[00:02:30] Patrick Donley: It makes a lot of sense. I’ve been having fun talking to you before we’ve hit record here, but I wanted to get in and talk a little bit about your life. We’re going to, for sure, obviously talk about Rally Road, but I wanted to hear about your life before that, like growing up in Brooklyn, what you were into, just what kind of kid you were.

[00:02:47] Rob Petrozzo: Yeah, my childhood and my formative years and school and all that kind of was all the preface for what became Rally, I think. Growing up in a really tight community in Brooklyn with my family around all the time and a million different friends and you’re waking up on Saturday morning, jumping on your bike and you’re not coming back until it’s dark out.

[00:03:03] Rob Petrozzo: That was the first start of a community for me. And we moved around a bunch when I was growing up. So I was in like 3 or 4 different neighborhoods. But it was one of those things where pre cell phone and nothing really mattered. Everything. You’re a kid. You’re running around recklessly with your friends.

[00:03:18] Rob Petrozzo: You pick up hobbies along the way. And that’s where a lot of what we do at rally now came from. So everything when I was younger was riding my bike all day. It’s baseball cards, making model airplanes and stuff with your friends. It’s really Figuring out what you’re going to be into.

[00:03:32] Rob Petrozzo: Cars were always around. I used to make my mom take a picture of me next to any Porsche that we saw. I was just so enamored by the idea of classic cars and like these new luxury vehicles. And then that inevitably led to, I tried to stay as creative as possible. I had a real life, my mom was a great artist and I had a lot of creatives around me.

[00:03:48] Rob Petrozzo: And I started drawing at an early age. So all these things growing up that I was seeing on a daily basis, I would sit in my grandma’s house and draw. And then, growing up, my parents had a small restaurant in Brooklyn called the pasta house. And it was like a neighborhood Italian restaurant.

[00:04:01] Rob Petrozzo: And I would sit at the bar and draw all day after school. And I would meet all these insane people that would be at this restaurant. And that was really like my childhood was this mix of so many different people, so many different places, meeting all these new people, trying to take what was around me and turn it into, literally drawings, but try to be as creative as possible, and I had a super, a young, supportive family who was always, if you want to draw, if that’s what you think a career is going to be by all means.

[00:04:23] Rob Petrozzo: And that kind of led to what I did for school and how I got through college and inevitably led to product design and getting out of school and trying to figure out how to turn it into a career. 

[00:04:33] Patrick Donley: So did you have a traditional Italian mother who thought you could do anything in the world?

[00:04:39] Rob Petrozzo: I’m glad you know 

[00:04:39] Rob Petrozzo: that 

[00:04:40] Rob Petrozzo: to be true, because that is how it actually works. There, I was the first grandkid, So it was also like, not just my mom, but it was, all the matriarchs of our family. Yep. Bye. Lived. We lived in an apartment above my grandmother’s house on 63rd Street in Brooklyn.

[00:04:52] Rob Petrozzo: My aunt and uncle were two doors up and we did like Christmas at their house. And that was the same situation where they’d treat me like I was the golden child, no question. My great-grandmother was one block up on 63rd and one avenue away, so we’d be there every Sunday. So a lot of times it was like, my parents were young, they were in their early twenties, and I was like this kid who was just always happy and taking advantage of everything around me.

[00:05:14] Rob Petrozzo: And had all these great people around me and my family that were putting me in a position to like, try and teach me how to cook and how to do this And they will always sort of keep me close. I think that was when, for sure, one of the reasons was that I felt like I could do anything because they were all saying everything’s great.

[00:05:28] Rob Petrozzo: Everything he does is great. You know what I mean? That’s how it goes. When you’re the eldest boy in an Italian family in Brooklyn, you have no choice but to be that. 

[00:05:34] Patrick Donley: Yeah, whether it’s true or not, it really helps to, like whatever you do in life, like to have that confidence is huge. 

[00:05:40] Rob Petrozzo: Nah, man, you can, I see, it now, even, I’m like a grizzled old man at this point, but when we have 23 and 24 year olds in our office and these kids are so different than I was as a kid, like they put their head down and they just figure things out.

[00:05:52] Rob Petrozzo: And they’re so adept at every piece of technology that comes out now. So when you get the confidence of a 23 or 24 year old, I’m not even talking about me being a five or a six year old in Brooklyn. But somebody who really is starting their career, they do something right. And you reward them for it in a way where it’s literally just patting them on the back and saying, good job.

[00:06:08] Rob Petrozzo: That changes the entire outcome of a day of a week or a month. And it compounds over time. If you do that effectively with the right people. 

[00:06:16] Patrick Donley: Absolutely. Absolutely. So you’re hanging out at this Italian restaurant around all these characters. I imagine it’s gotta be a great childhood. What did you go to school for in college?

[00:06:25] Patrick Donley: What was it designed for? 

[00:06:27] Rob Petrozzo: I went to Philadelphia University, which is like an art and fashion school in Philadelphia, and I didn’t want to go to college. I was, at that point, The first person in my family to go to school. So it was like a thing that I felt like I owed it to my parents a little bit.

[00:06:38] Rob Petrozzo: And that was part of going there and got a little bit of money to go there because of art was able to leverage what I had done in high school and turned that into going to school and not having to have to be a half a million dollar bill when I got out. So that was always like, in my mind, I was like, let me get a degree out of this more than anything else.

[00:06:53] Rob Petrozzo: I went there for fine art and then it, for like art and marketing, like a little sort of minor in marketing that was part of a communication course. And then graphic design became like what I switched to that became like the actual defined major within a year. And this was. Early two thousand.

[00:07:08] Rob Petrozzo: It’s the birth of web 2.0. It’s the birth of the internet as we know it right now. So web design and Flash and all these archaic technologies. Yeah. That if I told a 19-year-old now, they had no idea. Was that Macromedia? 

[00:07:19] Patrick Donley: Was Macromedia the company? 

[00:07:21] Rob Petrozzo: Yes, And it was like yours, it was a mix of programming and code, but it was more design than anything else.

[00:07:26] Rob Petrozzo: But the assumption in 2003 is that everybody’s gonna have to learn how to use these platforms. JavaScript was at the front of everything. JQuery was brand new. CSS was still in its infancy, like the ability to take an image or take a design and bring it to life was brand new. And that became like my everything.

[00:07:42] Rob Petrozzo: That became something that I realized. I could do everything in the stack from sketching something to understanding how font structure works and layout to bring it to life and animating pieces and do all that in one interface. That was like a mind blowing thing for me. And that kind of pre iPhone switched my mind a little bit to interactive design and product and the early parts of product design before really had a title and UX you start thinking about how to apply something that in my mind was going to just be like.

[00:08:08] Rob Petrozzo: Designing packaging and logos in the standard graphic design, it turned into this really much bigger thing that I think everybody my age at that point started to see coming. And even our professors at the time didn’t really see it, but you could see that there was a seismic shift happening with the birth of the internet and usability from a consumer standpoint that I went all in on at that point.

[00:08:28] Patrick Donley: So what year did you graduate from college? Was it right around the dot com crash? 

[00:08:33] Rob Petrozzo: Yeah. And I got it when I got out 2004, 2005 is when I got out, it was still, the iPhone wasn’t out yet. And I use that as a, the iPhone was what, 2007, 

[00:08:41] Patrick Donley: 2007. So 

[00:08:42] Rob Petrozzo: that’s June of 2007, the app store followed soon after.

[00:08:46] Rob Petrozzo: But if you were going to make a career in design, first off, there was no career in art. I didn’t want to be like, as much as I love art, I wasn’t good enough. And I wasn’t going to get out and be a struggling artist and try to figure out how to monetize anything. I care more about building stuff. So when I got out of school, I got super lucky.

[00:09:00] Rob Petrozzo: I was taking any work I could design. So that was a little bit of website stuff. It was a little bit of graphic design, logo work. I was literally just showing up wherever I could and trying to get as much work as possible. Just all freelance kind of stuff. Yeah, all freelance. And that inevitably led me to music.

[00:09:15] Rob Petrozzo: And that was something that during college, I was trying to be like, I was trying to produce music. I was trying to better understand it. It was something that was just like a passion. I was playing a bunch of instruments. When I got out again, in a similar situation, I realized that wasn’t good enough to be in the industry in a production manner, but from a design perspective, that was the way to get back in.

[00:09:31] Rob Petrozzo: So I met a few people along the way. I started designing album artwork and logos and cover artwork for a bunch of different local acts more than anything else. And a couple of them turned into artists that started to get a little bit of steam in, in the rap music industry in particular, one of the pieces I did got noticed completely by chance at a printing warehouse by one of Kanye West managers at the time, and they were starting a new label.

[00:09:53] Rob Petrozzo: They didn’t, they had a 3 million budget from Sony to build this label out. They had a small, basically a closet of an office in the 17th floor of the Sony building and they had money and they just wanted to own the creative process themselves. So as managers, like you want to come in, I want you to meet everybody and do something that’s interesting to you.

