob, for those listening right now that want to get involved, let's say, on the Rally platform, how does one get involved in the Rally platform?
And what's kind of that process in order to kind of get, I guess, a lot of the platform and start being, you know, start being active with your liquid?
Yeah, if you want to sort of, you know, download the app, it's Rally Road in the App Store.
RallyRD.com has all the links and information there.
But, you know, it's free to use.
There's no commission on trades.
There's nothing set up right now where if you just want to browse and not add a social security number or go through the KYC process, you can absolutely do that.
We're trying to make that process a little bit more smoother as quick as possible.
But it's like a two-minute process to go through name, email address, phone number, social security number.
It sets up the equivalent of a brokerage account and allows you to start trading immediately.
And we have a bunch of pieces in place right now to get access to cash quicker and get to the secondary market quicker for new users in particular.
And we're trying to shrink that process down over the course of the next couple of months as well to make it even quicker.
But that said, it's, you know, inside the app right now is around 450 assets.
It's basically a living museum where it's everything, again, from NFTs all the way back to 60 million-year-old dinosaur fossils and everything in between.
So there's really in the 24, 25 categories we have right now, there's definitely something for everyone.
And all the information is laid out there, the full story, the charts and graphs around price, the timeline of that particular asset, all within these individual kind of asset pages.
So we're always here, too.
Like our customer service team is, in my opinion, like the best in the business.
And, you know, our head of CS and Brian Kroll and everybody who's kind of working nonstop on the off side to make sure that all the information is where it needs to be.
They're also there to kind of handhold a little bit in a way that if you need more information about anything happening on our platform, the way it works, all the way into the individual asset details, like we're always really, really quick to respond.
And we always want to be a part of that conversation, myself included.
That's awesome.
Rob, I feel like you might know the answer to this question, and I believe in creating wow moments.
I think wow moments are great for everyone, those telling it, those listening as well.
To record up to date, what has been the greatest, I guess, the largest asset in terms of, you know, capital number figure that's been purchased right off the platform, all by one, you know, consumer, all by one investor,
or the biggest item in terms of, I guess, number value, dollar value that currently sits on the platform?
So the answer to that question is probably the same asset.
So there's a declaration of independence on Raleigh, and there was – everybody knows the main declaration of independence that, like, John Hancock's on, and that's in the Rotunda in D.C.
There were around 20 copies that got printed for individual – for every individual town that was kind of important, that had a big enough population that they need to know what was going on in July of 1776.
One of those is on Raleigh.
It was a $2 million IPO.
There was a buyout offer almost immediately for $2.6 million that got turned down by investors, and right now it's trading at $4 million.
That's kind of the one that's driven a lot of conversation and has the most active secondary market right now in terms of volume.
There's been around – I believe it's $10 million in total order volume since the IPO, and around $1.7 million, $1.8 million is transacted.
So, you know, basically half of that asset has been liquid from day one, and there's a really consistent bid and ask and a really tight spread in that particular asset.
And then along the way in terms of exits, like, we've made a bunch of records along the way.
The most expensive, you know, Jordan Concords ever sold.
We had the most expensive soccer card of all time.
It was a pay late rookie card, which exited for $1.3 million off the platform and got everybody back around, like, 500% return from the IPO.
We set the record for the most expensive video game ever sold, so we had a 9.8 graded sealed Mario Brothers from one of the earliest print runs, the original Super Mario Brothers video game, which was an IPO on Rally for $150,000 in 11 months.
It wound up getting a buyout offer for $2 million and wound up being the most expensive video game ever sold.
That's in a private collection now.
So while we're always trying to maintain this secondary market and make sure it's active and liquid and that we're getting the best assets and kind of the best people involved,
we're also always kind of making sure that if there's an opportunity to exit and see a significant return for investors in one swoop, kind of like that with one big buyout, then we're always kind of testing the waters there, too.
We're doing that at auction now, too, where if there's something you feel like as a user should go to auction, enough people say it should, then we'll find kind of an interested buyer for it.
