September 6, 2021
12
 min read
Founder Story

How Showtime Raised a $7.6M Seed Round to Build the Social Network for NFTs

Authors

Avatar icon
Alex Masmej
Co-Founder and CEO
,
Showtime
Avatar icon
Alex Kilkka
Co-Founder & CTO
,
Showtime
The post originally appeared on MikeWilner.com. It was republished with permission.

Authors

Avatar icon
Alex Masmej
Co-Founder and CEO
,
Showtime
Avatar icon
Alex Kilkka
Co-Founder & CTO
,
Showtime
Avatar icon
Alex Masmej
Co-Founder and CEO
,
Showtime
Avatar icon
Alex Kilkka
Co-Founder & CTO
,
Showtime
Showtime is building the NFT social network, where both creators and collectors showcase their digital art.

Investors

Alex Masmej shares his journey from creating the first Ethereum Personal Token ($ALEX) to finance his journey to the US, to finding his co-founder through On Deck to building the next NFT social network. Alex raised a $7.6M seed round led by Paradigm to create the platform for people to showcase their digital art.

Investor's note


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Not long ago, Alex Masmej was a founder in France trying to make his way to San Francisco to break into venture-backed start-ups. He wasn’t employed and didn’t have the capital to make this transition so when the COVID-19 pandemic erupted, he saw his dreams of being a founder in Silicon Valley quickly evaporate into thin air. 

But that didn’t last long. Not even two weeks later, Alex grew his renown in the crypto space, where he had already been steadily building a following, for tokenizing himself and selling 10% of $ALEX supply against $20,000 in exchange for some of his future income for the next 3 years. 

Now, not even a year later, he’s the co-founder of Showtime, a start-up that aims to offer a social media interface to the crypto community while enabling them to discover and share NFT art. 

Choosing Crypto 

Alex didn’t just fall into crypto. He thought long and hard about what type of technology could have the largest impact in the world with little upfront capital. 

Like many founders, he didn’t have a hidden stash of cash to back his world-changing ideas. He knew that choosing a technology with low barriers to entry would be essential to succeeding as a founder. Alex thought about how in the 90s, Mark Zuckerberg, Jeff Bezos, and Elon Musk all started in what he describes as “normal tech” by launching technology in industries that didn’t require much more than the internet before tackling other complex problems that would require great sums of capital.  

This is one of the reasons why Alex chose Ethereum, the native cryptocurrency that sits at the intersection of technology startups and blockchain but differs from Bitcoin in that its form is not set in stone. 

“Ethereum is a new internet of value that differs from the internet of data, which is like the World Wide Web. To me, Ethereum is the new foundation for wealth-changing startups. And that's super exciting.”

Before Alex settled on Showtime, he worked on a few different projects that helped him build a solid ground in the industry. During the summer of 2020, he joined the Ethereum ecosystem through MetaCartel DAO, a bottom-up ecosystem of builders and hackers in crypto. His time with the community inspired him to launch two different projects. The first one was Marketing DAO, which was the unofficial Ethereum decentralized marketing agency, backed by Consensys and operated by world-class Ethereum communicators.


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Building a Rocket

While immersing himself in the Ethereum community, Alex also discovered that DeFi lending didn’t allow unsecured loans to be processed without collateral. So he founded a second project called “Rocket”, a pawnshop for crypto where applicants could deposit an NFT and would receive a loan. If the loan wasn’t repaid, Rocket would liquidate the NFT to cover the debt.  

Rocket’s shared lending pool managed 170 ETH (around ~$60,000) and returned 6.01% on ETH over the course of 7 months. Amongst other things, Rocket performed the first ever crypto art-backed loan and the first ever domain name-backed loan

After a few months of building Rocket, COVID-19 happened and forced everyone to reflect on what truly mattered to them. Personally, Alex needed to find a bigger market pull, something that was truly venture-backable in the crypto space, to pursue his goal of building a part of a new financial system that is fairer, cheaper, faster, and more globally accessible.

