Raising 10 Million in 24 Hours to Build Crypto’s Alpha Playground

How To Generate Unique Value for NFT Collectors ft. DJ Dot Adam Levy Mint Podcast Levychain
This episode welcomes Mike Dudas on how he’s building LinksDAO, web3’s deal-making host spot and his investment strategy for the bear market.

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Background

Mint Season 5 episode 19 welcomes Mike Dudas, Co-Founder of 6th Man Ventures, LinksDAO, and The Block, who shares his perspective on the current state of venture funding, how he raised $10 million in 24 hours to buy a golf course using membership NFTs, and tips for building tokenized communities. 

This one’s quick but jam-packed with valuable info from the practitioner himself, so hope you enjoy our conversation.

In this episode, we discuss:

  • 00:13 – Intro
  • 01:50 – Lessons Learned As An Entrepreneur
  • 05:22 – 6th Man Ventures Investment Thesis
  • 10:30 – NFTs as Media Distribution
  • 13:58 – Underground NFT Usecases 
  • 15:42 – What is LinksDAO?
  • 20:55 – Biggest Challenges with Starting a Tokenized Community
  • 22:41 – What’s on Mike’s Radar for the Bear Market?
  • 25:26 – Outro

Mike Dudas: https://twitter.com/mdudas

6th Man Ventures: https://twitter.com/6thmanventures

LinksDAO: https://twitter.com/linksdao

Support season 5’s NFT sponsors

1. CyberConnect – https://cyberconnect.me/

2. Coinvise – https://coinvise.co

3. Mint Songs – https://www.mintsongs.com/

Interested in becoming an NFT sponsor? Get in touch here!


Mike, welcome to mint. Thank you for being on. How are you doing?

Mike Dudas: I’m doing well. Thanks for having me on, man.

Intro

I’m excited to have you part of season five. I think a great place to start. This is where I start with everyone has a quick intro. Okay, who the hell are you? But more specifically, how did you get your start into crypto?

Mike Dudas: Yeah, so, I have been in crypto full time since 2018. And actually, purchased my first crypto in 2013. And it was passively interested, purchased for the first time because I was working at Braintree, and we were thinking about adding Bitcoin payments to Uber and Airbnb in 2013. And I was just interested in global, you know, low fee, censorship resistant, always on payments. Bitcoin obviously proved to be volatile and doesn’t work for that, stable coins actually can serve that purpose now, but that could be interested in them. Enter full time in 2018, saw what was happening with Ethereum. And smart contracts and ICOs are getting really excited about the potential for applications that networks that included you know, money in terms of and tokens to help basically incentivize people to do things, to help with governance, to help with coordination. And, you know, started as a, somebody found a company called the block to educate folks on news research about the space and then spent some time, sold the block last year in Paxus, running their stable coin business. And now, I’m a full-time investor.

Lessons Learned As An Entrepreneur

Nice. So, it seems as if like, you’re quite entrepreneur yourself from starting all these, like crypto companies, for the most part, yet the day to day of your life seems like you manage a fund and you’re betting on other entrepreneurs, what are some of the biggest lessons you’ve learned while being an entrepreneur that you look for while betting on other entrepreneurs?

Mike Dudas: Yeah, so I think the first thing is just you don’t have to have like, significant. I wouldn’t say like domain expertise, I like to say like a lot of the places that we’re investing in it really early stage of pre seed and seed and web three, your crypto infrastructure applications, you’re investing a place where there are no experts. At the same time, I want to find people who I believe are like, deeply authentic, where when they have a conversation with me, like it’s grounded in, you know, a passion, and there’s a reason for doing what they’re doing. I really like to dig in. As much of people, you know, investor as I am, like an idea investor. So, I like to really understand the authenticity of where somebody’s coming from, and why they’re like trying to solve a particular problem. And then I want them to be realistic about like, not only the technical components of what they’re building, typically, but like, hey, what’s the go to market? And how your why are people going to care about this. So those are just like the things that I look for. I’m not too hung up on the potential for folks to pivot, as I mentioned, like the idea could change, but I just want like a sensible hypothesis.

