Nobody Studios launches innovative equity crowdfunding in first Asia event

Venture studio Nobody Studios hosted its first event in Asia last February 23, at the Astbury Manila. The event was a chance to meet with Nobody Studios leaders, network with investors, learn about venture company building and investing, and collaborate with like-minded peers.

Founded in 2020, Nobody Studios is a Southern California-based venture studio that introduces a unique twist to venture capitalism by infusing equity crowdfunding into its business model.

The event is timely as although still young and fledgling, Manila’s startup ecosystem has pretty much seen it all. Startups have come and gone, funding rounds have opened and closed, and investors have all recorded their share of profits and losses. Players such as startup founders, angel investors, incubators, and more know what to expect.

However, players in the startup ecosystem should look at Nobody Studios as an emerging player on the scene with an innovative approach to venture building, investing and wealth creation.

The studio’s “why” alone is enough to set it apart from other venture studios. Nobody Studios acknowledges that the rapid pace of innovation today necessitates a new way of building, funding, and operating companies. The unfortunate reality is that startups either have a difficult time raising capital or are overfunded even without having a successful product in the market. Additionally, many early investors tend to get pushed out and fail to meaningfully shape the business they invested in.

Nobody Studios looks to solve all that. Investing in the equity crowdfunding gives investors ownership in all of the start ups under the studios’ portfolio. That’s because the studio builds these companies in-house, and investors will earn equity across all of the startups they incubate. As such, equity crowdfunders instantly become owners of a diversified portfolio of companies under the studio.

Nobody Studios has already managed to attract diverse talent in its pool of advisors. This pool includes executives with decades of experience in asset management and fundraising, multiple successful exits under their belts, developing startups, and much more. The studio is also backed by top executives at Amazon, Facebook, Google, Stripe, and Coca-Cola.

Headquartered in Los Angeles, the studio now has teams based in New York, London, Tel Aviv, and, most recently, Manila—where co-founder and Chief Incubation Officer Barry O’Reilly is based.

Slowly but surely, Nobody Studios is revolutionizing the way ordinary people interact with early-stage companies. The studio’s business model is seeing to it that anyone can benefit from owning a meaningful piece of a business they helped create and succeed—not just as venture capitalists. Think of it as the Swiss Army knife of venture building.

A super business model

According to CEO Mark S. McNally, Nobody Studios was borne out of the desire to create new startups at an unprecedented velocity and scale. Achieving this through equity crowdfunding is meant to democratize the process of company ownership. The company emphasizes its ambitious goal of creating 100 compelling companies in just 5 years.

The studio’s optimism isn’t unfounded. The studio already has 11 companies in development, with 4 in the market and even more close to launching. These startups operate in sectors ranging anywhere from healthcare to micro equities.

The statistics on venture studios also favor Nobody Studios’ business model. For instance, venture studios also have an average 53% investment return rate compared to 21% for traditional VCs. Startups that launch from studios even see 30% higher company success rates and almost always manage to raise a seeding round.

It also helps that Nobody Studios’ business model allows it much flexibility. The studio’s control over companies in its portfolio makes it possible to pause, merge, and even split companies to get the most value out of them. Companies are even optimized for early to mid-stage exits that will give the most value back to its investors.

The diverse range of companies in the studio’s portfolio also allows it to build an expansive network spanning multiple countries, professions, industries, and expertise. This gives world-class talent from everywhere a chance to be part of something great.

Finally, Nobody Studios’ business model diversifies investors’ risks: by investing in the studio’s portfolio they truly benefit from the performance of dozens of companies forever.

Staying “frugressive”

Yet another reason why Nobody Studios believes its goals are within reach is its faith in its ‘frugressive’ approach. Frugressive is a portmanteau blending the words ‘frugal’ and ‘aggressive’. Staying frugressive is crucial to ensuring that the studio still continues to expand while not spreading itself too thin.

For example, the studio aims to launch and scale each company in its portfolio for less than $250,000. That means every business idea going through Nobody Studios is subjected to an intensive early-stage validation process keeping the ‘frugressive’ principle in mind.