[00:10:09] Rob Petrozzo: Kanye’s album comes out in a few weeks after that, we’re going to be really focused on our artists and we want to build out the entire design stack for them. We need people to do it. Do you want to do it? So I said yes. And that became like the first actual job, like late 2004, early 2005.

[00:10:22] Rob Petrozzo: And then it just snowballed from there. So once, once you start having those conversations, once you start seeing your work out in the world and people are spending money on something that you made and have it in their hand, like in a CD or like a piece of a t- shirt or album merch or whatever comes with it.

[00:10:37] Rob Petrozzo: It changes the way that you want to work. I think a lot of people did that for me and I just wanted to say I started saying yes to everything. I took every single job. I designed every single thing that anybody asked for. If anybody couldn’t pay for it, I just gave them whatever price they could pay.

[00:10:49] Rob Petrozzo: I just said yes to everything. 

[00:10:52] Patrick Donley: Say more about that. when you create a product and see it out in the world. 

[00:10:56] Rob Petrozzo: Nah, listen, the first time I saw, this is gonna, on a, listen, a podcast that’s got the word millennial in it, this might be a little bit elder millennial for some people that are gonna hear this, but when you went, when I went to Best Buy, which was a store that sold CDs, compact discs, for anybody that doesn’t know what that is, you walk in, something you’ve done on a shelf, it’s this insane fee, I was, 21 years old, 20 years old, and I’m seeing this thing that I did on a shelf, it completely blew my mind, and at that point, I was like, I think I had a lot of great creatives around me.

[00:11:23] Rob Petrozzo: A lot of them at that point, if you were putting your work out and it was on store shelves, it was like you were a sellout. And that’s, that was almost like a negative thing for me. I was looking at it like, this is a drug at this point. I can’t not have this ever again. I always have something out in the world.

[00:11:35] Rob Petrozzo: And that was, that’s something that is a realization point. I think for a lot of people. Where they realize something is possible. Something that they treat it as a hobby now could actually be not just a job, but a career and something that, that pays it, it pays dividends, not just from cash, but it pays from a conversational standpoint to go into any conversation, have a resume piece.

[00:11:54] Rob Petrozzo: That sold a million or two million or 10 million copies, which some of the stuff I’ve done has Changes the entire dynamic of the way that people think about you and that to me was like from an ego perspective was massive but also from a Reinforcing that you’re good enough to be taken seriously as a designer without it went miles to do that It changed my entire perspective on the way that I was thinking about a career 

[00:12:14] Patrick Donley: And then prove your mom right that Rob can do anything.

[00:12:16] Patrick Donley: Listen, 

[00:12:16] Rob Petrozzo: man, my mom still to this day, like the biggest supporter, basically our PR for the company. Screenshot stuff on her Instagram story like that. You need all that. Like no matter what people, it’s a weird thing that like everybody, everybody has a fighting press. You know what I mean? Everyone thinks I don’t need The Times and all, and the Wall Street journalists, he’s an antiquated old guard of media and podcasts are more important and communities and doing things on Tik TOK are more important. It’s all true. Like that stuff is important, but there is an element of my mom seeing it in the New York Times type of thing.

[00:12:49] Rob Petrozzo: That is still a different scene. Something, seeing something in person has a different feel. Then just hearing about it or seeing it in a comment on Instagram, no matter how many views or how many clicks it gets, there’s still something really unique about that I think is necessary. 

[00:13:01] Patrick Donley: So let’s get into Rally Road.

[00:13:02] Patrick Donley: How you’re doing, working for Kanye West, the album, doing design and stuff like that. How was Rally Road, what was the genesis of that? The inspiration for it? And just talk about just the early days, early chapters of that. 

[00:13:15] Rob Petrozzo: Yeah. So inevitably what happened is that the app store changed. That was the next big shift and the thought process around.

[00:13:22] Rob Petrozzo: Taking an idea and turning it into something completely interactive that lives in its own ecosystem changed everything for the second time for me. around 20, 2009, 20, like right after the financial crisis, right after Lehman and everything, the whole world changes dramatically. The first iteration of that label of good music that I was working at lost the budget.

[00:13:42] Rob Petrozzo: So Sony kind of sunset all of their sub labels and all the labels they would do a distribution for. And it was like, at that point, the John Monopoly, who was the COO at the time and the president of the label basically was making sure everyone knew this is not a full time thing. Everybody that was there was always expected to go find something now and parlay it into something else and turn that into something that it could be.

[00:14:01] Rob Petrozzo: Cause that wasn’t, that was a moment in time, but it wasn’t necessarily like the be all and end all. So everybody there was always working on side projects. One of them that I was working on was like websites and these little sort of micro sites for individual artists that allowed people to vote for a song to be on radio or the video to be played.

[00:14:18] Rob Petrozzo: And that was a little widget that we created and it was like a cool little program that started to get a little bit of attention inside the label. And two or three people reached out about doing something separate, like an app at that point that kind of looked and felt similar. That led to a bunch of great conversations, one of which was with a company called ScrollMotion.

[00:14:33] Rob Petrozzo: And that was my whole portfolio, was this one little widget I created. ScrollMotion was a platform that was taking magazines and turning them into apps. And this was like Esquire and Oprah Magazine. All these legacy publications that now realize like the iPod was out, the iPhone was out, the iPad was becoming a method of reading things digitally in like 2010, give or take 2011.

[00:14:52] Rob Petrozzo: So they were all trying to figure out ways to monetize that space. And publishers had some big budgets. They were spending 40, 50 million on just printing pieces of paper. So if we had a proposition that said, we’ll bring the whole thing to life on iPad and it costs you three or 4 million, it was an automatic yes.

[00:15:06] Rob Petrozzo: So I started talking to Josh Kopel, who was the founder there for a while, and John Lima, my previous CEO. My dad started working there at one point. And then it was like, you got to meet, everyone’s got to meet and figure out what this thing is. My dad was doing sales for them. So I went in there and I was like, I’m coming from a very different background, but this feels like a place that is the space I want to be in.

[00:15:24] Rob Petrozzo: So I wound up at that company scroll motion as their creative director. They’re one of their earliest creative directors in a pharmaceutical vertical and working with the NFL and a bunch of big platforms of bringing this material to life for three or four years. And that was really the start of what will become.

[00:15:39] Rob Petrozzo: Rally. That was like the idea that storytelling is more important than the product of the product. You gotta tell that story more effectively. 

[00:15:48] Patrick Donley: When did you realize the importance of storytelling? 

[00:15:51] Rob Petrozzo: with the NFL, I put on, I was, I didn’t know what I was doing. I put on a blazer one day to go to work.

[00:15:55] Rob Petrozzo: And I know I always go to work in a t- shirt. Like I’ve been doing that forever before it was like invoke for Before it became like social media, everybody that works wears a hooded sweatshirt and a t- shirt doing that because it was just comfortable. So one day I put on a blazer, we had to go to the NFL office and we walked in there and I had a bunch of proofs ready, like designs that I made for what would be their game day app.

[00:16:14] Rob Petrozzo: And it was like, throw a football through a field goal post. It was like all these little pieces of interactivity, really rudimentary, but the things that you could do on an iPad and an iPhone at the time. And we walk in there and I’m dressed like an idiot and I’m sitting at this giant table and it’s like a bunch of other guys in suits around.

[00:16:29] Rob Petrozzo: And everybody’s talking and it got to me and I’m explaining pieces of this product and I’m telling it in a way that’s way more romantic than just the binary hit a button and it goes there. I’m telling this entire poem basically and everybody likes it. Really engaged in the conversation. And then the conversation went completely left, like the narrative for the upcoming season.

[00:16:46] Rob Petrozzo: And they got completely away from what was the nuts and bolts of NFL football and the product we had created in the demo. We were showing them and it turned into this crazy conversation, storytelling mission around the archives of the NFL and all these really important pieces of the upcoming season and how they were thinking about handling in the stadium.

[00:17:02] Rob Petrozzo: So It just turned into this whole storytelling thing for another hour after that, and it was this realization of this is what everything’s going to be at a certain point, and not to say that anybody wasn’t thinking that way, I was probably late to the party, but with sports in particular, we see it now when you see like Michael Jordan and The Last Dance and what that did for just culture in general, people like Allen Iverson, who for my generation, never necessarily were like, The biggest, most well known from a stats perspective or internationally known, but changed the entire way people dress and act and play the game.

[00:17:31] Rob Petrozzo: You see what Steph Curry does now. And you have these little kids that are nine years old trying to take 40 foot three pointers because they saw Steph Curry doing it. And it really has nothing to do with it. With money or the stats or what’s going to happen. It’s just like people trying to emulate and be a part of this story and take that story and apply it to themself.

[00:17:47] Rob Petrozzo: And with sports, that was an immediate, obvious one. I think that. When we started building this company from that point forward, I had two or three other jobs in between scroll motion and rally and was leading product at another artificial intelligence company. I worked with a couple of hedge funds building out their software.

