It seems everyone wants—and is getting—a piece of Josh Richards these days.
He’s just launched a production company, CrossCheck Studios, with Hollywood megastar Mark Wahlberg’s production venture to focus on Gen Z content. “He is a titan,” Richards says of Wahlberg. “He is exactly someone that I strive to be like and love working with every single day.” Richards and Dave Portnoy, the iconoclastic founder of Barstool Sports, have teamed up on BFFs, a weekly podcast, to talk about shit. He’s a cofounder of TalentX Entertainment, an agency created by social media influencers to help others maximize their online presence. Richards also recently inked a deal to become the chief strategy officer of Triller, the TikTok wannabe owned by L.A. bad boy Ryan Kavanaugh’s Proxima Media. Richards’s new personal assistant at CrossCheck used to work for Kourtney Kardashian. He’s shopping his book, What You Should Have Learned in School but Didn’t. “Everyone wants my book,” he tells me by phone from Los Angeles.
And now, if all that weren’t enough, Richards has connected with Marshall Sandman, a former investment banking analyst at Goldman Sachs and former director of strategy at WarnerMedia, to start Animal Capital, a venture capital firm with a uniquely Gen Z flavor.
Don’t know Josh? You will soon. He’s barely 19, but he has 36 million followers across various social media platforms, including 24.4 million on TikTok—Richards says Kavanaugh pays him to try to migrate his TikTok followers to Triller (it’s complicated)—7.3 million on Instagram, 1.9 million on Twitter—“Milk is pretty dope” he writes in his Twitter bio—and 2.4 million on YouTube. “I was quoted a while ago” in Forbes “saying I want to be the first social media billionaire,” he says, “and that wasn’t a joke. I wasn’t just throwing that out there to make headlines. I mean that’s something that we’re striving for and I believe is gonna happen.”
It’s not as crazy as it sounds. According to Forbes, from June 2019 to June 2020, Richards was the fifth-highest earner on TikTok, making an estimated $1.5 million. (One of his videos on TikTok is of him, shirtless, tightening a strap under his chin to a green bucket hat while a Sergio Valentino remix plays.) Since 2019, his popularity has exploded, as has the value of his various investments. Michael Gruen, Richards’s 22-year-old business partner and all-around consigliere, says Richards has 20 different ways to make money these days, from his investment in Sillybandz—he’s making a “significant amount of money” from that, Gruen says—to TikTok LIVE, which Gruen says pays him around $3,000 for a live hit, to BFFs. “His podcast with Portnoy is a multimillion-dollar venture,” Gruen offers up. Red Bull wanted to team up with Richards, but he and Gruen decided to turn the offer down. (Red Bull didn’t immediately return a request for comment from Vanity Fair.) Instead, Richards and Bryce Hall, another TikTok star, started their own energy drink, Ani. “That’s our philosophy,” Gruen says. He says Richards’s net worth is around $22.5 million these days. And he’s just getting started. “I have lightning in a bottle right now,” Richards says, in one of his many well-rehearsed lines. “I have to maximize my opportunities.”
Richards also has a well-buffed backstory. He grew up in Cobourg, a town about an hour northeast of Toronto on Lake Ontario. He is the oldest of three children. His mother is a speech pathologist. His father is the Calculus teacher at the high school Josh attended. Beginning at age four, he walked to school with his father every day. He was always trying to entertain the older kids, he says. He was also an entrepreneur, busy dyeing lacrosse-stick meshes and designing T-shirts in the basement of the family home. “They’ve always just been fierce believers in me and my entrepreneurial spirit,” Richards says of his parents.
When he was 14, his sister asked him to be in a video on Musical.ly. The video “did really well,” he says. He decided to go deeper into social media. He hired his sister and gave her a 15% commission-based salary. He posted videos every day. And he started getting a viral following. “It started growing exponentially on its own,” he says.
In 2019, his popularity earned him an invitation to go on a series of “social media tours,” where he and other up-and-coming social media stars visited random American cities, selling tickets to other kids who showed up to hang with them in small venues like Marriott hotel conference rooms. “You meet 10 of your favorite creators,” Richards explains. People who paid more got to arrive early. Pictures were taken. A few pleasantries exchanged. Then the guys would get on the stage, talk a little, do a short dance routine, and move on. Sometimes 2,000 people would show up to see them. “I was a 17-year-old,” Richards says. “It was my first moment of realization of what I’d come across in a real way. We’re digital creators.” It was a bittersweet experience, though, Richards says. He made good friends and it launched him into the stratosphere. But, he says the tour grossed $1.5 million, while he was paid only $750.
