The Block's Founder and CEO, Mike Dudas (via The Block).
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The Block is trying to raise $1.75 million and here is their pitch deck

TThe Block is looking to raise $1.75 million from investors, according to documents reviewed by Modern Consensus. This follows last year’s raise of $2 million. Should the effort succeed, this second round of fundraising would value the cryptocurrency news and analysis site at $10 million. [For the full investment pitch deck, see below.]

The Block lost a lot of money last year and will lose more this year. Additional cash will be a much-needed shot in the arm for The Block, which bled $747,000 in 2018 and expects to shell out close to $3 million by the end of this year. They’re hoping for $1.1 million in revenue by the end of 2019, with $560,000 coming from subscribers, and the rest from ads.

If all their dreams come true, subscriptions will be even more crucial down the road for the site, started last year by Mike Dudas. Of the $5 million in revenue they wish to see in 2020, $3.4 million will come from subscription revenue (the rest consisting of about $1.1 million from ads and half a million from events). Meanwhile, they’re budgeting a spend of $4.2 million next year.

The Block's pro forma as published in their pitch deck.
The Block’s pro forma as published in their pitch deck.

Again, these figures are hopes and dreams told to people with money to invest, not guarantees. [Reached by email, Dudas declined to comment.]

Their business model hinges on subscriptions. Right now, they have one service—Genesis—that goes for $1,000 per year or $125, a price, they note in their pitch deck, that “can be expensed w/o approval.” But according to an investment memo by VC firm Pantera, The Block is tossing around an idea for an institutional tier with an annual bill of $5,000 that would “allow for more interaction with team and data layer.” Presumably, this means deeper engagement than getting stuck in a Twitter thread with perpetual tweeter Dudas. Another thought they have is for a lower-tier subscription for $399.

Yet it doesn’t appear that these ideas have been all that much thought out. “However, they do plan do [sic] conduct more diligence on media pricing and benchmarking before introducing these new tiers,” Pantera said in its investment memo. [A full copy of that memo can also be found below.]

Pantera emphasizes how quickly The Block has grown during its brief existence, noting that it has built 250,000 unique monthly viewers in less than a half year. That’s 5% of market leader CoinDesk’s 5 million.

VC firm Pantera is putting more money into The Block. Pantera is contributing an additional $100,000 to The Block’s latest round of fundraising after also participating in the first $2 million raised. An email sent on Thursday, April 11, to potential investors from an associate at the VC firm named Lauren Stephanian noted, “The total co-investment allocation is $10k, but we also have $650k of potential allocation on top of that.”

Pantera has been mentioned about 37 times in The Block, and the firm has often received positive coverage.

Some of the firms that put in money in the first round were Coinbase, Floodgate, GGV, Boost VC, Greycroft, and Bloomberg Beta.

The Block is trying to position itself as “dedicated” and “high value.” Speaking of Bloomberg, no pitch deck is complete without a matrix that features the company in the upper right corner quadrant. Indeed, The Block also included a slide called “Digital Assets: Crypto Media Competitive Landscape,” with an x-axis ranging from “low value” to “high value” and a y-axis ranging from “hobby” to “dedicated.” In the upper rightmost corner is, as expected, The Block, with nearby Breaker Mag and—surprise!—Bloomberg.

[Editor’s note: We assume Modern Consensus is so far out in the upper right corner that we could not even be featured in this matrix.]

The crypto content world according to The Block.

This matrix is, of course, entirely subjective. No data was displayed to back up any of the placements. The New York Times, Forbes, Reuters, and the Financial Times, for example, were all lumped in the “Hobby/Low value” quadrant. Yet some of those publications have great crypto reporters. Nathaniel Popper plies his trade at The Times while Michael del Castillo, a former top reporter for CoinDesk, runs the blockchain beat at Forbes.

Pantera’s view is even harsher. While calling The Block “unbiased” and “one of the most trusted media sites in the [crypto] space,” Stephanian said that “the blockchain space suffers from a lack of reliable news sources.”