[00:18:03] Rob Petrozzo: For their internal managers that they can see their portfolios and do things that felt more like consumer finance and not like institutional finance. So there were a lot of pieces along the way, but when it came to starting the Rally, the thought process was that all these artifacts, these really important pieces of history and culture, they’re relevant now, they’re going to be relevant in the future.

[00:18:22] Rob Petrozzo: There’s a lot of people who want them and know everything about it, but don’t have access to it because they’re not behind the velvet rope. The storytelling that goes with it is going to be something that generates a lot of attention and the right attention and turns these and isn’t just about commodifying the space.

[00:18:35] Rob Petrozzo: It’s about turning those stories into commerce and doing it in a way where I can actually put my money where my mouth is, and that was pretty clear from 2013 until we started this business in 2016. That was like the head down. We’re gonna make this thing work because it’s pretty clear that there’s something happening that’s making this way more relevant and way more accessible to regular people.

[00:18:54] Patrick Donley: Let’s take a little step back and get into what rally is. Let’s say you and I are sitting next to each other on an airplane from New York to San Francisco. What do you, and I asked what, what do you do? You say, do this thing really. What do you say? How do you explain it? 

[00:19:08] Rob Petrozzo: Yeah. When anyone on a plane, I’m a dummy, I’m a real dummy, 

[00:19:11] Rob Petrozzo: I don’t believe that for a second, but When I’m sitting on a plane or I’m in a conversation, I want to ask what you do in a casual conversation.

[00:19:16] Rob Petrozzo: I was like, ah, I draw pictures for a living. I try to keep it as basic as possible for me personally. But because it is complex, the easiest way to explain what we do and we try not to use this language is that it is like a stock market for collectibles and in a way where it really is not just like buying and selling something.

[00:19:31] Rob Petrozzo: It’s owning true equity in any individual assets. So what we do is we take everything from dinosaur fossils to Andy Warhol paintings to the sneakers that Michael Jordan wore in the finals. We turn those into stock and we do that in a way that it goes through the sec. It goes through a very similar process of an actual IPO of a company.

[00:19:47] Rob Petrozzo: We break it into shares. It has its own sort of market cap, its value. It’s got its own investors, its own cap table, and those shares that can trade on our platform after the IPO is done through registered broker dealers. So once the IPO is done, once it’s fully funded and a crowdfunding manner for each of these individual assets after 90 days, those trade via bid ask on our platform so that you can exit that platform, exit the individual asset.

[00:20:09] Rob Petrozzo: But then along the way, we’re always telling stories. We have them on display here in our museum in New York. We do a bunch of pop ups and collaborations with people to make sure that, if we have an asset, you own a piece of it. You’re going to have access to it one way or the other. You’re going to see it.

[00:20:21] Rob Petrozzo: You’re going to be a part of it. We’re going to be part of a mechanism to sell it at auction eventually. So we make sure it’s not just this one time thing where I bought shares of something and it’s digital and it’s not an NFT. It’s not something that just lives in a wallet somewhere.

[00:20:33] Rob Petrozzo: And so you sell it. It’s something that’s got a heartbeat. It’s got a story and we try to bring it to life as best we possibly can during that whole financial process. 

[00:20:40] Patrick Donley: I’m really interested in just how you got the whole thing going and some of the hurdles and challenges you had along the way. I want to hear about your partners, who you teamed up with.

[00:20:48] Patrick Donley: And then just, I would imagine you had some that is unusual, like in terms of turning a pair of shoes. Into what? Basically, like an LLC that you’re selling shares in, right? 

[00:20:59] Rob Petrozzo: Exactly. So early on myself, my co founders, Max and Chris, we’ve known each other for a while. Chris, I went to high school with these without question, probably the smartest person I know.

[00:21:07] Rob Petrozzo: He was a little bit older than me. He was in tech before tech was tech. And he really understood the mechanisms of bringing something to market like a serial entrepreneur and just an all around analytically smart person that knew how to build business. You went to high school? And Yeah. So he, we both in school in Brooklyn, he graduated a little bit before me, but we had this mutual group of friends where I, this is going to sound terrible.

[00:21:27] Rob Petrozzo: I love all my friends, but none of them understood technology or wanted to be a part of tech. They’re all in sales. A bunch of them are firefighters and teachers. And they’re the happiest people I know because they take on the nonsense stress. Myself and Chris have chosen for some reason to continually raise money all the time and run a tech company 24 hours a day, but they were always like, you guys got to work on something together.

[00:21:49] Rob Petrozzo: You like the smart kids. You’re creative. He’s super smart. You got to work on something together. So we’ve been talking since 2013 about what the future looks like more than anything else. Our third co-founder Max went to college with Chris at Williams. And he was at Barclays doing like real private placements and M and A for a 10 year period.

[00:22:07] Rob Petrozzo: And all the way from the start of 2007 straight through the financial crisis up until 2016. So we sat down and we’re all talking one day and crowdfunding was massive at that point. This is like Kickstarter Indigo. People started to realize that the community coming together to put money into something is going to work.

[00:22:25] Rob Petrozzo: Airbnb was getting a lot of attention. The shared, like the sharing economy was brand new, but it was something that was clear was the future. We started talking about what we loved and all of us individually were collectors of something. And Chris was super into classic cars. Max was into baseball cards.

[00:22:40] Rob Petrozzo: I was into art, but was always behind a little bit in terms of getting the right stuff. So we’re like, listen, if there’s a way to take the things that we love and we know, and we talk about nonstop anyway, and actually own the best examples of it and do that as a community, as a group.

[00:22:54] Rob Petrozzo: There’s probably a product there and it’s something that would solve our problem. And that’s how some of the best products start. But then it was like, all right, but is that even possible? So we started talking to lawyers and they had this premise around what’s called the jobs act, which allows for non accredited investors.

[00:23:10] Rob Petrozzo: So people that don’t have millions of dollars to invest in what the government previously deemed riskier assets. Those are things like private companies and venture deals. And thanks to Kickstarter and a lot of those platforms, they push this legislation through. That really opened up and removed that red tape and the velvet rope from people who may know every single thing about an asset, but they’ve been held out just because they’re not millionaires.

[00:23:33] Rob Petrozzo: And that was always for us what we needed to do. We couldn’t get the best stuff because we’re not in the conversation. We don’t have millions of dollars. So how do we get equity in the most important things? We’ve got to do that. We’re pooling our money together as a community to do it. 

[00:23:45] Patrick Donley: So in other words, you don’t have to be an accredited investor to do any of this.

[00:23:48] Patrick Donley: So you bypass that. 

[00:23:50] Rob Petrozzo: And we have no minimums on the platform. So you can invest in any of these assets. You can own a dinosaur for 10 a share. You can own the best example of a Lancia Delta Group B car for that’s 120, 000 cars. That there were so few exits. You can own a share of that for 20 bucks and there’s no minimum.

[00:24:04] Rob Petrozzo: So when we talked to the lawyers about it, it took probably 18 months. Between legal, the SEC, and releasing the first version of the product to have it actually work, because we did have to Explain to the SEC something they already knew, but in a way that we were doing it in a very unique way.

[00:24:21] Rob Petrozzo: So inevitably, when you hit these roadblocks, you have to really go extra hard and explain something. And that’s hundreds of pages of documentation and contracts. Our lawyers found that if we create LLCs for every individual asset and do that in a way that’s, that we can scale with them, that you can have every single individual asset be its own company, essentially, and then doing it through getting to the weeds a little bit, doing it through a reg a, which is the legislation and the construct that we use to do these IPOs, those are inherently tradable.

[00:24:55] Rob Petrozzo: No one does it though, because it’s just who’s going to, who’s going to maintain a platform for 100, 000 items and maintain trading and proxy votes and all the things that go with it with our legal team. With the SEC, we found a way to do that by having one template for every asset. We’re essentially changing the name, the market cap, And then the investors fill it up.

[00:25:13] Rob Petrozzo: We have to do the quarterly filings, do all the things that a regular company would do that’s traded on a regular stock exchange, but we’re doing it at a smaller scale and they allow us to do it in bulk. So that’s what changed everything for us. We found a way to do it with our legal team and with the SEC and that all is public.

[00:25:27] Rob Petrozzo: So now if you go to the SC’s website and look up the rally, you’ll find every single thing we’ve ever done. That also birthed a lot of competition because you had people that can just copy and paste exactly what we did, but we had this 18 month head start. We created that space and pioneer what would become fractionalization of individual assets.

[00:25:44] Patrick Donley: I had the CEO of Fundrise on as a guest and they did that same kind of thing with real estate and the hurdles with the SEC, it just seemed like it took forever. Like you said, a lot of education, a lot of legal fees. 

[00:25:59] Rob Petrozzo: No, this is the reason that we had to raise, we had, you have two choices when you start a company.

[00:26:04] Rob Petrozzo: Do you want to build for the future? We want to build for right now. And a lot of the right now is like a lot of social media companies that are building something that requires immediate scale and they want to sell out as quickly as possible. It means like, all right, let’s do this. And in the next five, six months, we’ll raise a small seed round.

