Think about content creators as startup advisors who help with user acquisition. Most startups raise money only to burn the cash on distribution.
In fact, 40% of VC dollars raised are spent on Facebook and Google Ads. We believe that it makes more sense to skip a step and pay content creators using equity.
Paying creators in equity aligns interest of both parties long-term Some companies have figured this out and have even used equity defensively to win over a niche of creators.
Companies can use Subscribe to align interest with "founding creators" who want the company to succeed long-term.
- Content creators are rewriting the marketing playbook. Creators are 4x better at improving brand familiarity than celebrities.
- 92% of consumers trust creators more than ads or traditional celebrity endorsements.
- Creators are seen as their “expert friend” in a niche. 4 in 10 millennial subscribers feel their favorite YouTuber understands them better than friends.
If you're a late-stage company with a giant war chest and cheap access to capital (and Tiger knocking on your door), then cash probably makes more sense. Early-stage startups (Pre-Seed, Seed, Series A, and even Series B) are often priced out of the creator market. The top creator that you want to work with probably charges more than you’re comfortable paying in cash.
Equity is a tool to even the playing field for early-stage startups.
More importantly, you're more likely to have creators genuinely care about your company if they have a small ownership stake.
Creators are realizing that ownership is how generational wealth is built and will be more inclined to work with founders who are willing to share the upside.
This is always an option, especially for creators that qualify as an accredited investor and have extra capital to invest.
Be aware that some creators view investing and marketing as two independent items. This means a creator can invest in a company, but will expect additional payment for marketing services.
Subscribe has legal templates to issue warrants to align interest and ties issuance with performance. Warrants minimize tax impact to creators and minimize the impact on your cap table.
We also enable you to pay with cash if desired, whether as a blend (i.e., 50% cash / 50% equity) or directly (100%).
Disclaimer: Subscribe does not provide legal or financial services, and you should consult with legal or financial professional services providers if you have specific questions or need legal or financial services.
Yes, you need board approval in the same way you would need board approval to offer grants for employees.
Subscribe has worked with the top law firms in Silicon Valley to craft our legal templates. These allow you to craft your grants in various ways, such as affiliate or by the project.
If you already have relationships with creators and legal documents in place, it might make sense.
For most founders, it’s not worth the time and effort running this internally.
Our goal is to standardize these documents and save you (and your team) time tracking performance and researching legal paperwork.
Subscribe recommends which legal templates are necessary ($8k value), performance marketing tracking, and equity budgeting tools to help you succeed.
If you don't have relationships with creators, discoverability via Subscribe is a huge benefit since most creators can easily get 10-100 opportunities in their inbox every day.
Subscribe only works with angel and venture-backed startups, so creators know that opportunities have been vetted.
Subscribe is currently in closed beta and looking to work with angel and venture-backed startups with at least one notable investor (i.e., YC, Techstars, Jason Calacanis, etc.).
Companies can join the waitlist here: https://bit.ly/SubscribeStartup