But everything is basically for sale.
So we've had 65, I believe, buyout offers at a premium from the IPO for individual assets, of which around 42, I believe, or 43 have exited.
And the average return on those is around 60%.
That's awesome.
I hope to give some of the listeners a wow moment.
That was definitely a wow moment for me.
Rob, I hate to ask this question, but I'm going to ask because obviously you're very in tune with the culture, and I appreciate that.
Also, the NFT culture, I think it's very important.
Obviously, there's this new trending of conversation currently happening in the NFT space at scale, which is that lending is now the new proper thing that people are currently doing.
I have a take on that.
Probably not the smartest thing to do, leveraging the most volatile asset in the world for another asset.
Obviously, value does not participate in lending or leverage.
Correct, Rob?
Correct.
Awesome.
Yeah, that's great.
That's great for investors as well.
I mean, if you don't have the capital, you can't play with the game, which is typically better than leveraging stuff you don't have, which can get pretty sticky moving forward.
Rob, you're okay with answering some questions here?
I know we kind of went down in the hour.
You're okay with some community questions, yeah?
Absolutely.
Perfect.
Ayesha, how are you doing today?
Ayesha, we've got a quick mic check on you.
Yeah.
I do have a question.
Perfect.
Go for it.
I'm curious to know whether anyone is able to invest in a particular collectible listed on the Rally platform or whether investors will be screened and only those who are interested and passionate about a specific collectible will be allowed to invest in it.
That's a good question.
We want to make sure anybody who wants access can invest.
So we don't have any kind of outside of the KYC and AML stuff that is required by our broker-dealer to get through the process.
And that just goes down to making sure that everybody is who they say they are.
We don't do any additional kind of like membership checks or anything where we're getting on a phone call to make sure you're suitable.
We want to make sure that financially, obviously, you're in a position where you're not going to extend more than you have.
So part of the requirements are, you know, no more than 10% of your total net worth into assets and there's some elements that go with that KYC check.
But anybody, you know, we created this for ourselves because there were no real on-ramps to get the best-in-class stuff without having those connections or knowing somebody in the auction space.
You're being allowed to be in the room with the asset and the collectible.
So we want to break down those barriers.
So you don't have to be accredited.
You don't have to sort of, you know, you have to have a social security number or an EIN number, a business account, a business tax ID to invest in assets on Rally.
But there's no additional kind of membership checks or anything that goes along with ensuring that you're passionate.
We hope that everybody's passionate about these assets.
But if you're coming to Rally with an investment thesis that's about, you know, zero-sum game and binary outcomes to just make money or to be a part of this process, it's here for you as well.
We can't guarantee returns, obviously.
We want to make sure that if you do care about these assets, that we're telling the story appropriately and that you can be a part of it from day one.
Thank you so much for answering.
Thank you, Aisha.
Venise, how are you doing today?
Quick mic check on you.
Yeah, I'm doing great.
Okay.
So, yeah.
Can you hear me?
Absolutely.
Okay, I have a question, like, in the scenario where there are fractions of an asset owned by multiple individuals on Rally.
What is the protocol or mechanism in place if one owner decides to sell their share?
Will the remaining owners of that specific asset have any priority or preferential treatment if they wish to purchase the selling owners portion?
Or will it be an equal opportunity for all investors to acquire that share?
It's a great question.
So, it's equal opportunity.
So, everything that happens in our second-day market is based on bid and ask.
And we don't live in between that.
There's no market maker there.
So, if you're listing your shares for $50 and I want to buy shares for $50 and I'm first in that queue with my bid, then I'll likely get those shares.
In a situation where an asset exits entirely, if 51% and somebody makes an offer to buy the whole asset, if 51% of those investors say yes, at a minimum, it goes to our third-party advisory board who kind of ratifies the sale at that point and gets everybody paid out.
So, we always try and do in those full exits, we want to make sure that we're taking into account the majority decision.
