Inside the hectic and life-or-death fundraising saga of one of the most selective artists’ collectives

Co-founder Chris Howard: “All Rattle members are a bit nuts” who “share a common belief that good things don’t happen unless you’re prepared to break a few rules.”

The move to web3 fundraising was risky but The Rattle was done with traditional venture capital

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“Tomorrow it’s about mobilizing as much fuckin’ noise as possible,” said Rattle co-founder Chris Howard during a recent closed doors team meeting. “It’s the last 48 hours – Hail Mary. I genuinely think it’s possible.”

At the eleventh hour, exhausted by the traditional mechanics of venture capital, The Rattle pivoted its ongoing fundraising effort into a longshot – sell non-fungible tokens, or NFTs, to secure its future or close its doors forever. If they didn’t generate at least $100,000, the Rattle would cease to exist. 

"Shitting your pants yet?" laughed Howard's co-founder, Jon Eades, to the nine team members on the call.

The Rattle, based in Los Angeles and London, is an arts collective and venture studio that's welcomed through its doors the likes of Richard Branson, James Blake and Bloc Party. For five years it's been a refuge for artists and hackers looking to 'rattle' the cages of oppressive institutional norms.

One of the organization’s hallmarks and challenges is its unconventional business model. The Rattle employs a membership structure to build relationships rather than make money with the goal of co-creating companies with its members to generate revenue.

Because that model is unproven in the venture world, The Rattle deprioritized venture capital as a source of early funding. Venture capitalists tend to mitigate risk, restricting investments to formulaic, tried and true business models. The rinse and repeat approach naturally subverts innovation by rewarding conformity, forcing The Rattles of the world – and the freethinking artists and communities that have gathered beneath its auspices – to get creative. 

At The Rattle’s outset, Howard and Eades opted to raise money through reputable founders and influencers who could help them demonstrate their model’s viability. Through 2021, they had completed two official fundraises, earning backing from people like Imogen Heap and Robert Linney of The Chemical Brothers.

The Rattle didn’t take any venture capital until the pandemic put their in-person membership on life support. In the founder’s minds, though, venture capitalists were always going to be part of the equation: they can simply write bigger checks and – assuming the organization is performing well – they can write them for years.

As such, venture capital remains the fundraising standard. When organizations prove sustainable revenue, they have the capacity and the incentives to act as banks – because the more money the organization makes, the more money the venture capitalist makes. And more money for The Rattle means more money for the projects that venture capital doesn’t typically entertain.

The first Rattle Live event at the venue, E1, in Wapping

This past December, Howard started pounding the pavement to raise an additional venture capital round with two goals in mind: to build and expand creative innovation labs and to make The Rattle free for its 150 curated members. Since then, Howard and Eades have navigated perilous pivots, differing viewpoints on web3, a frustrated breakup with venture capital, and an inauspicious ‘Hail Mary’ NFT that dropped just as TerraUSD imploded and sent crypto markets crashing. As they fought for their community’s life, they granted me a peek behind the curtains.

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Howard, who refers to himself as “tech dad,” likes to dress casually. He smiles easily and has a mop of blonde hair. He oscillates from self-deprecating to affably eccentric and though he’s exuberant, he’s also a self-identified introvert – making his role as serial entrepreneur (this is his 16th fundraise) an intriguing life path. 

Howard began his career as a professional musician while earning his Ph.D. in computational physics and psychology from Reading University. After completing his postdoc at MIT and teaching at Harvard, he identified an opportunity to apply insights from academia and the startup world to artists’ careers: the seeds of The Rattle’s thesis.

Eades, tall and slender with slicked back strawberry blonde hair, saw a similar opportunity through his experience at the world famous Abbey Road Studios, where he spent nearly a decade in various roles. Most notably, in 2015, he founded and spun off Abbey Road Red, Europe’s first music-focused tech incubator. Naturally curious with a sharp wit, Eades maintains an abiding optimism in humans’ potential to be better, and his vision paired nicely with Howard’s. 

