At the end of March of 2021, Josh Richards, along with fellow Sway House members Griffin Johnson and Noah Beck teamed up with TalentX co-founder Michael Gruen and former WarnerMedia and Goldman Sachs investor Marshall Sandman to found Animal Capital, the world’s first Gen-Z based Venture Capital fund. The company is dedicated to funding pre-seed, seed, and series A stages, focusing on guiding the brands through their most developmental phases. The company has attracted a range of other investors and major financial figures including co-founder of Twitch Justin Kan, Sukhinder Singh Cassidy of Google and Amazon fame, and both Cameron and Tyler Winklevoss. The formation of the fund is a monumental moment in finance, opening up doors for several young investors to secure capital for their start ups as well as for TikTokers to transition off the platform, away from the entertainment industry, and into the gravity of the investment world.
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Proving Themselves as Cultural Epicenters
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Prior to being able to manipulate the financial markets, Richards, Johnson, and Beck had to demonstrate their essential value by capturing the culture. Richards first started posting to social media within the 2010’s and quickly exploded in popularity on TikTok. He co-founded TalentX in 2017 when he had over a million followers. That count continued to grow, accumulating in over 24 million followers. Griffin Johnson followed a similar trajectory, earning millions of followers on TikTok by appearing in duets with Jordan Beckham and collaborating with fellow influencers Jaden Hossler and Anthony Reeves. He maintained his followers and now boasts an impressive 10 million followers on TikTok. Noah Beck made the transition from college athlete to TikTok icon. In less than a year, he accrued over 24 million followers and has dated one of the apps most popular content creators Dixie D’Amelio. The success landed him interviews and features in publications such as Yahoo!News and BusinessInsider. Through each of their individual accounts, they proved to the culture that not only could they master it, they could dictate its next direction.
From TikTok to Finance
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The initial transition from influencer to investor began when Josh Richards teamed up with Bryce Hall to create their own energy drink company Ani Energy. After meeting future partner Michael Gruen through their partnership at TalentX, his business deals began to expand, investing in companies such as UnHide and Dog for Dog. He then served as the Chief Strategy Officer of TikTok’s rival app Triller. Richards then tapped fellow influencer Griffin Johnson to invest in the app Breakr. In June of 2020, TalentX formed a partnership with WarnerRecords, bringing Marshall Sandman into the picture of Goldman Sachs notoriety. Now with a motley crew of influencers turned investors, the group decided to take the advice they received from legends such as Wayne Gretzky, Ashton Kutcher, Jerry Lu, and Sean Rad. Forming their own Venture Capital fund, Gruen and the group now have their sights set on “empowering talent, help[ing] brands drive attribution and mak[ing] consumers lives better”.
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Now controlling the early stages of several brands, influencers, and clients, the group at Animal Capital will be steering the ship of the financial industry’s future. Griffin Johnson, through his experience as an investor in Breakr, was able to learn directly from the model of fellow venture capital firm Andreesen Horowitz. Andreesen Horowitz legitimized the new app, having previously supported tech companies and popular apps such as Clubhouse, BuzzFeed, Airbnb, Facebook, Groupon, and Twitter.
The group made another very distinct decision in 2020 when they chose to purchase 30% of the Sillybandz company. Prior to their decision, influencers had been known for accumulating brand deals and creating sponsored content and posts, ultimately producing commercialized content for the brands and companies for a small profit. But by purchasing Sillybandz, the Sway House took investment deals to another level. Now, they themselves were invested in the success of the product they were promoting, upgrading themselves from an advertisement to a partner within the company. This trend created a new trajectory for influencers. Animal Capital could result in a similar situation, allowing influencers to focus more on investment deals and the foundation of companies, rather than relying on upcoming trends to increase their followings.
A Fortuitous Future
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But will these changes and new avenues of success result in prolonged financial success? Or will the world of finance still be held hostage by private firms, old guards, and closely-knit communities of crypto-holding financiers? Sandman, who has had years of experience working with these gatekeepers from Goldman Sachs and WarnerMedia seems to think they might hold the key to the future. With his experience and knowledge on how to “avoid common pitfalls,” his sights are set on uplifting influencers. “Empowering creators to make investment decisions is going to be core for brands to build their customer base,” said Sandman. “Working with thoughtful investors like Josh, Griffin, Michael and myself benefits the whole ecosystem from business to consumer to marketing firm. We want to keep making those relationships tighter and we believe that’s where the market is headed.”
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Sources: Yahoo!Finance, BusinessInsider, MarketsInsider, VanityFair, WFMZ, AnimalCapital, CNNBC, FoxBusiness, eCelebFacts, Benzinga, PopBuzz, CelebsAges, People, MSN, Billboard, Variety, TheBlast, Forbes, TubeFilter, Nomics
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