[00:26:20] Rob Petrozzo: We’ll try and get the profitability quick and try and sell the company. For us, we knew this was gonna be like, extra long game. So where we knew from the jump, this wasn’t gonna be bootstrap because we didn’t have the money to do it. We bought the first couple of assets that came on the platform, the first, three cars.

[00:26:32] Rob Petrozzo: But it wasn’t something that was sustainable. We weren’t going to be able to acquire assets, maintain the legal bills, or do all the accounting. We had to raise tons of money, so we got to a point that once we had the first demo in hand, it was like we had to raise a few million dollars right now for legal bills like that.

[00:26:46] Rob Petrozzo: We had already been 10-12 months in and the clock was running. I love our lawyers and our legal team early on was amazing. But they weren’t going to work for free. And this was very much like pioneering a new space that required lots of conversation, lots of advisors that came on board, a ton of legal work in terms of filings and just the regular contractual stuff.

[00:27:04] Rob Petrozzo: And then also having the conversation with the SEC where we can’t. Call directly and say, can you help us with this? It needs to go through that legal team. So a lot of that was the massive bills early on. It paid off over time, but it definitely required a lot of lead in and companies like fundraising, the real estate platforms that were doing it more of a fund model where we’re really early in understanding how that works.

[00:27:23] Rob Petrozzo: It’s just a little bit easier to explain real estate to the end user than it is to explain why a Pokemon card has the same type of value and same type of investment vehicle. 

[00:27:31] Patrick Donley: So how do you just make the SEC understand that these, like the definition of a security and passing the Howey test, yeah, explain all of that a little bit.

[00:27:40] Patrick Donley: Cause I hear these terms, Howey test. I don’t know what that means. 

[00:27:44] Rob Petrozzo: Yeah, so long, like the easy way to explain the Howey test is if it seems like an investment and it’s a brokerage or it’s some sort of something that’s tradable, like it’s probably a security. So part of the reason is that.

[00:27:54] Rob Petrozzo: Crypto has gotten, crypto got too big in my opinion for the sec to step in and just close it. Like they let it get too big. All of those probably failed. Every single crypto probably fails at how we test one way or the other because they’re, it’s only for gain. Like you’re not doing it where it has like a, it has any type of underlying value other than like the scarcity value that goes with it.

[00:28:16] Rob Petrozzo: It can be exchanged for as a cash transaction, but it’s more so an investment that people put money into. They don’t use it as an actual cash transaction. Just hold on to an account, hope it goes up in value and they sell it on an exchange. So The Howie test is all these pieces that if more say this is an actual security, it’s an investment, it’s something that feels like people are putting money into it to make money, then it fails the Howie.

[00:28:38] Rob Petrozzo: That test means that that’s a security at that point and it requires SEC approval. And we were in that bucket early on. We’re like, we could have changed it, but our lawyers were like, that’s a bad idea because if they say, if that C says no at any point, you’d no longer have a platform basically.

[00:28:55] Patrick Donley: So what could you have claimed that it was property instead of a security? 

[00:28:59] Rob Petrozzo: There was a world where we could have been like the marketing platform for others to list these assets. And then there’s like a membership around it where it’s, if you own a piece of this car, It’s not necessarily for financial gain.

[00:29:12] Rob Petrozzo: You get access to 10 of these auctions from our platform partners and you get this type of thing and you get free coffee or whatever else. there’s a way to do it where in theory it’s a membership, but for us, like we are, we’re not an exchange. We’re not a brokerage. We’re not any of these things. We are a marketing platform more than anything else, but there are transactions that look and feel like they’re happening within the app, even though they’re going through a bunch of broker dealers and people that make money off us for that opportunity.

[00:29:36] Rob Petrozzo: To exchange to be the exchange of records, but it wasn’t something that we wanted. And it was so early on and the sec, as much guidance as they gave, they were really good with us early on. They’re not somebody who’s ever going to tell you like this, this is exactly right. This is exactly wrong.

[00:29:50] Rob Petrozzo: So you have to Be directionally factual and accurate with everything you do. We weren’t even going to pretend that this wasn’t a place where transactions were happening. That would have been stupid for us early. It might’ve filled the whole platform. 

[00:30:01] Patrick Donley: So in the collectibles marketplace, is it, you were early to 18 months, is it and you’ve had a lot of copiers, it sounds like, is it the case where it’s like winner takes all or winner takes most of the pie?

[00:30:15] Rob Petrozzo: Yeah, I think it’s just I hate using the baseball analogy of the first inning. We’re in the bottom of the second, like the early third. So I think that the market’s still trying to find itself. I think that When we look at history and this, we’ve always done this here. There was a time not that long ago, less than a hundred years ago where like stocks were way too risky portfolios, regular people were not supposed to have those.

[00:30:36] Rob Petrozzo: Then things start to change, obviously, and everybody wants to raise public money. regular investors come in now the stock market exists, but then there’s all of a sudden REITs start coming out and that’s too risky. And now. it’s such a heavy weight of the S and P right now.

[00:30:49] Rob Petrozzo: Everybody has read in any 401k or any portfolio. And that became like real estate trust. And that became like the hot button issue. Now it’s crypto. Crypto is too risky for so long, but now there’s institutional investments and there’s ETFs collectibles are in that space right now, where now that’s the one like collectibles and these antiquities and these things that have a ton of value, but have been under the radar for so long.

[00:31:09] Rob Petrozzo: So I think that’s the biggest hurdle for us really early. Okay. Was making people understand that these were investments and that they could be that the most trusted place to do it was reality. So there’s definitely an element of you have to reach scale. And I think we got a little bit of that scale early and we’re able to cement our place in the space to succeed in this space.

[00:31:29] Rob Petrozzo: But that said, I think there’s also a lot of derivative platforms that I would have never have thought would have worked as well as they did that popped up around us for wine or for art or for any of these one pieces that have, the riches are in the niches is always like the thought process for a lot of people and you realize that these markets are way bigger than anybody anticipated.

[00:31:47] Rob Petrozzo: I think that was like the big unlock for any platform that’s succeeding right now. Is really building a community and not just followers building community people who trust you and trust your underwriting standards and understand that not everything goes up, but they have conviction. And you have that same conviction for either an asset class or a batch of assets.

[00:32:04] Rob Petrozzo: So the ones that we’ve seen leave that we’ve seen like exit the space, whether they went out of business or got bailed out or sold or whatever it is, for the most part, I think they lacked a little bit of authenticity. They weren’t real collectors. They didn’t care about the same way that their users cared about.

[00:32:19] Rob Petrozzo: They were building a community quickly. ’cause we had a little bit of a lead. So in their mind, like rush features out, rush out marketing platforms. Keep going without taking a step back and realizing that the assets are gonna lead the conversation. Your authenticity and as much as you care about is how much your users are gonna care about it.

[00:32:34] Rob Petrozzo: And if you go full. Commoditization of this space and commodify everything. You’re going to lose a little bit along the way. So we never, ever tried to be a hedge fund. We’ve never tried to be something that forces people to invest. If you go into the app right now on rally, you’ll see a lot of information, data.

[00:32:49] Rob Petrozzo: you’ll see a lot of storytelling. You’ll see videos. There’s nothing that says buy until you get super deep into that. It doesn’t look anything like Robinhood. It’s not just numbers. It’s not binary until you get deep into the individual asset. The buy button is the last thing. It takes four steps to get there.

[00:33:02] Rob Petrozzo: So I think that’s where we succeeded and where others may have failed along the way. 

[00:33:07] Patrick Donley: I wanted to hear if your experience in 2008, did that shape your interest in collectibles as you see this downturn, you see a lot of people, I don’t know what your investment strategy in 2008 was like, but did that affect you in terms of looking to collectibles as a, serious asset class to invest in?

[00:33:27] Rob Petrozzo: That moment changed my life. that was. I have been successful as a designer. And like I said, at that point, I was still, I was saying yes to everything. Like I was working 20 hours a day and I was doing it in a way where I wasn’t saying no to money. I was trying to make as much money as possible off of a skill and a gift that I thought I had in terms of design and art.

[00:33:44] Rob Petrozzo: And people started to like it. So I wanted to just double down that as much as I possibly could. And I took almost all of that money and I was in two or three different stocks and I was starting to get really familiar with options. And which is. A form of gambling to a certain degree, but it was something that I thought I had an edge.

[00:34:00] Rob Petrozzo: Were you doing covered, 

[00:34:01] Patrick Donley: covered calls or were you? Here and there, but I didn’t have, 

[00:34:04] Rob Petrozzo: The thing is like I did it with Apple and this is one of those things I talked about with somebody here a while ago. I have, I’ve owned so many Apple stock options, everything along the way over the last 20 years, it would have been way better to just leave the money in Apple as an equity instead of getting crazy.