“We put our heads together and said, ‘why don't we combine all these experiences to create an  environment for artists, hackers, and weird people that mainstream business and mainstream startups completely overlook?’” Howard told me. “Let’s see if we can give them the tools so that they can fight on fair terms.” 

‘A bit nuts’

In 2018, The Rattle was born. Eades and Howard found a space in London and introduced a membership fee, where members paid to access teched-out studio spaces, the founders’ expertise, and a collective of like-minded people. The co-founders, in turn, built a core community who helped them understand the problems facing this particular brand of overlooked creative. What this group needed, Eades and Howard discovered, was a fellow co-founder and coach who could cultivate the seeds of their trailblazing projects with empathy and business savvy. So they built a team of mentors that reflected their growing community of overlooked ‘artists, hackers, and weird people’ and started raising money to support them. 

“All Rattle members are a bit nuts,” Howard shared in a recent press release. “They make music, tech, or other things that push the boundaries of music culture and share a common belief that good things don’t happen unless you’re prepared to break a few rules.”

It’s an inspiring rallying cry for the counterculture – 10,000+ have applied to be a member of The Rattle, making its 150-member community an exclusive enclave of creativity and innovation. But it’s a difficult sell in a world in which institutional investors seek to neatly categorize their portfolios into familiar business models. 

Read more: Music NFTs Become Latest Battleground Between Capitalists and Creators

From the outside, the Rattle looked like a music-focused coworking space, but as their long term goal was to create a venture studio that invests in member ventures, it also resembled an incubator, a fund, and a label. Howard and Co. have gone out of their way to deny these identities, declaring explicitly that The Rattle is none of them. Above all else, it’s a community united around a world-changing cause, and though it’s difficult to define, that cause remains the lodestone for myself and 149 other Rattlers.  

I first heard about The Rattle in July 2019. My own startup, Grey Matter, had been accepted to exhibit at Sonar+D, the tech and innovation hub attached to the major Barcelona music festival of the same name. An acquaintance told me I should link up with Eades, who was also in attendance. My acquaintance – and now friend and advisor – wasn’t sure exactly how to describe The Rattle, but he assured me we were aligned, united in a belief that musicians can be successful in an iron-fisted industry if given the right tools. 

I never had the chance to connect with Eades at Sonar, but through a circuitous route, I found my way back to the Rattle in the midst of a pandemic-stricken 2021. I applied and eventually became a paying member. I was excited to find what did indeed feel like an aligned organization at the niche crossroads of music, tech, and – soon enough – web3. 

The Rattle’s mission-oriented nature and organizational complexity make it well-positioned to consider web3 mechanics like tokenization. As the web3 ecosystem has matured, from DeFi to proof of stake protocols to DAOs, that potential hasn’t been lost on the founders.

“The beautiful thing about web3 is it completely removes the middle person when it comes to business models,” Howard shared. He and Eades have been discussing tokenization as an analogue to traditional equity for years, as it could theoretically sustain their complex model in a more elegant way.

“I believe that tech can only facilitate existing modes of behavior and Jon believes we can use tech to facilitate new modes of behavior”

— Chris Howard

Across numerous conversations this year, Eades and I spent hours discussing new models championed by organizations like Friends with Benefits (FWB), where myriad projects and products can be financed by a decentralized entity under the direction of the community. He and I share an optimism fueled by the belief that good actors can work to realign incentives around public good and the benefit of the collective. 

It’s been a slower embrace for Howard, though, whose background in behavioral psychology instilled a less favorable regard for the malleability of selfish human behavior. As he summed it up to me: “I believe that tech can only facilitate existing modes of behavior and Jon believes we can use tech to facilitate new modes of behavior.” 

In February, during a fundraising trip to the states, the duo discovered a new model that could conceivably marry their vantage points. They encountered a Silicon Valley startup called Vibe Bio, which had successfully raised investor money through a hybrid approach that linked traditional equity with tokenization. It seemed to be a good match for The Rattle.