Got it. I know some of the biggest valuations came out of the bull market, and people were raising money on some of the craziest ideas, whether they’re credible founders and web three, non-credible, whatever it may be, what are some of the biggest mistakes you witnessed entrepreneurs make during this recent bull market?

Mike Dudas: Yeah, so I mean, so in crypto specifically, you know, one of the biggest errors that folks could make, and I have my own project called Links DAO that I started with some folks where we raise money by selling NFTs. And that money was denominated in Eth, we immediately convert to stable coin. So, one thing treasury management is just a critical problem that a number of projects have run into, when they kept their treasuries in their own native tokens and or Eth or soul, and therefore they have 75% or more, you know, discounted from the nominal dollar value that they thought they raised. That would be one. Two would be you know, aggressive hiring, by the way, it’s not just a startup problem, you saw Coinbase over hire significantly based on you know, projecting what happened in q3 and q4 of 2021 far into the future. I think a lot of, you’ve seen some correction, you’re gonna continue to see more. And then I mean, look, we all got caught up in it such as the startups like the belief that we were in you know, super cycle was kind of a joke and then that like yeah, now it’s a joke, but I do think a lot of people believe that you know, we were reaching longer cycles and we were gonna stay and that the, we were still so small and there’s such a, by the way, this is the case, but I think a lot of us, including myself, in some cases, and in some of the things I invested in and did and products that I like to price and purchase myself, thought that we would reach a broader audience more quickly, you know, projected maybe what’s going to happen by 2030 into 2023, or 2022.

6th Man Ventures Investment Thesis

So, what’s your investment thesis actually a 6th Man Ventures?

Mike Dudas: Yeah, so we’re basically investing in applications and infrastructure. You know, the term is like web three, but we truly believe that your applications and infrastructure that makes it basically easier to utilize crypto and crypto enabled products. Okay. We think that cryptocurrency that tokens, as I mentioned, are tokens for governance, for incentives, for payment, for coordination, can actually add significant value to applications can help to bootstrap networks, you’ve seen this with helium, we’ve seen this with some player in gaming, although the jury is still out on what models will be sustainable there. So, we’re like very, very bullish on the notion of, you know, any merging ownership, but the idea that you can basically have ownership of the networks, that you participate in, a piece of the network that you participate in. So, we believe that’s powerful for both business and consumer used cases. Additionally, you know, we believe that, you know, money and value that separate from any call it centralized authority, a government, a bank, a business as powerful as well. So, we’re investing in businesses and projects and protocols that are creating that, you know, future where, again, they’re networks that are owned, governed, incentivized, and fueled, sort of by their own token economies.

Yeah. Is there anything on that investment thesis or your overall belief in web three that you’d say like others may not agree with, that you guys are just like extremely bullish on?

Mike Dudas: I mean, I think it’s popular, I mean, it’s pretty contrarian to still think even today. If you tune in to Twitter, or the news or anywhere, we’re at a low in terms of people’s, we’re in that trowel of disillusionment, where, you know, you’re gonna hear cryptocurrencies outside of perhaps like Bitcoin and maybe Ethereum. Or maybe even there’ll be included, you know, there’s a lot of comments about these being your vapor and not having value, and you hear a lot of projects pointed to and tossed about as being Ponzi’s. So, I think it’s like, kind of contrarian right now, I see a new blog post every day from people who I know are investing in tokens regularly, that, like, tokens are an innovation, that crypto enabled networks are innovation, we still believe that deeply. And I’ve like seen it at work. You know, so we’re investing like aggressively against that. We are invested in a number of like playground games that will launch later this year. We’re invested in a number of web three enabled networks and to Dao structures where there’ll be launching more publicly later this year. So yeah, we continue to deploy into areas that I would say are publicly unpopular, but you know, we are remain bullish. And the good thing about that is, because they’re unpopular right now, evaluations are more reasonable than they were, as you mentioned earlier, are sort of at the bullish peak here late last year.

Right. You know, so I could assume that building the block, which is one of the more reputable media outlets IN crypto, you’ve learned a lot around the business of traditional media, because inherently it feels like a traditional media business covering the web three, landscape, but I’m curious while building out that business, you probably also discovered a lot of like traditional holes in media, that maybe web three consult, do anything come to mind?

