Scrooge McDuck diving into a pile of venture capital.

What is it like raising money for an Animation Studio?

@pasql

From making money to raising money

Thinko is roughly 3 years old. The first version of the company was a Computer Entertainment Studio. Early days were us stumbling around like a toddler, taking random jobs, and then investing our profits back into our own fun projects. Some of those projects were so fun to work on, we found ourselves spending our nights and weekends on them, while working for the man to make some decent dough. Double dipping into our time was becoming taxing and frustrating though. Felt like running on an endless hamster wheel. About a year in, we raised a tiny angel round from our pals who encouraged us to focus on our own projects. We spread the cash pretty far, tried a number of things, but ultimately didn’t find the banger we were ready to devote years of our lives to. So rather than go back to investors to get more cash, we started making money again. Our internal projects served as a billboard to attract interesting clients. We had high ticketing clients this time around. We were a boutique shop. Ultimately we were working for a bunch of founders who were great at tricking VCs into giving them money, but had close to no chops to execute on product. In hindsight it’s prettttttttty amazing how little diligence VCs do these days? Anyway, we got good at being a profitable business, but we hated being an agency.

During the second phase of services work, our buffer expanded, and we started devoting more resources toward R&D. Before I was a designer, and shitposting about it on the internet, I was an animator. I left animation to chase some bucks being a designer. After a decade of pushing rectangles around in boring ass design tools, I wanted to get back into making computers do fun things again. I realized there were a lot of good things to import back into the dated Hollywood universe. I came back to animation with fresh eyes, a new appreciation, and a whole new toolbox of ideas…

An Internet Animation Studio

Doing both a consulting studio and animation studio was never going to work. The ideals are at odds with each other. About 4 months ago, we decided to terminate all of our client services, and focus on being a great animation studio. Not just any type of animation studio — one with internet and technology deeply woven into its DNA. The successful studios of today are behemoths born of another time (Pixar, Disney, Nick, WB, Cartoon Network, blah blah blah). The chaps running them are a buncha crinkly old white boomers, who tell the same stories for the silver screen over and over again. The world ain’t that tho chief.

They’ve been struggling to tap into the internet sweet spot, because their tools & infrastructure are for making productions at costs of millions per minute. They’d come to agencies like Thinko and people smarter than us to build consumer software, because they’re so out of touch. So we thought, well heck — we know how to make the internet, and we know how to do animation… why don’t we fuse our strengths together?

Some people point to companies like Brud and Toonstar as ‘internet studios’. I think they’re pretty cool, but they don’t cut the mustard for me. They use technology to lead art, and not art to lead technology, and it very much feels that way. The characters lack emotional depth.

Mr. Puppet is one of many tools in the Thinko Studio Ecosystem. We’ve been challenging the production and deal pipelines by building our own. We’re more cost effective by several orders of magnitude, which means we can match the frequency the internet thirsts for. And because our process is so cost effective, we can place more bets in parallel. WAY more bets in parallel. A big studio spends a fat chunk of money on one or two bets a year, in serial. We’re placing 6–8 in parallel a quarter. We’ve been working with creators who’d never get their foot in the door at the big boss studios. We’re willing to gamble with them, because we can try ideas quickly, fail cheaper, and iterate faster.

We want to become the best institution to produce great, diverse stories. We will pay and incentivize our artists better than other studios would care to.

Why raise money?

It sure looks cool to do a fundraise announcement post, and it’s a great excuse to install a couple copies of SuperHuman to chat with your Patagonia bros. I’ve historically despised raising money, because I don’t believe every idea needs to scale. Many ideas get screwed, because they get a thicc steroid injection of cash, grow too quickly, and then die because they develop tumors.

It’s been pretty weird touring an animation studio around NYC, LA & SF. NYC and LA get it. In SF, I like to play a game of guessing how long someone will burp “Oh, so is this a PLATFORM?” When I say no, their eyes gloss over, but then when I tell them we’re doing what they’re doing, they perk up again… funny. Unlike typical animation studios who use capital linearly, we’re interested in applying the VC approach to our studio. Place a lot of diverse bets, find the promising ones, and facilitate them turning into hits.

Walt Disney vs Thinko strategy comparison.

Software products decay, and are disposable. IP (characters, shows, music, and other memetic artifacts) is far more scaleable. Thinko is an IP factory. Thinko is a brand. Thinko is a meme.

Pitching & Meeting people

I’ve never really raised money before, and the idea had always given me the willies… but recently I’d seen a lotta folks raise pre product by playing a game of bullshit. For some people it seems like all they had to do was know a bunch of rich old white people? Their success strangely gives me hope, because I think what we’re making is legit cool. We bootstrapped something weird and fresh into the universe. I mean definitely cooler than APPS?

Feels like we kinda hacked the matrix by releasing our Mr. Puppet video. Pretty quickly after we dropped the video, angels, VCs, studios, & creators started flooding our inbox to take meetings & flapping their checkbooks at us.

A lotta people say fundraising sucks, and they’re generally right. But we’ve been having fun with it. We always bring our pal Burt Starling, (host of BNN) to every meeting, and have him warm the partners up. So far he’s been a pretty smooth talker.

UH IN SUMMARY?

We’re pushing forward with what we’ve already been doing at the studio. Fundraising can be such a distraction, but it’s a great way to test the structural integrity of the company. It’s been bootstrapped so far, so one way or another we’re going to make some insane shows or die trying. We’re still actively taking meetings, with investors, partners, weirdos, about to release a wave of new shows, and destroy the Walt Disney company (just kidding we’d really like to work with you too).

If you made it this far, thanks for listening. Always down to talk if you want to hit me with an email: pasquale@thinko.com

Pasquale, CEO, Thinko Animation Studio


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