Slow Ventures recently made headlines when it announced its plan to allocate $20 million specifically for investments in individual creators. This move, which may seem unconventional to some, has brought up debates about the ethical implications and potential benefits of funding individuals rather than traditional companies.
Key Takeaway
Investing in individual creators rather than traditional companies is becoming more common, with venture firms like Slow Ventures and Mythical leading the way. This approach may offer creators more flexibility and the potential for long-term success. However, ethical concerns and the unpredictability of individual behavior remain important considerations in this evolving investment landscape.
An Unconventional Approach to Venture Capital
While investments in people, rather than companies, may initially seem perplexing, this is not an entirely new trend. Companies like Spotter and Jellysmack have already begun providing upfront cash to YouTubers in exchange for access to their back catalog. Additionally, Mythical, the entertainment studio owned by YouTube stars Rhett and Link, launched a $5 million venture capital fund specifically for creators in 2021.
Slow Ventures, in particular, made headlines with its deal with Marina Mogilko, a language learning YouTuber and co-founder of LinguaTrip. In exchange for $1.7 million in capital, Mogilko has agreed to give Slow Ventures 5% of her earnings for the next 30 years, including any revenue generated from intellectual property she develops during that timeframe.
The Long-Term Approach
Slow Ventures has already entered into several similar deals with creators, and the firm hopes to close a few more before the end of the year. Though this investment strategy may have seemed intimidating or predatory in the past, the firm emphasizes that these deals allow for flexibility and do not obligate creators to remain solely focused on their YouTube careers.
Slow Ventures principal Megan Lightcap explained that the firm is deeply aligned with creators over the long term, allowing them to participate in any potential upside of the creator’s ventures. This long-term approach helps keep the cost of capital low and provides creators with the freedom to explore other opportunities, such as pursuing higher education.
Creator Businesses – A Lucrative Investment
From a venture standpoint, investing in creator businesses can be highly appealing. Unlike early-stage startups that often operate at a loss, creator businesses typically work towards profitability from day one. This profitability factor makes these investments even more attractive to venture firms.
Both Slow Ventures and Mythical are particularly interested in creators with an entrepreneurial mindset. They are seeking creators who are willing to take risks and explore multiple ideas, rather than purely focusing on content creation. This mindset aligns with the firms’ goals of discovering the next big entrepreneurial success.
Ethical Considerations and Potential Risks
While these investments may hold promise, there are moral and legal concerns surrounding the treating of human beings as companies and entering into deals that encompass all potential intellectual property. Critics question the ethics of these agreements, as well as the potential consequences if a creator involved in such a deal engages in controversial or harmful behavior.
However, it’s worth noting that even “canceled” creators can often maintain an audience and continue generating revenue. The impact on venture firms in such scenarios is minimal, as they have only invested a few million dollars in comparison to the size of their overall funds.
