Podcast Summary
Investing in Creators' Future Earnings: Sam Lesson of Slow Ventures invests in creators' future earnings with upfront capital and a percentage of their earnings for a prolonged period, revolutionizing the VC industry. Bisley, a Patreon-like platform for small businesses, introduces the membership model to local businesses for recurring revenue.
Sam Lesson of Slow Ventures is making innovative investments in the future earnings of creators and entrepreneurs, such as YouTube creator Marina Magilco, by providing them with upfront capital in exchange for a percentage of their future earnings for a prolonged period. This new style of investment takes into account the potential for creators to build various businesses over time and could revolutionize the venture capital industry. Another intriguing takeaway is the introduction of Bisley, a Patreon-like platform for small businesses, which aims to bring the membership model popularized by streaming services to local businesses, providing them with a stable source of recurring revenue. The podcast episode also showcases the value of providing feedback and investment opportunities to entrepreneurs during live streams, leading to potential investments in promising startups.
Investing directly in creators instead of companies: Slow Ventures invests in individuals, aligning with creators long-term and providing upfront capital to help them grow their businesses and brands
Slow Ventures, led by Sam Lesson, is pioneering a new approach to investing by directly funding individuals, specifically creators, instead of companies. This shift recognizes the changing landscape where people build brands and communities around their personalities before launching products. Traditional venture capital focuses on investing in companies, but Slow Ventures aims to be long-term aligned with creators, providing capital upfront and helping them grow their businesses and brands. This model, often referred to as "adventure capitalism," offers creators the opportunity to improve their businesses and reach greater heights, with the potential for the most successful creators paying for all the investments made. This approach is particularly beneficial for creators who may not have access to significant cash and are currently relying on cash flow from their work. By investing in individuals rather than companies, Slow Ventures is filling a gap in the market and providing creators with the resources they need to succeed in today's dynamic creator economy.
Supporting individual creators for long-term growth: Investing in creators for long-term alignment and mutual benefit, rather than just owning a niche or audience.
The investment strategy discussed here is about supporting individual creators and their long-term growth, rather than just owning a specific niche or audience. This is a shift from traditional business models as companies get smaller and individual creators become more significant players. The investment in a creator, such as Marina, is seen as a long-term alignment, with potential for mutual benefit as the creator grows and produces more interesting work. The negotiation process was collaborative, with both parties working closely to structure the deal fairly and properly. Marina, as a sophisticated creator with good legal representation, was able to fully understand and appreciate the deal's potential benefits. The goal is to roll out more of these deals in a scalable way, creating a win-win situation for both the investors and the creators.
Creating a Profitable Structure for Funding Creators: Investment firms offer creators uncapped upside with lower costs through an LLC structure, while ISAs have caps and higher costs for non-winning cases. Early engagement with past customers for deals and exploring new audiences beyond Google and Facebook are essential marketing strategies.
The company structure for funding creators involves an LLC controlled by the creator, with the investment firm having contractual rights to a piece of the creator's earnout. The firm only makes money when the creator does, and the goal is to keep costs low for everyone involved. ISAs (income sharing agreements) have their merits but come with caps and higher costs for non-winning cases. The investment firm's version of deals offers uncapped upside and a lower average cost. For marketing, it's essential to start engaging past customers early for Cyber Monday and Black Friday deals, using custom audiences on social media and email. New audiences can be explored on various platforms beyond traditional Google and Facebook.
Aligning incentives and investing in uncertain business environments: Equity financing can help entrepreneurs own more of their companies, avoid dilution, and access more capital upfront in uncertain business situations
In an uncertain business environment, equity-based financing can be an effective way to align incentives and invest. Jay from Disruptive Advertising advises testing various digital marketing channels to reach new audiences and prepare for scaling. Equity financing is particularly beneficial when the outcome is uncertain or varies greatly. As the world moves towards more unpredictable income and careers, equity financing could become more prevalent. Entrepreneurs with significant debt face limitations in taking risks and starting businesses. The Lieberman family, successful entrepreneurs, have benefited from this type of financing through Disruptive's investment in their future ventures, allowing them to own more of their companies and avoid dilution. This approach values the long-term potential of their businesses and provides them with more capital upfront.
Entrepreneurs commit to investors for 30 years for upfront financing: New investment strategy allows entrepreneurs to skip seed rounds and own larger company stakes, but concerns include potential for being compared to indentured servitude and lack of data to properly price and test the model.
This investment strategy involves entrepreneurs entering into a 30-year commitment with investors for upfront financing, in exchange for giving up a small percentage of their earnings over the next 30 years. This allows entrepreneurs to skip every seed round and own a larger percentage of their companies with each new round. The criticism against this model includes it being compared to indentured servitude, which is a mischaracterization as investors have no control over the work product or decisions made by the entrepreneurs. A more valid concern is the lack of data to back test this model and price it properly, as it is a new and untested investment strategy.