Upon returning, Howard announced via his semi-regular newsletter – a quirky and informative brief on both Rattle wins and his week's fundraising progress – that The Rattle would indeed pivot the fundraise to an equity round that included options in a forthcoming security token. 

Opting to emulate Vibe Bio’s approach was the first formal indication of a turn toward web3. Yet because many web2 investors remain uncomfortable with web3 (and vice versa), the pivot would need to involve some reshuffling. “We've fundamentally changed our story,” Howard wrote. “That means many who committed to our round will need to re-evaluate.”

“Some will say, ‘why now?’”

At that point – though he lacked an all-important lead investor to secure the round – Howard had already drummed up more than $10 million in commitments. “Some will say ‘why now?! you seemed so close?!’ – you're right. We were at our fundraising need only 3 weeks ago,” he admitted in the newsletter. “But we balanced the risk of finding that lead investor on the old model vs figuring it out now and starting again.” 

In the new approach, Howard would seek a venture capital round of $30 million in $5 million chunks. The ultimate goal is to create a decentralized autonomous organization, or DAO, that would control the venture label and then sell itself back to its members, what’s known as an “exit to community.” It would make the venture label entirely community-owned. 

Starting again came with a significant risk, though. At the time, The Rattle only had enough money in the bank to cover operating costs for another three months. Howard wasn’t deterred, as he declared: “This is better for us, our members, and the future of the creator economy.”

As a member, I get access to The Rattle’s headquarters, a series of brick-laden rooms in the basement of Tobacco Dock – outfitted with music studios, workspaces, and a fridge always filled with Camden Pale Ale. I’m consistently impressed by the character and talent of the people I meet in the space. 

On many Thursdays, the space plays host to an informal dinner – an opportunity for the community to gather. After one such meal, on a chilly London evening in March, a few of us – including Howard and Eades – continued on to a nearby pub. We discussed the fundraising shift, and our conversation careened between idealism and skepticism, reflecting the founders’ contrasting perspectives on web3. It was clear, though, that they were united in the organization’s new tokenized direction.

Oversubscribed

Would-be investors responded well, too. In April, after two months pursuing the new fundraise, Howard announced he was close to closing the first $5 million. In fact, if all committed parties signed term sheets, it would be “oversubscribed" – i.e. the number of committed funds would exceed the initial fundraise goal. The future looked golden.

Yet only three weeks later, The Rattle’s incredible fundraising saga took another dramatic turn. Members could be forgiven for the backlash they may have felt. In his newsletter, Howard declared The Rattle was “going to battle against old-school money” and severing its ties to  traditional venture capital. 

“My experience of raising this round has been like slowly breaking up with a long-term partner you thought you were going to marry,” he wrote. “When you propose, they say yes – but they pull a no-show at the altar.”

On April 27, Eades and Howard hosted a town hall, calling it “the most important meeting in the history of The Rattle community.” To more than 50 members, the co-founders announced the Rattle Society, a new group of investors and supporters built around utility-driven NFTs that would support the existing Rattle community.

In light of crypto stigma, the co-founders were careful to frame the NFT as non-traditional and rooted in real-world utility. 

“It's a bit like an NFT, but instead of just a pointless graphic no one cares about, owning a Rattle Society token is like having a never-ending 'wristband' to The Rattle ecosystem,” read the subsequent email blast. “You can keep it, use it, trade it. It never disappears. And its benefits will continue to get bigger and better over time.” 

The token is described as “both back-stage and the front-row,” and “all proceeds from the sale of Rattle Society tokens are spent on giving Rattle members the tools, spaces, and networks they need to make world-changing things *before* needing to sell their futures away.”

The other significant takeaway from the town hall was more dire: if the Rattle Society didn’t take hold and meet a minimum fundraising threshold in just two weeks, The Rattle would fold.

It seemed impossible: to start from scratch (again) and learn how to mint, market, and distribute a token that could deftly coalesce elements of a complex business model – all in half a month. The team shifted into crisis mode. 