Mike Dudas: Sure, I mean, the biggest is that it’s really difficult to and you learn this, you know, as you’re covering stories that have multiple protagonists and your multiple takes to actually ascertain like, what the truth is, and so, you know, any news story or journalistic piece that’s presented is going to, you know, have the perspective deeply entwined of the person who’s writing it. And, you know, you’re never going to make anywhere near 100% of people who are, the subject of the story or reading it or impacted by it or happy. So, it’s difficult, it’s really difficult to some extent, no, not like it’s a no win. Industry and ecosystem is very, very easy to criticize, even, you know, really high quality journalism. And it’s really difficult in today’s you know, hot, quick take environment to defend, you know, journalism that has integrity against, you know, really loud voices who you cover whether that be, you know, a cryptocurrency exchange leader, you know, an influencer or somebody who has a pulpit to accuse the news of being false.

NFTs as Media Distribution

Right. So, on that note, how do you kind of think about NFTs as a medium for media distribution? Do you see like, how do you think about that really?

Mike Dudas: Maybe clarify that question. I’m not sure I think of NFTs, I haven’t, we haven’t done much in that specific area. I want to make sure I understand the question.

So, I think a good example is like tokenizing art and the collectability of art and the distribution of art, right, as a form of media. Yeah, right. Right. What are your thoughts are on that?

Mike Dudas: Yeah. So, one thing like to date, like, last year, at least, over the last 12 to 15 months, people showed a higher willingness to pay for, you know, to your point media, in the form of NFTs, whether that’d be art, whether that be music, not really video or other things. And even written stuff, like I know, there’s been, there’s mirror and some other NFT enabled publishing platforms. Ultimately, you know, we’ve talked about like, I think played around gaming, where you have NFT’s and tokens, the core of the game and the core of what you own, I think that’s going to be the largest, you know, initial manifestation of NFTs and quote unquote, media. But the, you know, I think it’s, you know, NFTs in their current form, where they’re like, you’re primarily like static Jpegs, or GIFs. Like your gifts, I don’t wanna be a boomer and call it GIFs. But like, it’s just kind of like, I don’t think we’ve really explored the space where we’re really changing the media landscape. I think, you know, there are other experiments that are happening with media that I’m not sold on things like decentralized studios, where you sell NFTs and then that community can sort of like vote on what the story or the IP or the creative, your output will be. I’m not sure that’s gonna work. I’m not super bullish on it. But like, I like to see folks experiment with those sorts of things.

So, I guess, you know, NFTs that is applies to like traditional media, I haven’t thought a lot about NFTs as it applies to the things where they are working with respect to media is they’re helping to create communities where people sort of identify with this new form of media, they’ve bought like the NFT, the picture, the JPEG, the identity that they have. And then you know that that community coalesces around it, to some extent, the art, but really, it’s about like, the value of the thing, and hey, we’re part of this thing together. And we self-identify, these aren’t novel concepts, but they’ve been, you know, really, really powerful in terms of getting people excited. I do think the money aspect of the stuff, you know, this speculative aspect is what has driven a lot of like the behavior and interest in you know, NFT enabled art to date. And so, to go beyond that, to things like more interesting, we’re going to have to give more properties to the NFTs that matter. You know, things like, as I mentioned, governance are input into creative direction. You know, token gated asset, token gated access and things like that. But we haven’t really seen those experiments materialize, other than as, like proof of concepts today.

Underground NFT Usecases

Are there any other experiments that you are kind of like eyeballing that have maybe not hit the main stage just yet around NFTs? Anything come to mind? I guess, I guess, just to add more context, I’m trying to understand what the next wave of NFTs look like, I feel like 10k PFPs have had their era for the most part. Right and trying to understand how this primitive can using other means.