Investing in personal brands or creators: The future is promising: Despite the current market's lack of financial ecosystem and liquidity for investing in personal brands or creators, their influence and potential growth make them attractive investments. Early stage crypto investors can directly invest in these individuals and communities, with tools like DRADA ensuring security and compliance.
The potential for investing in personal brands or creators in the current market may lack the financial ecosystem and liquidity compared to more established industries. However, the power and influence of these personalities and brands are expected to increase in the coming years. Crypto could potentially accelerate the creation of a financial ecosystem for these investments. As early stage investors, it makes sense to directly invest in the people behind these ideas and niche communities, especially given the uncertainty and potential pivots that come with startups. Security and compliance are crucial for startup growth, and tools like DRADA can help streamline the process of meeting regulatory requirements and preparing for audits.
Investing in creators and brands: A new market for compliance solutions: Dorado offers compliance solutions for creators and brands, a new market for investors seeking intellectual property value and creator influence.
Investing in creators and brands is an emerging trend that deviates from traditional venture capital investing. Dorado, a compliance solutions provider, is an example of a company that caters to this new market. The CTA for Twist listeners is to check out Dorado's reviews and get a discount at Dorado.com/twist. The speaker also mentioned that there are investors who are interested in this return profile, but it's crucial to distinguish between investing and being a service provider. The Hollywood agencies might be potential investors, but they need to decide which role they want to play. The speaker emphasized that ultimately, the value lies in the intellectual property and the creators themselves, rather than the services provided. This is a new and experimental space, and it will be interesting to see how it unfolds.
Focus on providing capital to startups, not services: Early-stage investors should concentrate on capital injections instead of offering services to startups. Market trends may result in higher prices for later-stage deals, but investors must be cautious and ensure deals benefit both parties.
Early-stage investors should focus on providing capital rather than services to startups. The investor's role is not to offer hand-holding or marketing assistance, but to bring financial resources to the table. This approach signals a positive understanding of the startup's independence and the investor's role in its growth. Additionally, the speaker emphasizes that the current market trend may result in seed investors paying higher prices to secure a place in later-stage deals. However, it's crucial to be cautious and ensure that these deals make sense for both parties. The speaker also touches on the success of some early investments, such as Solana, which have resulted in significant returns. These examples highlight the importance of making the right seed bets and focusing on providing capital rather than services. In summary, early-stage investors should focus on providing capital and avoid offering services to startups. The current market trend may lead to higher prices for later-stage deals, but it's essential to be cautious and ensure that these deals make sense for both parties.
Investing in underdog projects for higher returns: Successful VCs back unpopular projects, find emerging areas, and distribute crypto assets strategically for growth.
Successful venture capital investing often involves backing underdog projects that others don't believe in, leading to lower valuations and higher returns. This is a crucial aspect of the venture capital industry, as it becomes increasingly challenging to find undervalued opportunities as more investors enter the market. The speaker emphasizes the importance of identifying and investing in emerging areas, such as creator investing and decentralized autonomous organizations (DAOs), where there is less competition and potential for significant growth. Regarding the technical question about distributing crypto assets to Limited Partners (LPs), the speaker acknowledges that the infrastructure for managing this process is rapidly developing. While there are currently no definitive answers on the best time to distribute crypto assets to LPs, the speaker suggests that the process will likely resemble distributing shares in public companies in the near future. Ultimately, the decision on when to distribute will depend on the specific fund's investment strategy and risk tolerance.
The importance of patience and emotional control in investing: Investing requires patience and emotional control to avoid selling prematurely and missing out on potential future growth.
Holding onto investments, whether in traditional markets or cryptocurrency, can be emotionally challenging. The human instinct to sell after seeing significant gains is common, but it may lead to missing out on potential future growth. Private market investing offers the benefit of reduced liquidity, which can help investors avoid this pitfall. However, becoming a more mature investor involves learning to manage emotions and resist the urge to sell prematurely. A notable example is Facebook, which experienced a significant dip in value before rebounding strongly. The speaker, Sam Lesson, emphasized the importance of holding onto investments and shared his regret over selling Facebook stock too early. Ultimately, the key takeaway is the importance of patience and emotional control in investing.
Founder University Offers Investment Opportunities for Participant Companies: Founder University's pre-accelerator program has seen growth, with over 100 participants and investment opportunities for investors in participating companies for $25K-$35K. The program provides valuable content, networking, and education, resulting in successful launches like a Patreon-like platform for small businesses.