The process has five stages:

• Ideate. This is when a compelling vision for the business must be defined, and brought from potential investors (sometimes referred to as ‘Nobodies’) and external entrepreneurs/enterprises. This is also when ideas are captured and critiqued.
• Concept. The business thesis will be challenged and refined here via market research, design prototyping, and customer testing.
• Launch. The business will be brought to the market, learning from customers’ reactions.
• Optimize. This is where a business must demonstrate what it has learned after going live. The business must fix what isn’t working and improve quickly and efficiently.
• Scale. The final stage will finalize the business’ team, funding and product roadmap, and finally scale.

Strict adherence to staying frugressive protects Nobody Studios from ideas that may seem brilliant at first but prove to be unsustainable and unscalable in the long run. This is especially crucial amid rising concerns that startup funding from sources will dry up in the face of macroeconomic factors like inflation. In the final quarter of 2022 alone, investment in North American startups fell by 63%.

Co-Founder and Chief Incubation Officer Barry O’Reilly is more than aware of the challenges up ahead. Yet O’Reilly maintains the studio is more than equipped to weather the storm. “Capital is available, but it is selective. This means good business models do get funded even in the worst of markets,” he said. “Now is actually the time to build. So, when markets start going up we’ll be ready for our companies to be acquired.”

Recording returns on investment

Nobody Studios also has its own criteria for startups looking to be part of their portfolio.

First, the studio avoids any startup it deems overcapitalized. Though the studio is industry-agnostic the startup needs to be in a category the studio is interested or have proven expertise in. One category is ‘building blocks’ or startups that enable the creation of other ventures and businesses. An example of a ‘building block’ startup in the studio’s portfolio is ThoughtForma, a London-based startup that allows people to build robust and scalable applications without any coding.

The studio is also currently working with a diverse range of companies such as no-code platform ThoughtForma, virtual talent marketplace Ovationz, and psychedelics education platform Webdelics.

O’Reilly also emphasizes that the studio works to give investors a return on investment, citing projections from within its equity crowdfunding platform. “Over a five-year period, we’re projecting a 4x to 8x ROI,” he said. “Over a ten-year period, this could go as high as 24x to 55x.”

A breakdown of the studio’s financial model by Chief Financial Officer Greg Lovett explains that one’s ROI can come from an exit distribution. Lovett used the theoretical example of a Nobody Studios startup posting an exit valuation of $90M after a Series B round. If the studio retained 30% ownership of the company it would have a $27M gain on this portfolio company’s exit. The studio would also take 30% ($8M) to help the company’s growth, while returning $19M to its shareholders. In this scenario, someone who invested $1,000 would get back $444.

Brave new ventures

The novelty of Nobody Studios’ business model and its successes so far have not gone unnoticed. It was even named one of the Top 10 Venture Studios for 2023 by an industry-leading publication. Many of Nobody Studios’ investors have also been quick to give it praise, citing their belief in its business model and its usefulness as a tool for diversification:

Still, O’Reilly admits there have been challenges. “Anytime you’re doing something new that has never been done before, especially at a large scale; there’s a challenge of getting people to support you at the right time, between the vision and goals,” he said.

For O’Reilly, the key to success is continuing to be people-first, incubating the studio’s ideas, and working hard to find world-class founders and companies. O’Reilly believes even the most skeptical will come around once they see how committed Nobody Studios really is.

“Our vision was easy to doubt but we have worked the past 2.5 years to prove ourselves and make it real,” O’Reilly added.

O’Reilly’s optimism is especially apt considering that the studio’s goals certainly meet the criteria for being Big, Hairy, and Audacious Goals (BHAG). The studio’s BHAGs include not only establishing 100 companies in 5 years, but also a 1,000% increase in wealth creation for its crowdfunders, 100,000 Crowd Infused™ Nobodies creating companies, and 1,000,000,000 people using the studio’s products throughout the globe.

Yet despite the challenges, the future seems bright for Nobody Studios, with the studio especially targeting growth not only in Manila but also in London, Europe, Israel, Dubai, Africa, and Asia.

O’Reilly’s vision for the studio’s future alone speaks to their boundless ambition. “In 10 years, I see Nobody Studios being one of the premier global venture studios with global presence,” he concluded. “Hopefully, we will even see the alumni of companies that succeeded coming back and doing their second and third companies with us!”