[00:34:18] Rob Petrozzo: So I would sell cover calls at Apple because I didn’t pick enough positions. I was buying and selling everything nonstop. I was trying to play some of the banks that started to get a little bit crazy. I basically lost everything. And I was All based on emotion. It was just a very emotional moment where the rug got pulled on me.

[00:34:31] Rob Petrozzo: And that was this very much introspective moment where you start thinking about I don’t want to make more investments in things I don’t care about that are just money outcomes when you’re just chasing money, it never ever works. And I think that moment in 2008 into 2009 and that March moment where the bottom came in.

[00:34:49] Rob Petrozzo: It blew a lot of people out of the market. Me in particular. I was scared to get back in and I watched them running up in my face. And I think that, and it makes the emotion worse. You’re like, shit, I missed that moment. I lost everything. They’re running it right back up and I’m not a part of it now. So the ultra wealthy are getting their money back.

[00:35:05] Rob Petrozzo: I’m not getting my money back. I think that. you start being way more introspective. You start looking at the things that you actually care about. And it always happens in those moments. It’s something that’s happened over the course of history when it comes to investing and the cultural change and the shift that happens that usually follows.

[00:35:20] Rob Petrozzo: There’s a guy, there’s a line from Brian, he’s like a legendary music producer and a writer. He produced the most important U2 stuff. He said something to the effect in an interview where it was like communities generate ideas, but those ideas are almost always Articulated and executed by individuals and I think we saw it happens so often throughout history It happened it was Andre Brandt did it for Surrealist Movement in Paris And that was you know in between World War one and World War two and it was this moment of social unrest And then you saw it with the punk movement is such a very specific one where it’s like the Sex Pistols did it Yeah For an entire generation on the heels of war in the seventies and this social alienation, and it went from pub rock into something that spoke to this entire generation.

[00:36:00] Rob Petrozzo: I think communities grow in size and they want to demolish the thinking of the old guard. And I think in 2008, we saw that so specifically in finance and you still see the ramifications of it now, how angry people get. It’s the rich mentality. That’s one scale of the spectrum. The other side of it is we want it to stay exactly the same as it is right now because that’s how we make our money.

[00:36:18] Rob Petrozzo: There’s this massive in between that I think is more about like, all right. 2008, 2009 were crazy. I now know that money’s going to be made on investing over time. I could look at the SMP, I could look at that. I could look at all these equities markets and see even in those crazy moments where the entire economy almost collapses, there’s this bounce back because people buy those dips and they buy those bottoms and that’s where fortunes are made and getting into something early enough that the alpha is still there, but also having conviction to stick around and it takes individuals to platforms to push that.

[00:36:48] Rob Petrozzo: I think part of what we did. Here with collectibles that a lot of people saw. And those communities all existed and you realize when you go on Reddit or you go on TikTok, you go into these individual spaces that seem like really small niche markets that there’s thousands and tens of thousands, sometimes millions of people who want to be a part of it, but the information asymmetry didn’t allow it.

[00:37:08] Rob Petrozzo: You need one or two people or one or two platforms to take a stand and say, we’re doing this for all of us. And if you want to be a part of it, this is a safe space for you. You can come here and do it. We’re all doing the same thing. We’re doing it together. We’re all trying to get behind this velvet rope.

[00:37:18] Rob Petrozzo: We’re all trying to make everything better and invest in things that we care about. I think we did that. We did that pretty effectively, and now the communities that have sprung up around it and the other platforms that have sprung up around it are cementing the idea that this was always going to, it was under the radar, was always going to work, just required.

[00:37:33] Rob Petrozzo: A few people to step up and put some money behind it, 

[00:37:37] Patrick Donley: So are you appealing mostly to Gen Z and millennials primarily, or do you span generations? Because I can see where an older guy, a 70 year old guy would be into a classic car and would want to invest. I can see where a Gen Z guy would want to invest in that same thing because he thinks it’s super cool.

[00:37:53] Patrick Donley: Tell me a little bit about your demographic that you’re trying to appeal to. 

[00:37:57] Rob Petrozzo: Yeah. So it’s a little bit of everybody. The core persona was always based on us. And at that point it was like, when we saw the platform, it was like early thirties, maybe has a 401k and has some equities, but isn’t necessarily an active alternative investor.

[00:38:10] Rob Petrozzo: They’re there wanting to buy a house at some point, but the American dream is very different to them than it is to what previous generations were. And People have really understood that consumer finance and retail finance is looked at in a way that it’s like second class citizens. It requires, we ought to do this.

[00:38:26] Rob Petrozzo: We have to put some money in, but now like the lanes exist to do it. Because everybody was armed with that information, but that information expands. So like there, we have certain deals where there’s an 80 year old and an 18 year old in it. And it could be something that’s like a dinosaur or NASA or something that maybe generationally has always been relevant, maybe certain individual generations have a specific type of conviction around it.

[00:38:49] Rob Petrozzo: So we do Apollo 11 stuff or Apollo 13 stuff. There’s obviously a slightly older generation that was around in the 60s, 70s and 80s, paying attention to the space race. Yeah. That’s going to be have a little more conviction and maybe that investment is a few thousand dollars But you also get an 18 or 19 year old who is just you know They grew up going to school and learning about space and now they’re at a point that it’s still relevant because you have elon musk And you have you know Bezos and you have this resurgence of kind of getting to the moon and getting to mars Where it stays relevant over the course of generations and we’ve always tried to appeal To the idea and not the individual by age or demographic or social status or any of that type of stuff because these things are really the celebrities.

[00:39:28] Rob Petrozzo: The idea that this thing is this one thing that a whole group of people care about. We found the best example of it on this platform and depending on how much you want to put into it, anything from 10 you have the option to do it. In this one place, we’re doing it together. And that’s always driven a lot of our decisions around how we underwrite individual assets.

[00:39:45] Rob Petrozzo: What we bring to the platform is making sure that it’s relevant. Now, it’s going to be relevant in the future. And there’s some value attached to it that any generation could pay attention to and understand better. 

[00:39:55] Patrick Donley: Let’s say I’m a millennial guy. I’ve got 10, 000 bucks. How do I learn about rally? How do I get involved?

[00:40:00] Patrick Donley: What are the steps that you’d recommend I take to get, just start investing in collectibles? 

[00:40:05] Rob Petrozzo: Yeah. it always starts with the thing that you care most about. So there’s. For me, again, a lot of it was around art and like I was trying to buy prints and I was trying to understand better about who these artists were and why they’re important.

[00:40:16] Rob Petrozzo: Pop art was always this really important thing to me. I was in New York, so getting on the art train and coming to Soho and walking around in galleries when I was younger was always the thing I would do as much as possible and try to get access to. But now, if you have any individual interest, there’s a good likelihood that an example of it’s on Rally.

[00:40:32] Rob Petrozzo: So either on the website of rallyroad. com or in our app in the app store, you download Rally. Rally. There’s no requirement to buy anything. You can go into that app and see 450 different assets. Every single one has a story about where it came from, why it’s important, the price and the value around it, comparable asset sales via auction and private sales that we put inside the app, every image, every piece of content.

[00:40:52] Rob Petrozzo: And that’s a starting point for a lot of people. I think that from that point, it really is. We’re in it. We’re living in an age right now where you go on Reddit and there’s a subreddit for every single individual category or product or thing or interest group. And getting armed with as much of that information from as many different resources as possible is easier now than it’s ever been, but it’s more important now than it’s ever been because there is still so much noise and so many people trying to sell you stuff right now from day to day.

[00:41:16] Rob Petrozzo: But starting with the thing that you care about most, a lot of times starts with nostalgia. When we did Dinosaurs, we started putting Dinosaurs on Rally, and I started learning more about it. It really came from me as a five year old. One of the first things you learn about is Dinosaurs. It’s something that It’s 65 million years ago, but it’s still as relevant now as it’s ever been.

[00:41:32] Rob Petrozzo: And I grew up in that Jurassic park era and it became this larger than life thing. So that to me was like something that once I got a little bit of information and I realized that we could put dinosaurs on the platform, I went super deep into dinosaurs, understanding what the bone mass meant and what density of individual objects meant and what the plasters that they use put the rest of the skulls together, where the dig sites are, what, why, When the permafrost melts, it’s harder to find X than it is Y.

[00:41:54] Rob Petrozzo: I started going so deep in it. It all started on Google and then on Reddit and then led back to the rally. And then we started putting those dinosaurs on rally. So it really is getting as much information at your own speed for as many resources as possible, but it’s got to be rooted in something you care about.

[00:42:08] Rob Petrozzo: If you don’t care about it and you make an investment in a collectible, think you’re going to make money, you’ll never ever make money. Finance to this point has always been the zero sum game where it’s like, all right, I see a bunch of numbers. I’m buying this thing. I’ll sell it later for more money than you could do anywhere on the rally.

[00:42:23] Rob Petrozzo: And with collectibles in general, starting with the thing that you actually care about, whether it makes money or not, that’s generating enough interest from you to be downloading podcasts, going into subreddits, doing as much research independently as possible, having that conversation with your friends about it.