He decided that kind of exploitation would not fly. He dropped out of high school and moved to Los Angeles. His parents had thought Richards would become a lawyer, he says, but they slowly got their mind around the fact that he was going to become a social media star instead. “Once they started seeing my passion for the social media side of just everything I was doing, and how I was making content every day and just striving to monetize my content, find different ways to make money, they knew that this was probably gonna be the path I was taking,” he says, “and I was gonna be successful at it.” The pragmatic Gruen says it was just a question of “opportunity cost” for Richards. Once he explained to his parents how much more money he could make as a social media star in L.A. compared to being a lawyer in Cobourg, Ontario, his family was on board.
In Los Angeles, he connected with Gruen, founded TalentX Entertainment, and joined with a group of other male social media stars to form something called Sway House. They lived together in a nice house in Los Angeles—everything is currently paid for by Triller, says Richards—and made videos and other nuggets. They became famous, in a certain 21st-century way.
The idea behind Animal Capital is simple: to capitalize on the Josh Richards fame machine and to create generational wealth. Sandman, 29, spent three years at Goldman as an investment banking analyst and then spent a year at the Jordan Edmiston Group, a media investment banking boutique, before getting recruited to WarnerMedia. One thing led to another and he got connected with Richards and the Sway House boys. Sandman learned that one of Richards’s mentors was Ashton Kutcher, who has also become a successful venture capital investor. Sandman says Richards and his buddies “end up getting this awesome deal flow but they didn’t really know what to do with it, or how to assess or evaluate or really think about the opportunity cost that exists between posting on social media for a brand where they’re going to get cash versus posting on social media for a brand where they are going to get equity, and the equity was taking all sorts of forms whether that was options, preferred equity, common stock, or warrants.”
Sandman helped Richards sift through the 80 or so opportunities he was considering. They ended up investing in three of the deals. Sandman says he noticed that Richards—who, along with other Sway House boys, has enrolled in VC school, according to a source—was being offered opportunities alongside some of the most respected venture capital firms, such as Andreessen Horowitz, Lightspeed Venture Partners, and Maveron. “This is a unique opportunity to write angel checks even if they are very small to get yourself into the room and to make economically durable decisions that could positively affect you for the rest of your life,” Sandman told Richards. They’ve looked at some 400 investments and made around a dozen small investments as angel—or earliest—stage investors. “Our little portfolio looks robust and exciting,” Sandman says.
They decided to form Animal Capital to open up the opportunities they were seeing to outside investors. The fund has about $15 million to invest, tiny by venture capital standards. But it’s a start. The idea at Animal Capital is to be a complementary investor to bigger venture capital funds, not a competitor, to make valuable connections and, at the right time, to boost the brands on social media. Gruen and Sandman are the largest general partners in Animal Capital. Richards and his buddies and fellow social media stars Griffin Johnson and Noah Beck, have smaller stakes. Among the limited partners, according to Sandman, are Anthony Scaramucci; Rich Miner, the founder of Android; Tyler and Cameron Winklevoss, Kevin Mayer, the former CEO of TikTok; and Sean Rad, the founder of Tinder. “Those are kind of the hot team,” says Sandman.
The gang invested alongside Andreessen Horowitz in Breakr, which Sandman describes as a “music democratization marketplace where musicians have the opportunity to work directly with social creators to book their music.” They’ve invested in PYM, a company started by Zak Williams—Robin Williams’s son—that makes anti-anxiety chewables. They’ve invested in Fairseed, a maker of inexpensive smoothies. They’ve invested in Chums, a Yelp-like online review site for products, as opposed to restaurants. One of the investors describes Gruen as an “apex social networker,” who is friendly with Steve Cohen, the billionaire hedge fund manager and the new owner of the New York Mets.
One question these guys don’t appreciate so much is whether Animal Capital—like the explosion of SPACs, or special purpose acquisition companies, or the meteoric rise of Bitcoin or NFTs—is an example of the market’s irrational exuberance. “I think this is going to be successful, knock on wood,” says Sandman. “But we are always thinking about the worst-case scenario.” Gruen dismisses the idea that the market is toppy. “We don’t have time to think like that, honestly,” he says. He says the fund’s risks are low because it is investing small amounts of money at a company’s earliest stage. When I suggest that is actually when there is the most risk and there might not be subsequent rounds of financing if the market cracks and that, as a result, Animal Capital’s initial seed funding could be lost, Gruen counters like a pro. “The way venture has been working and the way technology has been evolving, I think we’re going to be in a bull market for quite a while,” he says. “Even if we’re not, I mean again, we have capital. Cash is king.”
Richards is smoother and more diplomatic. He concedes there are risks in any new venture. “But,” he says, “I don’t think we can think about the doubts or have these lingering thoughts in our heads. We’re too busy. We have the horse blinders on and we’re pushing forward.”
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