Founder University, a pre-accelerator program, has seen significant growth with over 100 participants and is now offering the opportunity for investors to invest in one of the companies for $25K-$35K. The program, which costs $700 and provides a mini MBA in startups in 12 weeks, has seen participants find co-founders and secure partnerships, resulting in the launch of a Patreon-like platform for small businesses. Despite initial concerns about messaging and charging founders, the program's value in content, networking, and education justifies the cost for many participants. The goal is to launch the platform and have money flowing through the system by December 1st.
Investing $25,000 for a 1% stake in a startup: Investing small amounts in startups for significant equity can build relationships, support promising ideas, and potentially lead to high returns for investors, while providing startups with valuable resources and mentorship.
Investing $25,000 in a startup for a 1% stake is a common tactic used by investors to build relationships and support promising ideas. The investor in this discussion expresses his excitement about the potential of the startup and believes in the team's hustle and passion for their product. This investment can provide the startup with valuable resources to grow and expand their business, and for the investor, it's an opportunity to potentially discover the next big success story. This approach can benefit both parties, as the investor gains a potential high-return investment, and the startup receives the financial support and mentorship they need to thrive.
Learning from peers in a venture capital program: Investing time and resources in peer learning opportunities, even with a financial commitment, can lead to valuable insights, new skills, and unexpected collaborations.
The value of a network and learning from peers cannot be underestimated in the entrepreneurial journey. The speaker shares her experience of a venture capital program where she not only gained valuable insights but also learned new skills from fellow founders. She emphasizes the importance of investing time and resources in such opportunities, even if it means making a financial commitment. Despite initial concerns about the cost, she believes that having "skin in the game" helps founders stay engaged and committed to the learning process. Additionally, the network and resources gained can lead to unexpected opportunities and collaborations.
Investment and Prioritization: Business success relies on people's commitment and ability to invest. Offer exclusive perks to early supporters and understand customer needs to increase satisfaction.
The success of a business or offering relies on people's commitment and ability to invest in it. The speaker mentioned an example of a course with a $700 fee, and while some may argue that it's expensive, the speaker believes that those who can't afford it likely don't prioritize it enough. The speaker also suggested offering exclusive perks to the first members or customers, such as early access, priority booking, and signed merchandise, as a way to generate revenue and create value for the early supporters. Additionally, the speaker mentioned the importance of understanding customer needs and preferences, such as offering flexible hours or exclusive events, to cater to their desires and increase customer satisfaction.
Value-added services and membership perks boost customer experience and loyalty: Exclusive beers, priority delivery, guaranteed skiing availability, VIP phone numbers, and mug systems are examples of value-added services and membership perks that can create customer loyalty and appreciation.
Offering value-added services or exclusive membership perks can significantly enhance customer experience and loyalty in various businesses. The discussion revolved around the examples of a ski lodge, a cooking class, and a brewery. For a ski lodge, providing guaranteed skiing availability during peak holidays can be a major selling point. For a cooking class, offering priority delivery or a VIP phone number can add convenience. For a brewery, providing exclusive beers or larger servings for members can create a sense of exclusivity and appreciation. Other ideas included a mug or locker system for a bar or cigar club, and allowing customers to take to-go beverages from a brewery. The key is to make the membership or perk program attractive enough for customers to want to commit to a yearly fee, rather than a monthly one.
Communication system for membership programs: Implementing a membership program with a connected communication system can boost patronage and loyalty, especially in hospitality. Send targeted alerts to members about events, promotions, or special offers to encourage repeat business and foster positive experiences.
Implementing a membership program with a connected communication system can significantly increase patronage and build loyalty for small businesses, particularly in the hospitality industry. This system allows business owners to easily send targeted alerts to members about events, promotions, or special offers, encouraging repeat business and fostering a positive customer experience. Unlike discount-driven group deals, this approach attracts loyal customers who value the business and contribute positively to the community. The success of this model can be seen in various industries, from gyms offering free protein powder to restaurants implementing laundry services in lockers. The key is to keep the communication simple and effective, ensuring that the benefits outweigh the costs and that members feel valued and engaged.
From Yelp-like app to Patreon-like platform focusing on SMS and email communication: Shifting from costly app maintenance to simpler and more effective SMS and email communication can save businesses significant resources and improve customer engagement.
Chris from Bisley.com shared their business model, which started as a Yelp-like app for small businesses but evolved into a Patreon-like platform focusing on SMS and email communication. Chris emphasized the importance of these channels as people generally prefer not to download apps or keep them updated. He also mentioned the significant cost difference between maintaining an app and email/SMS services, which is estimated to be $25,000 versus a quarter million dollars a year. This shift in communication strategy aims to make it easier for businesses and their customers to connect, and Chris invited questions and comments from shareholders. Overall, the conversation highlighted the potential of simplifying digital communication methods for businesses and their customers.
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