Rob Petrozzo, the co-founder of Rally Road, was on ‘Off The Chain’ recently, a podcast for crypto-currency enthusiasts. Rob gives an excellent insight into the initial concepts behind the idea of Rally Road and where the company is heading.
As co-founder, one thing Rob focuses on is designing and delivering the very best user experience to the platform.
Rob also communicates a few aspects of the company I had not realized before listening to this podcast. It’s a fascinating conversation going inside fractional ownership with Rally Road co-founder Rob Petrozzo.
The podcast is hosted by Anthony Pompliano, a co-founder and partner at Morgan Creek Digital, an investment firm focused on digital assets.
Although Rob is not involved directly in the crypto industry, as a fractional ownership company, Rally Road is structured for potential future crypto integration.
How They Developed The Idea
Rob discusses how the idea of Rally Road came about with his two other co-founders, Max Niederste-Ostholt, and Chris Bruno, back in 2015 and 2016.
One of the motivations for starting the company was the realization that tangible assets were something wealthy people held during tough economic times while others might panic and sell out of traditional equity investments.
Watches, wine collections, cars, and other collectibles and alternative assets were something they wanted to offer by turning them into stocks.
Shaking Up Conventional Wisdom
He tells a story about his co-founder Chris, who years ago was deciding to buy a house or buy a classic car that he really loved.
As he asked for advice, the overwhelming feedback was to buy the house because of its rock-solid investment performance.
Fifteen years later, the house has no change in value while the car he considered buying has increased ten-fold. The realization that classic cars had actually outperformed many other investment classes over long periods began the journey to creating Rally Road.
Chris and Rob considered if they could turn expensive, blue-chip classic cars into stocks and offer them to average investors as fractional shares, it would be something that has never been done before.
From Idea to Platform
Figuring out the mechanics of this idea was no easy task. Packaging the concept so users felt confident depositing their money would be a considerable challenge.
Maybe a more significant challenge was meeting investment regulations and dealing with the U.S. Securities Exchange Commission.
It literally took the team years of back and forth with their lawyers to iron out the basic framework and structure. One important note is you do not have to be an accredited investor to buy fractional shares on Rally.
This means that the platform is truly open to anyone, where many fractional platforms require individual investors to prove accreditation status.
Starting With Physical Assets
Rob explains one of the biggest challenges early on was how to get people to invest in something that’s not a stock – through a mobile app on your phone.
They discuss how the initial offerings work on the app. There’s a cooling-off period, just like a traditional IPO on a stock exchange in the stock market.
After the 90 day lock-up period, there are ‘trading windows’ through traditional broker dealers where fractional shares can be sold and bought at a bid and ask price.
This is an important feature because the investor can exit the investment once a month if desired. A somewhat liquid investment without Rally Road needing to sell the entire vehicle is a crucial component of this structure.
Another point Rob touches on is why the Rally car prices do not ‘trade’ continuously, like bitcoin, for example, trades around the clock seven days a week.
He hints at growing the community slowly and educating users on what’s happening during the trading window.
As the community grows, I’m sure there will be a need to trade equity shares on a secondary market more frequently.
For now, it seems the Rally team is looking for price stability over potentially volatile price movements that could result from trading too often.
Sourcing the Best Deals
The podcast includes details on how rare collectibles are sourced and vetted to be offered for investment.
Rob explains the enormous risk and costs of buying and selling a collector car in the traditional system. The present-day collector car auction market is full of challenges that make the process very expensive and therefore “closed-off,” as Rob explains.
Rally has become an alternative to the auction market for existing collectors looking to sell their cars. I think this is an important point that is not well understood.
The Best Physical Assets
Rally Rd. can attract the highest quality sellers and the most desirable collector cars. Their process for procuring alternative investments and assets is much more efficient than the traditional auction system in place today.
Rally Road also purchases up to 10% of each initial offering on the platform with cash, and they cannot sell until an exit occurs. This aligns the company with investors entirely because of the desire to source the absolute best possible asset.
The company holds a relatively large stake in every asset, and they have the incentive to see a successful investment from start to finish, however long of a time period that may be.
The Future of Fractional Ownership
The podcast covers several interesting aspects of Rally Road that I found fascinating.
Anthony and Rob discuss where Rally is heading in the future, including retail spaces for collectible assets they call ‘living museums’ and how the company may be able to offer ‘dividends’ on an individual asset.
They also discuss potential future categories you’ve not imagined yet. Rob calls this category “intangibles,” such as backing individual artists, musicians, and athletes.
Check out the full podcast episode for much more on Rally Road and the exciting things the company is developing.
Rally Is On a Roll
Rally has come a long way in the last year or two. Since the podcast with “Pomp,” the investment platform has hit several major milestones. A critical moment for the New York City startup was raising a huge Series B funding round of $30 million.
The new funding round was led by a few top venture capital firms like Accel, Upfront Ventures, Porsche Ventures, Raptor Group, and Social Leverage.
Rally also announced George Leimer would take over as the new CEO. With the new capital, new leadership in place, and amazing Series A investors like Anthemis, rapper Nas, and Eli Broverman, Rally has the firepower to scale the platform as far as the eye can see.
The additional capital has enabled Rally to offer a huge new variety of alternative asset classes such as non-fungible tokens from Bored Ape Yacht Club, baseball cards, metaverse real estate, rare books, and rare comic books.
READ More About Sports Cards and Valuable Rookie Cards –
How Many Assets Does Rally Offer Now?
Every passing week, the list of unique and exciting Rally assets grows. Rally offers hundreds of fractional share investment assets, but it’s difficult to keep track. Dozens of new and exciting items are added every month.
In recent months, you can now invest in fractional ownership shares of VeeFriends NFTs, a basketball signed by Kobe Bryant, Lebron, and former-President Obama, and a Luke Skywalker Star Wars action figure from 1978.
Something For Everyone With Rally
The list of rare sports cards offered on Rally grows, but if cards aren’t your thing, there are plenty of options. How about a plot of land in the Sandbox Metaverse? A one-of-a-kind signed George Washington letter from 1780?
If you’re a private collector looking for the next investment opportunity but don’t want to drain your entire bank account to stock your garage with exotic cars, Rally has you covered with fractional shares.
Options for unique and never before imagined items in alternative asset investing have never been greater. Rally brings fun and excitement to fractional investing, and valuable assets will never be the same.
READ more about Fractional Ownership –