There have been a couple of kind of close votes over the course of the last, you know, three, four years since we started that process.
But the majority of those offers have gotten votes that are greater than 75% in terms of approval to sell or wanting to keep it on platform.
So, we always go majority in terms of the bid-ask in our secondary market.
That runs as a free market.
So, if you're in the big queue, you know, at $50 or $60 and somebody comes in with a $40 ask, you're likely to get placed ahead of others based on the price you're willing to pay.
But we try and make sure it mimics the equity markets and looks as much like standard bid-ask as possible.
Hopefully, that answers the question.
Yeah, that completely answers my question and thank you so much.
Thank you, Venice.
Captain, what is going on?
Can we get a quick mic check on you?
Yeah, quick mic check, Andrew.
Can you hear me?
Perfect.
Loud and clear.
All right.
Thanks a lot, Andrew.
Hi, Rob.
I wanted asking on your Frequently Asked Questions segment of your website.
I actually saw where you guys actually said that.
Captain, I might have lost you for a sec there, dude.
Captain, can you repeat the question?
Yeah, I'm sorry about that.
I was asking that I can see here that after 90 days, investors can run the chance to share shares in-app or add to their position through bid-ask trading.
But before that, yeah.
I'm sorry about that.
Before that, you made mention of the fact that you can verify noteworthy items that you can be able to carry.
If I wanted connecting these two, can a bidder that actually has a high-value asset point out to you guys an asset that could be potentially valuable and hence make a bid for it?
Yeah, so I think the question was around submitting assets to Rally and the IPO process between the investment and the secondary market.
So anybody who has any asset should reach out.
It's hello, H-E-L-L-O, at rally, R-A-L-L-Y-R-D, rallyroad.com.
And one of our investment kind of – our asset pros here will look through it and make sure that it kind of meets the standards that I talked about earlier.
And if there's a deal to be made, we'll always make sure that we're in that conversation.
In terms of the way that the process and what happens after, regardless of whether it's purchased outright or whether it's consigned or anything in between, we run that IPO process similar to the way that –
Oh, oh, all right.
Cap, are you there?
Cap, can you hear us?
Rob, I think he's stuck in the blockchain.
Cap, can you hear us?
Anyway, I'll give the long story short.
I think the answer to your question is yes.
It would be what you're asking for and anyone who has a high-value collectible would love for them to reach out.
And the second part of it with that 90 days that you brought up, that's after the IPO is complete, the equivalent of kind of minting out or finishing an IPO of all the shares being bought.
But there's that lock-up period in between where we make sure it's kind of like a cooling-off period where we're always surfacing new information about individual assets, what could affect price, before it opens in the second-hand market for trading, which is when bid-ask opens up afterwards.
Awesome.
Thanks, Rob.
Hopefully, Cat heard that.
He wasn't stuck on the blockchain.
Yeah.
But DM me if any other questions you have.
Go ahead, DM me.
I'll be happy to answer.
Thanks, Rob.
That was an awesome answer.
It's really cool.
It's cool.
I wish you guys the very best, and I hope that Rally stays bullish on the watch.
Thanks a lot, Andrew.
Thanks, Rob.
I appreciate that.
Thanks, Cat.
Rob, we'll get one more question in, and then we'll give you the floor after the last question to kind of bring some stuff up maybe you're excited about, things you guys are doing in the future.
Raman, can we get a quick mic check on you, please?
Yeah.
Can you hear me clearly?
Awesome.
Loud and clear.
Okay.
So on your website, it is stated that currently Rally is restricted to individuals who possess United States Bank account.
Identification and address within the United States.
I'm curious to know which country or region Rally plans to extend to next.
Additionally, I'm also wondering whether Rally is exclusively purchasing collectibles from the individuals who are the residents of the U.S.?
So we accept assets from anywhere all over the world, and we're quickly kind of making strides to make sure that this is an international product as well.
So over the course of the next six months, we'll have a bunch of updates.
