How to Reward Creators with Equity

40% of VC dollars raised are burned on Facebook and Google Ads. Instead of raising money for marketing, use your equity as a tool for sustainable marketing.

By rewarding creators with equity, you're finding long-term partners with a vested interest in your business’ success. Creators already have audiences and a proven ability to drive engagement.

This evolves one-off marketing campaigns into a collaborative team of creators ready to roll up their sleeves.

Here's how to start rewarding your founding creators with equity:

1) Determine what you're optimizing for: advisory, sign-ups, or sponsored content💡

  • Are you a pre-MVP startup and looking for creators to help you shape the product? Reward founding creators for helping you iterate on the product and provide weekly or monthly feedback. This allows you to reward the creators who help the most vs. the ones who drop off. No more awkward conversations about canceling advisory contracts!
  • Struggling with user acquisition? Use our affiliate tracking tool to pay in equity instead of cash and minimize burn. Especially for competitive spaces where CAC is high, this might encourage more creators to work with you -- $10 in equity is a lot more valuable than $10 in cash!
  • Want to work with creators who aren't interested in an affiliate model and prefer sponsored segments? Pay them the sponsorship rate as equity to align incentives and minimize burn.

In the past, companies would issue advisor shares that vested based on time. With Subscribe, creators can earn equity through their contributions and work. This rewards the creators who add the most value.

2) Set a budget 💰

How much equity should you set aside for creators? We recommend anywhere from 0.5% to 5% as a creator pool for distribution. If you have a Board of Directors, be sure to notify them and get approval for the equity pool.

Don't worry; you don't have to use all the equity right away -- think of this as a mix between your early advisors and an employee pool.

Creators are effectively freelancers helping you drive your business's growth numbers with their audiences.

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How to budget equity We recommend looking at your current or target CAC and using that as the baseline. For example, if you're paying $20 per conversion and currently struggling with marketing, offer $20 in equity per signup. This $20 can easily be worth $100 or $500 if the company continues to grow. The other benefit is that the creator now has a vested interest in the company's long-term success vs. just being a mercenary for the highest bidder, as you often see with cash. Remember, the number of shares being paid out can adjust as your company grows. If your valuation increases, the number of shares issued per signup or action can also decrease.

3) Get started on Subscribe and create a campaign 📝

Once you have board approval, set your creator equity pool size on Subscribe, and onboard your creators to work with you.

We have recommended templates for services agreements that you can customize for your needs.

Once both parties sign the agreements, you can generate links for them to use in marketing campaigns.

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.

4) Manage campaigns 📈

Once a campaign closes, Subscribe will generate the necessary documents to issue the warrants and a file for you to upload to Carta.

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Questions? Not to worry! Just email us at hello@subscribe.so ✌️