“I feel like I’ve been in a Netflix documentary the past two weeks,” The Rattle’s London-based community manager, Alexia Radkiewicz, told me. 

Rapidly, the team built a storefront and prepared to mint atop the Ethereum blockchain. The new Rattle Society website was revealed and four token types were outlined. Initially, graphics and utility were labeled “redacted” – the team was still fleshing out the grand scheme behind the scenes – but would-be buyers could sign up for text alerts to stay in touch. A consistent drip of messages and fear-of-missing-out mechanics fanned the proverbial flames. 

Over the course of a few days, NFT graphics and token details were revealed. Tokens called Party, Backstage, All Access, and FVC would be priced at 0.2 ETH, 1 ETH, 3 ETH, and 333 ETH, respectively. Utility emerged after that, with token holders getting varying degrees of access to Discord channels, festivals, and The Rattle’s physical spaces. 

Perhaps most significantly, token holders would also get allowlist rights and drop access for future tokens – including the anticipated Rattle Ventures Security Token: a “world-first security token used to support on fair and equitable terms Rattle Ventures’ projects and share in the financial upside across all past, present, and future ventures.”

With everything set, on May 6, the team launched the NFT pre-sale to the Rattle community. Two days later, in response to the community’s queries about whether purchasing the token would affect ongoing membership dues, Eades announced that The Rattle would use the moment to officially eliminate all fees for members – a good-spirited fulfillment of one of the fundraise’s foundational goals. Suddenly there was momentum, and with it, a twinkling glimmer of hope.

Then, on May 9, TerraUSD and Luna experienced a dramatic collapse, accelerating a $300 billion loss in crypto markets. The timing couldn’t have been worse. 

Nearing D-Day, on May 11, I was invited to join the core Rattle team’s daily call. Howard was mildly incredulous that his last-second pivot had been hit by a bear market bus – from the time of the announcement to the meeting, the price of ETH had dropped about 25 percent. 

But he wasn’t beaten yet. He announced that the sale would go public that day at midnight and it would conclude the next day, on Friday the 13th, testing the gods of both fate and superstition. He finished: “Let’s try to make this the most fun 48 hours of our lives. Just imagine the party we’re having if we nail it.”

On May 12, less than 24 hours from the deadline, Howard sent an impassioned email to all Rattle members and shareholders. “The Rattle isn't some for-profit crazy capital get-rich-quick thing for me or Jon,” he wrote. “I have ploughed my entire life savings and 5 years of my life into creating something that I hope changes the fucking world. To create something I wish existed when I tried to be an artist myself. To rid the planet of exploitative shitheads who prey on you all for 'cheap wins'...I give more shits than a wooly mammoth about making sure this thing lives and breathes, so you all change my kids world for the better.” 

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I checked my email for news several times over the next few days, and on May 15, Howard’s message arrived: “It was a success! But not a complete success.” The team had managed to sell 259 tokens for $111,000, which meant The Rattle would survive. But the windfall was a far cry from the $5 million The Rattle had been close to securing in early April. What happens to a roadmap when a budget is slashed by 98 percent?

As the dust settled, clarity continued to emerge: Membership will continue to be free for existing Rattle members. The LA space – whose landlord had previously asked all tenants to evacuate in July due to covid-related hardship – will not be renewed until the war chest grows. The Rattle will no longer target venture capital firms, but will accept private investment – Howard is already close to procuring more funds via this route. 

“The aftermath is so weird,” The Rattle’s community manager Radkiewicz told me. “We were all ready to pack down and say goodbye to this magical thing – it was getting to that point. Now that it worked, we have to figure out what the fuck to do.”

The real question is, in her words: “How do we stay true to our community and figure out the cross-pollination between them and this new Rattle Society?” 

Indeed, how can we change while staying true to ourselves? It’s an age-old question. But when communities gather around a shared purpose – like to “rid the planet of exploitative shitheads” – and decide to build value for themselves and others like them, it’s not as difficult to adapt. Everyone’s there for the right reasons, united by a shared vision: to change the fucking world.