She added, “[n]ews sites like Bloomberg and CNBC that don’t solely focus on the space often miss a lot of coverage or report incorrect information, while news sites that do focus on the space are often susceptible to bribery and corruption, refusing to give coverage in some instances or giving too much in others.”

Mike Dudas’ feud with CoinDesk is alive and well. Amusingly, CoinDesk is mired in the upper left quadrant, indicating that The Block sees its larger competitor as “Dedicated/Low Value.” As Modern Consensus reported earlier this month, Dudas  got into a nasty Twitter fight with CoinDesk editor in chief Pete Rizzo. When someone tweeted they’d like to see where CoinDesk will be versus The Block in two years, the official CoinDesk account tweeted, “We’ll save you the time, one will be a multimillion dollar company, the other will be a sad, lonely man on Twitter.”

We’re not quite sure where Mike Dudas’ personal life will be in two years; he may well be sad and lonely and on Twitter all day. However, if he succeeds in raising money and somehow manages to get about 5,000 subscribers paying one to five grand a pop, he may also be helming a multimillion-dollar company.

With additional reporting by Modern Consensus Senior Editor Leo Jakobson.

Here’s The Block’s investment pitch deck:

“Final word”? CoinDesk’s Pete Rizzo is not going to like where this is going.
Defining marriage is very politically controversial but The Block is taking a stand.
The big names at The Block.
As Pantera points out, that works out to $99,300 per employee.
Five months!?! Also, as Pantera points out, they’ve been spending $80,000 per employee.
The money is supposed to help pay for their “Phase 2″—a push into gaining subscribers.
More than 200,000 monthly visitors.
The headline is true. BuzzFeed is high in sugar and Fox Business is pure fat.
VCs love this sort of slide, even if it doesn’t actually say anything.
“Delivered in a beautiful package?” It’s as if they’re promising Mike Dudas will show up to your door with printed copies of The Block while wearing nothing more than a Speedo.
The Block’s model is based on the idea that companies spending millions on analysts will be willing to spend another $1,000 for an annual subscription.
Crypto may be growing up but it’s still not in its awkward teenage years yet.
All those new wallets must be real people, right? They can’t possibly be fake accounts dedicated to manipulating crypto markets. </sarcasm>
Take that, Pete Rizzo! And burn, competitors CoinTelegraph and CCN! You can’t have a pitch deck without a matrix, even if it’s entirely subjective. We have a matrix showing “Started by late ’80s/early ’90s punk rockers” versus “People obsessed with New Jersey politics” and we’re in the upper right quadrant while absolutely everyone else in the lower left.
The Block is putting all of its hopes on its subscription product, Genesis. Some argue Genesis got better once they kicked out Peter Gabriel.
Here are the features The Block is looking to build out.
The Block is hoping 70% of its revenue will come from subscriptions. It expects to spend $300 for each subscriber, whom they believe will generate $1,200 in revenue. If subscriptions are $1,000 per year, you can do the math about how long they expect to keep paying subscribers. Also, an informal poll at Modern Consensus shows that absolutely everything we spend has to get approval first.
The Block will spend $3 million this year and $4.3 million next year in hopes to make a total of $6.2 million over the next couple of years. Mostly selling content. About crypto. Dream big!
The Block’s first milestone is to have 2,000 subscribers paying $1,000 per year. Those 2,000 people, they claim, will be the army preventing a major content or crypto-related company from muscling in on their turf. Forget Messari or CoinDesk—They’re going after S&P and Dow Jones, obviously.
You’re welcome! And, really, we should be thanking The Block because if they get the valuation they want, all of us in the crypto content business will look great. Good luck!

Here’s Pantera’s investment memo on The Block:

Wait, there’s a podcast coming and they’re spending $60,000 on it?
They have 7,700 email newsletter subscribers. If they could get just 1% of everyone in China to subscribe to their Genesis product…
“Hobby” was changed to “Not Dedicated” because Michael del Castillo and Nathaniel Popper aren’t mere hobbyists.


Lawrence Lewitinn, CFA is editor in chief of Modern Consensus. Disclosure: Lewitinn owns no cryptocurrencies in his portfolio.