Anywhere there's a group of people who feel like they want access to these assets, no matter what country it is, is a place that we want to be and that we intend to be by the end of 2023.
But in reality, each individual region has their own kind of laws and their own kind of broker relationships that we have to get feet on the ground to make sure that wherever we go, because these are kind of regulated assets, that it's not something that just shows up and that potentially skirts regulation or law.
So that's part of the process and why we haven't jumped in yet, but it's a huge focus this year.
So we'll likely, you know, I don't want to jump too far ahead.
We'll likely be somewhere in Europe to start, and then quickly, soon after, we'll expand to other countries and other regions.
Awesome. Awesome. Thank you so much, Francie. Over to you, Andrew.
Thank you, Rom. I appreciate that.
Rob, I want to be respectful of your time as well as your team's time, and a special thank you to Will for helping hook this up.
But I do appreciate that, Will. It was great to chat with you a couple weeks ago.
And, Rob, obviously, it's great to have you guys here today.
Guys, we are kind of winding down the hour, about a minute to three.
I want to be respectful, as I said.
Rob, is there anything that myself or the community didn't kind of question or ask upon you guys are excited about?
Happy to hear all that great stuff before we kind of wrap this thing up.
Now, biggest focus right now is the launch of this physical museum.
So we'll have around 4,000 square feet. It's at 446 Broadway here in New York.
We're going to have dinosaurs inside and cars and a huge NFT build that goes in the back.
We're having an autonomous NFT project where you'll be able to come in and build from scratch on a canvas that has a lot of nostalgia around it, too,
that I think a lot of people will recognize from kind of 90s technology.
But we're building this out in a way that we really want to be a community space.
We're going to do a lot of stuff around NFTs and around our particular project here on site and have a bunch of events, too.
So anybody who goes to the website, whether you're in the U.S. or not, sign up.
There's a little link on the bottom to add your email, and you'll get all the updates, the invites, to the events.
And that's going to be something that by second week of June, most likely, we'll hopefully be taking over a huge chunk of Soho
and make sure that everybody knows about what's going on there.
But that's the biggest project that we're working on right now that we're excited to see come to life.
Rob, that's awesome. You guys are selling experience. I love that.
Is there any way that, last question, is there any way that people can get maybe their items listed in the museum
or if they have something they want to kind of apply for that? Is there a process?
In doing that, it's all kind of hand-selected, hand-picked stuff by you and the team.
That's all kind of on the website. There's a space to submit assets, and we have a couple of form fields to fill out.
You can attach images. But in reality, we still do this in a way where we want to be a part of this community.
I'm in a million of these conversations. Drop me a DM. Drop the Rally handle a DM. Drop Will a DM, too,
as Will Stern is in the audience right now, too, who handles a lot of this stuff.
But we want to make sure, even if it's not something that lives on Rally,
if there's a way to sort of bring attention to a space or to a collectible that's super interesting,
we're going to have it in that space downstairs.
So anybody who has anything they want to put on display and bring attention to it
that evokes that kind of emotion from a big audience is something that we want to have there
and someone that we want to talk to. So feel free to DM me or the Rally account
or send any emails to hello at rallyrd.com. We'll get that moving.
Awesome, guys. It's been a fun conversation.
I do appreciate Will and Rob once again for giving us an hour of their time today.
It's much appreciated. Rob, you absolutely killed it.
I thought your answers were very, very well. Hopefully, people got something out of this.
Obviously, this voiceover, this live Twitter space is recorded,
so people can kind of go back and listen to it however they kind of see fit.
Guys, before we kind of wrap this up, be sure to follow Rob the Rally account
as well as the rest of the speakers. Great job today, Rob.
I appreciate the conversation. Have a good rest of your day.
Will, and thank you again for hucking us up.
Likewise, man. Thank you guys so much. Really appreciate it. Great talking to everyone.
Thank you, guys. Appreciate it. Have a good rest of your day, guys.
Thanks for sending up, Andrew.