[00:42:36] Rob Petrozzo: If it’s in the group chat, it likely should be something you’re paying attention to and investing in. And we’ve tried to bring that to life in real life. 

[00:42:41] Patrick Donley: I was on your Twitter feed and I will, I think you’ve got some LeBron James memorabilia that’s maybe up for sale or, like a auction that’s come or not, it’s not an auction, but like capital raise, And the video was incredible. I watched that thing and I was like, I want to, I want to be part of this. Who’s who does that? Those are really well done. 

[00:43:02] Rob Petrozzo: These are the last couple I did because this is from Will Stern, who was running our content here. He’s an incredible journalist.

[00:43:10] Rob Petrozzo: He went, he wanted to go do a media company. He’s doing it with Dan Ravel’s company called collect a great platform that’s necessary that digs super deep into collectibles and into the auction platforms. He, I almost couldn’t let him leave. I needed like an extra month out of him, but before he left me with a bunch of content, we’re in the middle of onboarding someone new to do it.

[00:43:25] Rob Petrozzo: I’ve been doing this in the middle, but I’ve been doing it for now. But in reality, these are the things I care about. So like making content and putting, editing some quick video together and having some of our photographers go down and shoot these pieces and give me back the raw files that we could work with.

[00:43:40] Rob Petrozzo: That becomes like therapy for me, like sitting and that’s the same for anybody who’s making this type of content. And it was making good content for collectibles for LeBron is one of those things where it’s I’ve gone my entire, basically adult life and young adult life watching this person who’s the same age as me go in the NBA doing these incredible things, but it’s polarizing me some way that does generate a lot of hate.

[00:44:00] Rob Petrozzo: And I’ve in the past been like F LeBron, Like I’ve been that guy too, the same way. Cause I came from The Kobe era a little bit. I’m like, no, I’ll ever be a Laker the way Kobe was. But you realize like when I started going through a lot of these files, a lot of that information, you realize how important a, these game worn jerseys from this era of LeBron are, and then B, what he’s done for culture in general, the cultural impact he’s had and how much I paid attention to it over the course of the last 20 years without even realizing it.

[00:44:24] Rob Petrozzo: It’s just so ubiquitous in such a part of your life and your conversation with your friends. You realize how important these are when you start putting that content together. I think a lot of what’s missing in the space for investment in general is that storytelling piece that goes back to me as a six year old or a seven year old trying to draw pictures in my parents restaurant.

[00:44:41] Rob Petrozzo: You realize how important that storytelling is, how important the look and the feel are. Because we’re in this crazy attention fight right now. Every single thing is content now and people try to take your attention. It’s Netflix and it’s work, irs phone calls, that’s text. And it’s got to call your mom at the end of the day.

[00:44:56] Rob Petrozzo: So you have this much time to get somebody’s attention. Sometimes it takes a really good piece of content around a collectible in particular to unlock that, Oh man, I really do care about this a lot. I just didn’t even realize it until I brought back this whole wave of memories from the specific moments.

[00:45:11] Rob Petrozzo: We try to do that as much as possible with the content. I think anybody. Auction houses, individuals who are doing it successfully right now are leveraging really good content and specific moments to bring people back to life and back into the moment. 

[00:45:23] Patrick Donley: Those videos really hit people’s emotions. And in a lot of ways you’re selling nostalgia, right?

[00:45:29] Patrick Donley: Like I shared with you, I was really into baseball card collecting as a kid. Honus Wagner and the Mickey Mantle rookie cards. I was like, I could never afford anything like that. But with your, with rally, like I could buy, the Honus Wagner card or Mickey Mantle Carter, portion of it.

[00:45:43] Patrick Donley: And I, I just think it’s really cool. The content. That I saw, I just saw a handful of your videos, like really touched an emotional chord where, just brought up this feeling of like childhood and nostalgia for me. 

[00:45:56] Rob Petrozzo: Yeah, dude, if that’s not, we live in this era where everything is, it moves so quickly and I don’t want to sound super old, but everything is commoditized in a way where it’s just.

[00:46:04] Rob Petrozzo: It’s an attention economy and you’re going to lose if you try and pay too much attention to any one thing. It feels like that. At least if some doesn’t give you chills and doesn’t make you care, there’s no reason to even give it attention at this point. there’s just too, there’s a lot of options right now for where your attention can go.

[00:46:19] Rob Petrozzo: If you’re just doing this to get them done. I find myself doing this at work a lot. It’s the worst way to live. You just onto the next, and nothing is sticky. You lose a little bit of a reason. And the reason that you have to get people is something that wakes them up. And if you’re not getting chills from looking at something or seeing something, you don’t have.

[00:46:35] Rob Petrozzo: a specific moment in time that makes you happy or makes you remember a moment. Nostalgia is such a big part of that. There’s almost no reason to do anything. If you’re just doing something for a paycheck, are you doing something just to make money? That to me is a little bit of a mistake.

[00:46:46] Rob Petrozzo: It took me a long time to realize that, but we’re at that point now where you walk out, we’re in the middle of Soho, I’m in our museum right now. And if I walk outside right now, the amount of inputs and the things that are happening around me are just so overwhelming. If you could stop for a minute and find something that makes you actually stop and care.

[00:47:03] Rob Petrozzo: And, gives you goosebumps for a split second. It makes you remember a moment from 10 years ago that you forgot about. That’s like a massive win. And that’s not sales. That’s just like bringing real life back to somebody. If we could do that, it turns into an investment. That’s great. But if you just see some of that content and it’s a little bit of a kick in your day, and it’s a way to start something new or think about something new, that’s also a win for us.

[00:47:23] Patrick Donley: Yeah. Say more about the cafe museum. you’ve got all of these collectibles. You’ve created it, it’s a brilliant idea. Like you’ve got this museum, tell us about the museum and what you guys are trying to do there. 

[00:47:36] Rob Petrozzo: Yeah. So we, when we first started it, a lot of it, it’s a little bit easier now to explain to somebody that these investments are real, but a lot of times it was like, I’m just funding somebody’s collection.

[00:47:44] Rob Petrozzo: Those things don’t even exist. So we were like, all right, we’ve got to find a space to put these, some of this important stuff on display so that investors and people can come in and see it and know that we actually have these things, that they’re real, that they’re super special, that they have a great story around them.

[00:47:56] Rob Petrozzo: So we had a really small space up on Lafayette, a few blocks up. And we put a car, we put just like a Lamborghini in the middle and had a couple things around it. And it was more of it meant for Instagram pictures. It was like big flowers and all sorts of stuff set up as an activation, but people liked it a lot.

[00:48:10] Rob Petrozzo: So we started to outgrow that space as a company. We found the new office a little further down on Broadway. And now we have 3000 square feet in the retail space on the downstairs that we use as our museum space. So We set it up with, again, similar, the most important assets on the platform and it rotates around every quarter or so we change out the assets, but right now it’s probably, 40 items, everything from one of our dinosaurs in the front window, we have two of our cars are one of our earliest IPOs was a 1955 Porsche Speedster is here, a Lancia Delta, which is really important group B rally car, some of Michael Jordan stuff, there’s a Warhol on the wall, there’s a Lombardi trophy from a Super Bowl.

[00:48:45] Rob Petrozzo: It’s all these things that really immerse you in a real life version of the app. And that was always our goal with the museum space. We don’t have, we don’t have a huge mark. We have no marketing team. We don’t do all of our work. Market has always been word of mouth. There’s no growth team. This is our marketing budget that was about putting this in a place where anybody could walk in, get a feel for what we do.

[00:49:03] Rob Petrozzo: On the weekends, we staff with our brand ambassadors and security and all that, obviously too. But you can ask anybody here, even the security about what rally is or about any individual asset. And they all could tell you the exact story, everything about it, why it’s important, what the pricing is, the relevance.

[00:49:18] Rob Petrozzo: And we’ve done that really intentionally so that people that come in here. To get that, if you want to win the attention economy, it requires some really good storytelling and requires some great things like this. So when people come in here, they’re not in and out. They stick around for 20 minutes, a half hour.

[00:49:31] Rob Petrozzo: They take pictures, they relax, they hang out, they’ll grab coffee. We have our cafe in the front of it, too. It really wasn’t intended to take the museum concept, whether it’s You know, everything from the Guggenheim to the Mets, all these places that are at the moment, there are these institutions in New York, they feel very, I love going to museums, I want to do it enough, but they feel very sterile at times, and we wanted to make something that was way more walk in at your own pace, I’m not going to annoy you, if you have questions, let me know, if you want to know about any of these things, it’s a QR code that goes into the app, If you want to buy shares in it, by all means, go ahead.

[00:50:01] Rob Petrozzo: But not a single person here is ever telling anybody to go buy shares. They’re just explaining what these assets are. So having that physical space has become a real important part of our community, but also an important part of explaining to people what we are, why it’s important. 