“My journey before launching the $Alex token or even Showtime was mainly focused around Marketing DAO and Rocket. Even though these projects were not venture-backable, they taught me a lot about being a founder in crypto.” 


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$Alex Token and Income Sharing Agreement

Alex was first inspired to launch his token by James Gallagher, a low profile, 16-year old cryptocurrency expert who created shares of himself. It was learning through him and a few other big names in the industry such as Mike Merrill —who created his own personal token 15 years ago by creating shares of himself not using the blockchain — that made him realize just how easy it is to create and sell personal shares.  

Alex had always loved the idea of personal tokens. In fact, the only reason he was able to fly out to meet the MetaCartel community in Paris was a result of a tweet that prompted the organization to issue a token against the debt to cover his trip fees. They called it the “Alex Masmej Loan 2019.” 


He launched $Alex in his hometown, Paris, at the ETHCC Ethereum conference with little confidence that people would be interested in buying his token. Little did he know, the Ethereum community he had been a part of and helped build was completely bought in and within 100 hours he had raised $20,000 for 10% of the supply of the $ALEX token. 

And just like that, Alex made history as the first person to sell an Ethereum personal token and finance his trip to the United States. 


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The Serendipity Maximizer - Meeting his Co-Found through On Deck

During his search for a path to the US, Alex met Brett Goldstein, an On Deck fellow and Co-Founder of Launch House, who invited him to their second-ever co-living house in Mexico. This idea immediately sparked Alex’s interest as spending 14 days in Mexico would also allow him to legally travel to the United States as a tourist so he could finally realize his dream of visiting San Francisco. 

“I thought, I'm a French person who doesn’t have a college roommate in Stanford who happens to be my co-founder and is passionate about the same things. So I guess... On Deck might be the best serendipity maximizer.”

Alex joined the 7th cohort of the On Deck Founders Fellowship, which kicked off in December, 2020. At this point, his goal was to find a co-founder. He had already accrued social capital in the cryptocurrency space because he shared his journey building $ALEX token but that hadn’t made him any luckier in the co-founder dating arena. He had decided to spend the summer in London —the most start-up-friendly country in Europe— as he looked for a co-founder. 

Alex Masmej (Left) and Alex Kilkka (Right) hanging out in San Francisco


During his first week at On Deck, Alex met with over 60 people and quickly came up with a shortlist of potential co-founders who had technical experience and an interest in cryptocurrency. Luckily, it didn’t take long until he crossed paths with Alex Kilkka, who was explicitly looking for CTO opportunities at a start-up. Although he was at first a bit skeptical about crypto and NFTs, he was quickly swayed by Alex’s charm and convinced that now was the perfect time to join the space. 

“The $Alex token helped me build the foundation for my goal, which was breaking into venture-backed Silicon Valley startups. From going to San Francisco, joining On Deck, and finding a co-founder —all within the span of a few months. My co-founder and I moved quickly to build a product and then raise funding. And then the NFT hype started to catch up and we started to see a lot of traction so we raised a second round. All of this happened extremely quickly. And I'm super happy because it's exactly where I wanted my Alex token to get me.”


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Instagram for NFTs

Upon getting to San Francisco in December, Alex immediately published “Showtime manifesto: solving the social dilemma,” covering how social media abandons online creators, the transition to the ownership economy and how NFTs can serve as a solution. All of his life had been enabled by social media platforms like Twitter yet it was clear that a majority of the value in this space was being captured by Facebook and Instagram. Alex felt that crypto and NFTs were uniquely suited to close this gap. Despite the fact that right now, NFTs are mainly focused on digital art and collectibles, Alex sees an opportunity to expand it to serve blog posts, Instagram photos, videos, etc. 

