- Creator Rosie Nguyen started Fanhouse in 2020 with two other cofounders.
- She said the strings attached to venture-capital funds and cofounder dynamics led her to quit.
- Nguyen explains what she would do differently as a founder if she were building the startup today.
Rosie Nguyen is in the middle of a breakup, only it’s with a company and not a romantic interest.
When the 25-year-old influencer and Fanhouse cofounder announced on social media she was resigning from the creator startup on July 12, a few hours before news broke that it sold to a company called Passes, the industry was stunned.
Fanhouse creators took to Twitter to voice their concerns about how this could impact the platform’s content guidelines, which Passes founder and CEO Lucy Guo addressed.
Nguyen launched Fanhouse in 2020 as a subscription platform for creators to monetize, share exclusive behind-the-scenes content, and connect with top fans. The idea for the startup was based on her own experience as a Vietnamese-American creator who needed to make enough money to financially support herself and her family.
“I didn’t really see a platform that captured the true monetary value of the average Gen Z creator, so I decided to build one,” the Los Angeles-based influencer, who goes by @jasminericegirl on her socials, has said.
It was Nguyen’s first time launching a startup, so she connected with acquaintances Khoi Le and Jerry Meng who brought expertise to the table that she didn’t have. She brought the creator knowledge, while they brought the established connections to venture capitalists, known as VCs, and engineering experience.
The platform rapidly grew after its 2020 launch, and the three cofounders started serious fundraising efforts. However, Nguyen’s dynamic with her cofounders and clashes with VCs on the direction of the company eventually led to her resignation, she said.
“Honestly, I wish I would have left it behind sooner,” she said. “I took a lot more shit than I needed to, and it just led to a lot of unhappiness because I was the face of a company where I didn’t feel like I was a part of the decisions.”
Here’s what Nguyen said she would do differently if she were launching Fanhouse today.
Letting in venture capitalists came with strings attached
Nguyen said she wouldn’t take venture capital funds at all today because of the strings attached to accepting millions of dollars, which she struggled with during her time working at Fanhouse.
“From my experience, creator companies just shouldn’t be VC funded because it’s so hard for creator and investor incentives to be aligned,” she said.
A year after launching, Nguyen and her cofounders raised $1.3 million in pre-seed funding led by venture capital firm Chapter One’s Jeff Morris Jr. and Mantis VC, a firm founded by music duo The Chainsmokers. In 2022, the startup raised a $20 million Series A round led by VC firm Andreessen Horowitz.
The added investments helped Fanhouse in many ways, like hiring more staff and paying creators more money through the platform. However, Nguyen said it made it much more difficult for Fanhouse to stay true to its original mission.
“As soon as you take VC money, the game changes entirely,” Nguyen said. “It’s no longer what the founders want; it’s now investors who own a very large percentage of your company, sometimes more than you do, who decide how you run the business.”
She recalled clashes with VCs on issues like Fanhouse’s 10% take rate, which were the fees the business collected from transactions on its platform. Investors wanted to increase that rate to boost the company’s profits.
VCs also wanted Fanhouse to experiment with technology like Web3 and artificial intelligence.
Nguyen pushed back against these ideas because she didn’t think they served the best interests of creators on the platform.
“From a creator standpoint, I thought our company was doing great, but investors didn’t, which is why they pushed for the sale of Fanhouse,” she said.
Instead of trying to fundraise from VCs, Nguyen said she’d raise money from creators themselves, so they would have a voice in how the platform is run. She’d also tap into equity crowdfunding like creator startup Gumroad did.
Without venture capital funding, there wouldn’t be as much pressure to scale the business very quickly, which she said can come from suddenly having a lot more money to spend. She thinks this hurt Fanhouse in the long run.
“We were much more productive as a team of five really charged, ambitious individuals than a team of 25,” she said. “I’d keep the team much leaner, which is easier to do when you don’t have VCs expecting rapid growth from you.”
Choosing a cofounder should be like choosing a romantic partner
Nguyen said she’d prefer being a solo founder if she was building a startup today. If she needed more help, she’d only bring on one other person who she really trusted and aligned with.
“I’m so thankful for my cofounders, but at the end of the day it was me, a woman, fighting against two men who were both engineers, knew each other, and were friends, so it was difficult,” she said.
For example, Nguyen recalled how she and her cofounders discussed equity right after they first launched Fanhouse. She said that Le and Meng, who had named themselves CEO and CTO respectively, wanted Nguyen to accept a small stake as an employee while they split the rest of the equity amongst themselves. Ultimately, she took a 20% stake, she said.
“In hindsight, if I started Fanhouse again, I would have kept all the equity for myself and just hired some engineers,” she said.
Nguyen also said founders shouldn’t just examine the skills of potential partners as she did — personality matters just as much, if not more.
“Cofounding is really like a marriage, and marriage is not just about love,” she said. “You need to find someone who aligns with your values, who you can build a company with for five or 10 or however many years, in the same way that parents raise a child together.”
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