[00:50:13] Patrick Donley: Do you have a lot of your investors show up at the cafe, like checking out things and just hanging out?

[00:50:19] Rob Petrozzo: Absolutely. I was late for this call because we had two people here who flew in, who were here for a weekend, that I never met before. I knew that one of our earliest investors on the platform and somebody that’s got a bunch of assets that was in town, to see a Broadway show, he is I’m gonna, I’m in the neighborhood.

[00:50:33] Rob Petrozzo: I came by quickly. I’m like, yeah, of course. So bring them in, get coffee, show them around a little bit. Do the private tour. That’s a must. And that for us, when we did the opening, we had people coming in from Florida and from Connecticut and from Texas. You had people flying in specifically for the opening of this space.

[00:50:45] Rob Petrozzo: Those are investors on our platform and they’re not people I’ve ever met face to face, but we’ve had conversations. Everybody here, including myself, is doing customer service and responding to DMS is having a conversation. My phone number is in the phones of probably thousands of our investors and they’ll text me and we’ll talk about it at night like this is my actual life and it’s the life of a lot of people. The majority of our entire team right now are people that were collecting or cared about something here before they got here and that interest and the things they cared about, what led them to rally. So our investors are us. Like we built this around the persona of us.

[00:51:18] Rob Petrozzo: It turns out that there’s half a million people just like us that are on the platform now. That had that same feel. So when I’m, when I, when anybody comes here and I’m here all weekends all the time too, and I’m working, working in retail or doing, I’m behind the counter at their coffee shop.

[00:51:31] Rob Petrozzo: I’m trying to do as much as possible. Talk to anybody that comes in because more often than not, it’s just a natural conversation about the things you care about. It’s not a sale and that’s what we’ve always done. I think really well with this space and we’ve done really well as a team as well. 

[00:51:43] Patrick Donley: That’s awesome.

[00:51:44] Patrick Donley: Is it a challenge sourcing the items that you end up offering to investors? Talk to me about that process of finding out what you’re going to offer on the platform. 

[00:51:55] Rob Petrozzo: Yeah, it was. I think early on it was required because again, part of what we did with this platform and why it was successful is that.

[00:52:01] Rob Petrozzo: We want to kick a door down. We want it to make sure that everybody who cares about it has access when it comes to, especially, individual categories like art, it’s opaque by design. They don’t want small money and they don’t want people like me in there, like bringing my friends with me to pool our money together to buy a Rothko.

[00:52:17] Rob Petrozzo: Like they don’t want that. And that’s by design. So we had to come out of pocket and buy things probably more expensive than we should have and then mark them down for the platform and take a little bit of a loss early on. Now, as the platform’s grown, we haven’t just gotten the respect of individual collectors and of the brokers and the private dealers.

[00:52:32] Rob Petrozzo: A lot of the auction houses that we talk to now that I think early on, we looked at because At a certain point, I want them to be our competition. We realized that’s not competition. Everybody’s in the same space, building the community and building collectibles as a true investment vehicle, but as something that feels as obvious as investing in real estate would be investing in art or investing in collectibles.

[00:52:51] Rob Petrozzo: I think that now it’s become a community that comes to us. So more often than not, whether it’s an auction house or it’s somebody that has a great collection, they can come to us and say, do you want X, Y and Z? Here’s what we’re thinking about it. Maybe they’ll consign some of it where they’ll keep a portion of it in equity and then 60 percent or 70 percent of the other platforms that we’re all in the playing the upside together.

[00:53:12] Rob Petrozzo: But we have our kind of underwriting checklist, our standards, and 24 points that goes with everything from authenticity. The provenance to the value relative to auction comps, all the stuff you would expect that checks those boxes. But then we have relevant scores that we apply to something too.

[00:53:26] Rob Petrozzo: We want to make sure that something’s important in the past. It’s important right now. It’s going to be important for the future. whereas, an investor in real estate might look for a specific neighborhood that’s on the rise and a two family, so they can rent that and have ongoing revenue.

[00:53:41] Rob Petrozzo: And there’s all these elements of what you want in a home that you might purchase as an investment property. It’s not that different for individual assets here. The big difference is that for us, at least we give things a score that goes along with all those tangibles to say like the relevance of this asset of this item is going to increase in popularity as opposed to stagnate.

[00:54:00] Rob Petrozzo: And that’s always a big part of life. When you see certain comic books and certain dinosaurs, all these things still have movies and entertainment and huge communities around them and theme parks. That’s how you know the future is going to look bright in my mind for some of those assets as opposed to others, which are just like sitting by the wayside.

[00:54:16] Rob Petrozzo: They don’t get a lot of attention. It was going to require somebody to put a lot of work into it to make it relevant. 

[00:54:21] Patrick Donley: How do you determine the holding period? Let’s say I invest in, I don’t know, like a Mickey Mantle car. You actually didn’t, you buy Mickey Mantle’s childhood home or we did. We took by his house.

[00:54:30] Rob Petrozzo: Yeah. 

[00:54:31] Patrick Donley: That’s pretty cool. Let’s say I invest in that childhood home. What’s the holding period? Like how do I really, let’s say I am financially motivated. It’s not just nostalgia. How do I recognize that gain? 

[00:54:42] Rob Petrozzo: So right now, for that particular asset, as an example, that’s us as a world, we could create ongoing revenue.

[00:54:47] Rob Petrozzo: We’ve done a little bit of that to start already by monetizing the space. We make trading cards around it with a piece of the barn that came off. there’s elements of it that are easy to monetize immediately. We did that. And that was like a dividend check that went to investors. But for that particular asset, when we bought it, Our thought process was three to five years on that asset.

[00:55:03] Rob Petrozzo: And there were a bunch of factors around it. One is that MLB is an investor rally and we started a conversation with them about doing something with that space. It usually takes around 18 months from start to finish, to work with the MLB on an activation and that potentially adds value to it. That’s on the two year horizon.

[00:55:17] Rob Petrozzo: There’s a theme park that’s being built that’s from the, from a bunch of the team from Disneyland is building this giant theme park that’s, 15 miles away from the town. And we have the data that suggests when something like that happens in a space, here’s where tourism goes, here’s where property value goes.

[00:55:31] Rob Petrozzo: And that’s the, that’s within a three to four year window. So for us, along with the, with that particular neighborhood in commerce. And in that area where comps have been going, we’re able to put together the equivalent of a prospectus and an investment memo that speaks to that three to five year window as potentially reaching peak investment.

[00:55:49] Rob Petrozzo: And we also make sure that along the way we’re running votes and we’re running individual sort of conversations with our best around what they want out of it. So that the market deems that now is the time to sell because if something happens and anomaly that raises prices dramatically or drops prices and we feel like it’s not going to come back up.

[00:56:04] Rob Petrozzo: We’re in a position that we can exit and talk to our investor about that exit and go find a buyer on their behalf and solicit in the way that you would the same way if you were selling a home. 

[00:56:12] Patrick Donley: If I were to sell my portion of the Mickey Mantle home, it’s a marketplace. So I, how do I just sell shares to somebody else on the marketplace?

[00:56:22] Patrick Donley: Is that, 

[00:56:22] Rob Petrozzo: Yeah, so we have two ways that it sells. So we have a secondary market that’s run through register broker dealers that has bid ask and obviously certain assets are going to be way more liquid than others. Something like our Honus Wagner card has is a very tight spread, but certain things like some vintage literature and first edition books, I have a wider spread, but there’s always a bid and it might not be exactly what you want, obviously much like the stock market, but it trades and that’s something you can exit that happens usually 90 days after the IPO.

[00:56:49] Rob Petrozzo: The other side of it is that we’ll do whole exits. So we’ve done it. 72 individual offers have come in for assets on rally for the full buyout, almost like a hostile takeover. And 62 of those I believe have exited. So what we’ll do is if a qualified offer comes in or if an auction house feels that there’s a potential market for an asset and gives an estimate, we’ll bring all that data to our investors.

[00:57:10] Rob Petrozzo: They get a 48 hour window to vote yes or no, based on all the factors in their individual payouts. If they say yes, then it goes to our third party advisory board to ratify. And within 72 hours, they get payment out of it. So we’ve done that pretty effectively too. We’ve set a bunch of world records. We sold the most expensive video game ever sold was a 2 million Mario brothers that came from us.

[00:57:28] Rob Petrozzo: The most expensive modifier test roast that ever sold was a 332, 000 sale from us. So we’ve done really well at getting the best assets. But then if you want to buy, if you’re a wealthy person or an auction house who wants to list the best version of an asset, there’s a pretty good chance that one of those is on the rally.

[00:57:44] Rob Petrozzo: And we’ve become way more active in those conversations over the last year and a half. 

[00:57:49] Patrick Donley: Is that a part of the strategy you are almost hoping for? You called it a hostile takeover. Is it that part of the hope ultimately is like somebody really wants this Honus Wagner card and they. Yeah, you have to have, if 

[00:58:02] Rob Petrozzo: you want to have it, you got to come through us.