During his conversations with different venture capitalists in Silicon Valley, he was encouraged to launch a product that would allow anyone to create a personal token on Ethereum. In other words, they were asking him to scale the $Alex token to the world. His main concern was he didn’t know how he could build this type of platform without losing the trust of his crypto community. He didn’t want to create a model that would allow people to exploit the system: cheating or running away with the money. 

After much thought, he determined that the ultimate solution to this problem would be to focus on NFTs first because primary sales, secondary sales, royalties, and other similar income flows can all be redirected and encoded into a smart contract. In comparison with tokens, NFTs had a more concrete use case: digital art and collectibles that had more and more people were adopting. 

The UI of a personal account on Showtime| Image courtesy of Cryptoxlr

Alex wanted to build an NFT platform that would add as much value as possible. After much thought, he decided that he didn’t want to build a marketplace, but wanted to build a social network instead. One where people could go beyond buying and selling NFTs —a true ecosystem where people could like, comment, or share an NFT and build popularity. In other words, he wanted to build the Instagram of NFTs. 

“And so that was how we came up with the first version of Showtime. From being inspired by the $ALEX token, to our decision to reverse engineer to NFTs as the core primitive, to meeting my co-founder who was a really talented, rapid prototyper, to my experience with social media which gave me a great product sense of how social media should be, all of the stars aligned.”


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Derisk to Fundraise

When Alex first tried to raise for Showtime, it was before NFTs had become a popular commodity. He saw that other ambitious founders in the house were easily raising $500k pre-seed rounds on $10M valuations but quickly realized that this process wouldn’t be as easy for him. Despite the many rejections he received, Alex still managed to get a few Angel Investors on board in addition to Dragonfly, a well-known crypto-focused venture capital firm. 

Surprisingly, shortly thereafter, Alex and his co-founder found themselves raising a second round of funding. This time, the tables had turned. 

“And the second fundraise, which was a bit bigger, really just happened to us. We were not looking to fundraise. Meltem Demirors, the Chief Strategy Officer of CoinShares, had told me that in the best case scenario I would derisk the company and then in March I could try to raise more funding. And I was like, that’s awesome but I’m not sure that’s  going to happen. But that's exactly what happened."

The second they launched their product, Showtime, they found themselves in conversations with Fred Ehrsam, the co-founder of Coinbase, and Paradigm, a top VC firm powered by the world’s best engineers in crypto. They even spiked the interest of Naval Ravikant and Balaji Srinivasan who joined in as Angel Investors. In the blink of an eye, Alex and his co-founder had raised an impressive $7 million round.  


Alex and his co-founder approached building their product differently from others in the cryptocurrency space. They focused most of their efforts on their Go-to-Market strategy and built the first version of the product by taking APIs from other platforms so that they could quickly build their website. They offered users simple features like uploading their NFTs as well as liking and sharing the ones that were hosted on the site. Their straightforward strategy allowed them to move faster than other companies in the space because no one had tackled it from that angle. 

Showtime recently introduced the "News Feed" feature to the platform. | Twitter


Alex and his co-founder are deeply aware that in order to succeed in crypto, they will have to own their tech stack and level up engineering to build proprietary tools and features. They are currently focused on expanding their engineering team and bringing on talent that can think about how to best build a stable coin in crypto. Even though they have accomplished a great deal in little time, Alex and his co-founder have a long list of goals they are working towards as they change the face of cryptocurrency. 

“I think that the next milestone will be product-market fit. I think that once we see our platform growing and are crossing the chasm from NFTs to the mainstream then we will have hit another major milestone.” 

Alex’s life has completely changed over the course of a year. He is now living his dream of being the founder of a venture-backed start-up in San Francisco while working towards building a world where crypto is mainstream and NFTs play a larger role in social media —all thanks to his grit, perseverance, and the $Alex token. 

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If you want to join the team building the social network for NFTs, Showtime is hiring for numerous roles (Senior Backend Engineer, Senior Frontend Engineer (React), Senior Mobile Engineer (React Native), Senior Smart Contract Engineer).


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