Mike Dudas:  we’re interested in like that we’re investing in like, it’s even the next thing, I think it’s just people will recognize that there’s enduring value to utility based NFTs, right? Like I have a project Links Dao, where the NFT that you purchase gives you the ability to purchase membership in the club, the ability to vote on the club’s rules, where the club will be, a bunch of other things then access to perks and benefits. So that’s one. They’re like utility base NFTs, like we invest in a company called po app, proof of attendance that becomes like almost like your passport of things you’ve done in places. So, I think that’s interesting. And then what that enables is okay, you have that po app in your, you know, in your wallet. Okay, that means you qualify for XYZ in the future. Yeah, I think that’s interesting, I think earning NFTs for doing different tasks. So hey, you were developer, you participated in this governance vote, or you built this particular thing. And here’s an NFT as proof of what you’ve done. Those are interesting next steps. But candidly, like, I’m looking for people who can imagine things more exciting and wilder than that, if I had all the good ideas, I probably would be incubating more businesses versus investing other people.

What is LinksDAO?

So, part of that, part one of these businesses is Links DAO. I guess for those who don’t know what it is, can you give a quick intro?

Mike Dudas: Yeah, so it’s basically a community-governed and community-created golf and leisure club. So, we sold 9090, NFTs, June, I’m sorry, January first, and second of this year, and the holders of those NFTs, basically have rights to make decisions about what the golf course and club and rules that their participants in and future members of will be. So, the beauty of this quote, unquote, web three golf and leisure club is one, we were able to sell off NFTs, which gave us funding to actually go out and make this reality, right, bring a community together, host events, you put infrastructure together to connect all of us, and you hire a team to go out and execute and scout out and find a course and launch it. And then the NFT allows us to do like token gating, and access to benefits of being a part of this community. So that includes like significant discounts, access to certain events and things of that nature. So, you know, it’s like a web 2.5 type thing. You know, to use a term that’s probably overused, but it’s a pragmatic use of the existing technology for fundraising and for community and governance primarily. And it’s been really, really fun, and the people stick around. Whereas a lot of these projects, you see them rise and fall in like two months. We have a really active community, six months on, and they’re really excited for when we buy this course later this year, and then launch it next year.

So how the hell did you manage to raise $10 million in 24 hours from 9000 memberships?

Mike Dudas: Yeah, so the.

And I remember that day explicitly, because it was all over Twitter, people were losing their mind. And the rate at which this community grew was insane. Unlike I’ve ever seen before, maybe the next biggest thing was constitution Dao, like next.

Mike Dudas: So, I think the thing that you learn there, and it ties to the cryptocurrency markets, as we’ve seen, is, you know, a community like that it’s very momentum driven. And so, we got a lot of momentum, like you start with an audacious, but achievable goal, like, we’re gonna, you know, buy or build one of the top 100 golf courses in the world. And then you rally folks around it, and you move fast. So, we went from that initial statement to the actual NFT sales 17 days. And while we did that, we basically put together including me, a very credible team of five or so core folks, and then had a number of folks who were actively involved and excited. It happened over the holidays when folks had a lot of time. And so, they could talk and look at stuff and that was part of the magic was doing it at the end of a long holiday break. And we were fortunate enough, yeah, that it was at a point in time when, you know, NFTs were extremely, extremely hyped. And you know, at that sort of crescendo, so the timing couldn’t have been better. And so, that’s been great. And then we sustained it with you know, media coverage, and now we’re in like, the, you know, like any momentum driven enterprise, we’re in the, okay, now things settle back to like a normal cadence of actually delivering it step by step. So, we have weekly community town halls, weekly updates on progress against you know, course acquisition, or operational things and you know, that cadence is fun and then we do every four to six weeks announcement like our recent one with Callaway where they are, you know, really big partner of ours, and they’re the largest brand of golf.

So that’s been fun. But, yeah, like just the telling a compelling story with a credible team. During the moment, you’ve seen this happen over and over again, it’s like how did you know other side, how to board a yacht selling $100 million worth of you know, digital land, having never built a gaming company. That was certainly momentum. How did, I mean projects that’s suck and like walked away like the pixel. You know. So, I think like, it’s been weird, but a lot of things have happened on momentum. I think the folks who are participating in Links DAO are fortunate that they chose to participate in one that’s like high signal unlike like a pixel, or some of these others where, you know, the folks were just happy to take the money. And we’ve been very transparent in the sense that you can see the Gnosis safe, like, removing like him is off a dime, nor has Jim the CEO, because, frankly, we want to use as little of the treasury on ourselves and as much on actually delivering the value prop that we promised to users. Like I have a full-time job.