[00:58:03] Rob Petrozzo: I think that in establishing the relationships we have, part of it was even people who consigned to rally. A lot of that is a pool of potential buyers later for similar assets, and we’ve always made sure we maintain that conversation, but it’s also part of the acquisition strategy without question. I think that dinosaurs, as an example, when we went into dinosaur fossils, this was probably four years ago.

[00:58:23] Rob Petrozzo: We started that conversation. The first one went on the platform probably two and a half years ago. It was something where talking to paleontologists and geologists, talking to people, to financial advisors, to all the people in the space and started to bring up and tease dinosaurs to them, it became pretty clear that as a collectible for the ultra wealthy, they were starting to show up in living rooms and it was starting to be a situation where tech billionaires, celebrities like Leonardo DiCaprio has a massive collection of dinosaurs.

[00:58:47] Rob Petrozzo: Nicholas Cage has a massive collection of dinosaurs. Jeff Bezos tried to buy our dinosaur before we got it. It became one of those things that were like the zeitgeist and the cultural relevance of this thing was changing where the pool of buyers that before might have been like museums, it might have been somebody who was a private buyer somewhere overseas.

[00:59:04] Rob Petrozzo: It was a very niche kind of buying and selling group. We’re starting to open up and expand a little bit so we can provide access to a best quality example. Our triceratops in the front of our museum is likely the best triceratops in the United States, better than the one 

[00:59:18] Patrick Donley: That’s in the skull, correct?

[00:59:20] Rob Petrozzo: Yeah, that’s a skull that has 68 percent bone mass. And it’s got all these check marks that you look for in a triceratops skull. That was also something that Triceratops in particular and T Rexes were becoming the sort of playground for the ultra wealthy. There’s only so many, and there’s only so many that are 68 percent bone mass.

[00:59:38] Rob Petrozzo: There are only so many that are complete skulls. There are only so many that look like ours and are as symmetrical as ours. We look at individual assets and say, we want this to trade. We want to be active. We want to be relevant. At the same time, we need a pool of buyers to bring liquid to bring full exit liquidity to a certain point.

[00:59:53] Rob Petrozzo: And this is an asset that likely puts us in the best position for that. 

[00:59:57] Patrick Donley: Yeah, all of these are scarce assets, and it just seems like The price has got to be right for most of them. I don’t, I can’t, if you’re buying, 

[01:00:06] Rob Petrozzo: Yeah. our lawyer, my lawyer would tell me not to say no, Me personally. Yeah. But that said from a, you have the best example of something or a top 10 example of something in a space that has lots of brand new buyers with new money. And it’s also got relevance where the masses and regular people are paying attention to it on a regular basis. It’s something that we have confidence in the liquidity, the future liquidity of that asset by just checking as many of those boxes as we possibly can.

[01:00:33] Rob Petrozzo: And in reality, when you think about using the dinosaur as an example, that’s in our front window is the first thing everybody sees and they walk into this museum. Everybody immediately thinks it’s worth a million dollars. It’s only worth like 300, 000. It’s not because the market hasn’t really caught up with the visualization of what that market is yet.

[01:00:49] Rob Petrozzo: I think a lot of people. Need that reinforcement of it’s a deal and I had that myself too with dinosaurs. We started thinking about buying dinosaurs. I’m, like, yeah, we’re not gonna be able to afford dinosaurs. What are you talking about? This t rex just went for 32 million dollars We can’t we’re not gonna be able to afford these dinosaurs Then you start realizing like, this is an underserved market in my mind.

[01:01:05] Rob Petrozzo: There’s a lot of people who look at this and say, that’s gotta be worth a million dollars. It’s a dinosaur. They’re not making any more, right? Yeah. it’s one of those things that I’m making any more dinosaur, but it’s also something that is, there is not a single person you could talk to and doesn’t have an opinion.

[01:01:18] Rob Petrozzo: One way or the other, it’s either they believe dinosaurs didn’t exist. Yeah, Or like they remember from school. It’s something that’s always in the conversation. And you look at these really unique pieces of art, they’re like art. It’s this, it’s a, I’m looking at a 12 foot triceratops right now. There’s no reason this shouldn’t be a million dollars.

[01:01:33] Rob Petrozzo: Yeah, exactly. The market is what the market is right now. It’s a 350, 000 dinosaur. I believe personally that in the future, that’s not going to be the case. They’re going to go up to the right. But I think that from a visual perspective, making sure that it looks and feels the part is as important as anything else, because people are going to make their own decisions in their head.

[01:01:47] Rob Petrozzo: They want, everybody wants to reinforce intuition. They want to say I made the right decision. We’re trying to put as many of the right decisions in front of people as possible. 

[01:01:55] Patrick Donley: What’s your most valuable collectible right now? Like the asset that is the most valuable in the museum or just in general?

[01:02:02] Rob Petrozzo: On the platform right now we have a broadside copy of the declaration of independence. There’s probably 20 of those in the world and ours is a really complete, very well maintained version. That it was a 2 million IPO right now is trading at around 3 million. I think it went up to around four at one point, but it’s something that people didn’t even know existed.

[01:02:20] Rob Petrozzo: People thought that the declaration, a lot of people that came into the platform that bought that IPO originally thought that the declaration of independence was only a single copy and the one in the rotunda and in Washington DC and reality, that was a moment, obviously cell phones didn’t exist in the 1700s.

[01:02:35] Rob Petrozzo: But there were a bunch of copies that went to all the colonies so that somebody could literally read them in the town square. And this is one of those that has a really ridiculous provenance that goes with it. It was owned by one family for 300 years, basically 200 years. 

[01:02:48] Patrick Donley: What does that word mean?

[01:02:50] Patrick Donley: I’m not familiar with that. You’ve used that a couple of times. What is that? 

[01:02:52] Rob Petrozzo: Yeah. So that’s the timeline, the history and the story that goes with an individual asset. So it’s like what collection it came from. And sometimes it’s a more recognizable name or person that owned it or that it came from then another one that adds to the value too.

[01:03:03] Rob Petrozzo: So there are, let’s call 17, 18 individual broadside copies, engraved copies of the Declaration of Independence that were etched in that everybody has access to. That was read in a town square by one person, basically saying that, speaking to the independence of the country.

[01:03:19] Rob Petrozzo: So there’s some that passed through 20, 30 different hands. Probably that’s, I’m probably exaggerating, probably fewer than that. But there are others that stayed in one family. And that family was important in the construct of the creation of the United States. And this is one of those. So the provenance of the story that goes along with our copy.

[01:03:36] Rob Petrozzo: adds value, even though there might be an identical copy. If you put them next to each other, the provenance and the story that goes with this one has something that adds value to it because it’s basically tracked back to the founding fathers. 

[01:03:47] Patrick Donley: That’s awesome, Rob. This has been super fun and fascinating.

[01:03:51] Patrick Donley: I could go on and on talking with you. I know you’ve got a meeting to get to, but how can people find out more about rally, find out more about you, find out about the museum and cafe. 

[01:04:00] Rob Petrozzo: Go to rally, rallyroad. com has everything, but you download our app. We’re at a rally on Instagram. I’m Rob Petrozza across every platform.

[01:04:07] Rob Petrozzo: All I talk about is what’s happening at the rally. So feel free to reach out to me directly. And there’s like a good chance if you Google my phone number, you’ll probably find it. Feel free to text me or FaceTime me too. I do that all day with a bunch of investors. I’m happy to talk to anybody about any of this stuff at any point.

[01:04:20] Rob Petrozzo: It becomes part of my life whether I want to or not. I talk about this stuff even when I’m not at work. So I can do the same thing, talk for three or four hours about it. So feel free to contact me, anybody who’s listening. 

[01:04:29] Patrick Donley: You’re lucky, man. It’s fun, fun stuff you’re up to. And yeah, it’s just fascinating.

[01:04:33] Patrick Donley: It’s touching a chord with, I know it’s touched a chord with me and I’m going to check it out. I don’t know if I’ll make an investment, but we’ll definitely see, it’s cool stuff. You’re up to. 

[01:04:42] Rob Petrozzo: Thank you, man. I appreciate it. And again, I just want more people to know what’s going on. investments are great.

[01:04:47] Rob Petrozzo: Anybody who spends money on the platform is somebody I really appreciate, but more caring about what you’re doing and what we’re doing is such an important part of building anything. So I’m excited when anybody gives it attention. 

[01:04:57] Patrick Donley: Yeah. I highly recommend people check out your videos and it’s just guaranteed, like it will touch a chord with people.

[01:05:03] Patrick Donley: So thanks a lot, Rob. I appreciate your time.

[01:05:13] Patrick Donley: Okay, folks. That’s all I had for today’s episode. I hope you enjoyed the show and I’ll see you back here real soon. 

[01:05:25] Outro: Thank you for listening to TIP. Make sure to follow Millennial Investing on your favorite podcast app and never miss out on our episodes to access our show notes, transcripts, or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only before making any decision, consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.