Season 2, Episode 2: Raising a Seed Round with Against Gravity CEO Nick Fajt

**David Rosenthal** (0:00)
All right, I feel naked without my headphones.

**Ben Gilbert** (0:02)
Do you want to wear headphones?

**David Rosenthal** (0:03)
I guess I could, yeah. No, I don't want to wear headphones.

**Nick Fajt** (0:08)
Ben's got some earmuffs for you to put on.

**Ben Gilbert** (0:22)
welcome to season two, episode two of Acquired, the show about technology, acquisitions, and IPOs. I'm Ben Gilbert.

**David Rosenthal** (0:30)
I'm David Rosenthal.

**Ben Gilbert** (0:31)
And we are your hosts. As we mentioned in December, we're moving to a seasons format where we can do multi-episode themes and miniseries across episodes. This season's miniseries is on startup fundraising. So to date, we've exclusively talked about exits on the show, and we've glossed over plenty of fundraising events as part of these stories, but we've never really dug in. How do these rounds come together? What's the process? And what do different types of fundraising rounds allow a company to do? So our first episode is about the series seed of one of the most prominent VR companies in the market Against Gravity, the makers of Rec Room. And we are super, super fortunate to have with us today, the co-founder and CEO of Against Gravity, Nick Fajt. Nick is the co-founder and CEO of Against Gravity, as I mentioned. They're the makers of Rec Room, which is the VR social club where you can play active games with people from around the world. Rec Room is available on the HTC Vive, the Oculus Rift, and the PlayStation VR. And before that, Nick was a principal program manager at Microsoft working on HoloLens and Forza Motorsport.

**David Rosenthal** (1:35)
We're excited to have Nick with us. Longtime fans and listeners of the show might recognize Rec Room from our Oculus episode. And we are excited to dig in further here. Dig in further here. That was back when, well, you weren't raising around during that time. But it was shortly thereafter.

**Nick Fajt** (1:52)
Yeah, I think it was shortly.

**David Rosenthal** (1:53)
Yeah, this is almost like a follow up here. This is great.

**Ben Gilbert** (1:58)
This is a great time to tell you about one of our very favorite companies, Crusoe.

**David Rosenthal** (2:04)
So Crusoe, as listeners know by now, is a clean compute cloud provider specifically built for AI workloads. NVIDIA is one of their major partners. And literally Crusoe's data centers are nothing but racks and racks of A100s and H100s. And because Crusoe's cloud is purpose built for AI and run on wasted, stranded, or clean energy, they can provide significantly better performance per dollar than traditional cloud providers.

**Ben Gilbert** (2:29)
Yes, we talked about that on our ACQ2 episode with Crusoe's CEO, Chase Lockmiller.

**David Rosenthal** (2:35)
The other element that makes Crusoe special is the environmental angle. Crusoe, of course, locates their data centers at stranded energy sites. So, think oil flares, wind farms that can't use all the energy they generate, etc. And uses that power that would otherwise be wasted to run your AI workloads instead.

**Ben Gilbert** (2:53)
Yep. Obviously, it's a huge benefit for the environment and for customers on cost, since Crusoe doesn't rely on the energy grid. Energy is the second largest cost of running AI after, of course, the price you pay NVIDIA for the chips. And these lower energy costs get passed on to customers.

**David Rosenthal** (3:09)
It's super cool that they can put their data centers out there in these remote locations where quote-unquote energy happens, as opposed to the other hyperscalers such as AWS and Google and Azure, who need to build their data centers close to major traffic hubs where the Internet happens because they are doing everything in their clouds.

**Ben Gilbert** (3:25)
Yep. If you, your company, or your portfolio companies would like to use the lower cost and more performant infrastructure for your AI workloads, go to crusocloud.com/acquired. That's C-R-U-S-O-E cloud.com/acquired, or click the link in the show notes. David, you ready to dive in?

**David Rosenthal** (3:44)
As always, Ben.

**Ben Gilbert** (3:46)
All right. So the history and facts. Normally, we narrate a lot of this section until the company history for people. But Nick, since we've got you here, we'd love to just hear what is Against Gravity and what do you guys do?

**Nick Fajt** (3:58)
Sure. So Against Gravity makes Rec Room, which is a virtual reality social club where people from around the world can meet up in thousands of different rooms. And each room is a different experience. There are rooms for sports games, shooters, adventures to go on with your friends, clubhouses, escape rooms, comedy clubs. And some of these rooms are made by us, but increasingly more and more are made by the community themselves.