Biggest Challenges with Starting a Tokenized Community

What were some of your biggest challenges in starting Links DAO, let alone starting a tokenized community today?

Mike Dudas: Yeah, so the biggest challenges are, how do you transition sort of elegantly from that initial burst of energy and momentum, and the idea that we’re all participating, it’s chaos, but there’s some order to a scenario where you can actually execute on like, operationally doing things, and it’s not gonna be like, we like during the month of January, February, probably 100 plus people, you’re reaching out in the name of Links DAO to different partnerships. Prospective partnership partners, and so we had to do a lot over the first three months of putting in place, a true, you know, infrastructure for Links DAO that had your pods, right, so you’re marketing pod, your partnerships pod, your events pod, developer and engineering pod, etc. And then you’re nominating folks to actually lead those so that you had some order and some process, that was probably the most difficult thing that we’ve had to do. The other part is just explaining the fact that the NFT holders don’t actually own that, for us, like don’t own the assets that we purchased like the golf course, that would be an unregistered security sale. So, we’re raising separate funding, equity funding to actually do that purchase. So, we have that interplay between the corporate entity and the community. And just keeping that balance. And it’s similar to Google Labs, and mint DAO and the board ape community, you basically have the corporation, and then you have this community of holders. And really, you have to make sure that you deliver value and that it’s symbiotic. Or else the whole thing fails. 

What’s on Mike’s Radar for the Bear Market?

I guess with the last few minutes that we have on the podcast, I really want to understand where your head’s at, for the bear market. bear market is a time of opportunity. You find the best projects, you find the best builders, and the ones who kind of last and stick through thick and thin. What’s on your radar for the bear market? What are you eyeing? What niches are you excited about to throw money at? Walk me through that?

Mike Dudas: Yeah, so the biggest thing is that you have to make an assumption about, like usage of crypto and crypto enabled products. And when that’s going to return and I think like are our guesstimate is it’s going to take some time for things to normalize, we probably aren’t at the bottom as of the end of q2 2022. Particularly as you see problems with these lending desks. And I think we have; we don’t really know how contain that stuff is. So, the assumption then is that, hey, we’re going to be in a bearish market for a decent period of time, most likely. And you have to adjust your expectation of like users. And that means that even a great product, it’s going to take more time for to catch on, because you’re going to have a less, you know, enthusiastic and a smaller base of folks who are looking for like the next great, you know, crypto application. So, what we’re focused on a little bit more than we were called three to four months ago, is investing in infrastructure. So, you know, the big problem right now is, you’re most of the apps we use today, we use on our mobile devices, like while we’re walking around and doing stuff, that’s pretty difficult with web three or crypto enabled applications. So, I’m excited, for example, about what Solana is attempting with this launch service. And we’re looking at different products, whether they be new wallets, and Fiat on off ramps, but other infrastructure that makes it easier to use your applications and mobile devices. And then you know, from a application perspective, I think we’re probably focused a little bit less than like, really, really way out there. Like I talked about tokens, the beginning of the conversation, while we believe in token enable networks, like there’s only a few categories where we think like it makes sense and we have a framework that we’ve developed in totally around that. And so, we’re looking for projects like where we think it naturally makes sense. And it’s not just like a user behavior where somebody is trying to drop a token, you know, on top of like, just an idea that they have. So anyway, yeah, we’re just probably shifted a little bit more to infrastructure and usability versus you know, maybe going way out there on the kind of like app spectrum just knowing that it’s gonna take a little longer for things to develop.

Outro

I mean, that’s a perfect place to wrap up, Mike, we’re gonna have to do this again soon. Before I let you go. Where can we find you? Where can we learn more about everything that you’re doing? Show it away?

Mike Dudas: Yeah. So just I mean, I’m on Twitter quite a bit and it’s at Mdudas, that’s the best.

You can’t miss him. You’re loud as hell, we love it. Thank you so much, man, till next time.

Mike Dudas: Thank you, Adam.

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