The year that everyone became a creator
Aspiring to be a successful VC isn't any crazier than aspiring to be the next Charli D’Amelio, right?
2020 was the year that everyone became a creator. From Youtubers, Tiktokers, and Substackers to no-coders, gamers, educators, sex workers, and more - if you make money online, you are now a “creator.” As Hugo Amsellem explains, “A creator isn't someone who creates. A creator is an individual who scales without permission.”
There are a few explanations for this craze. COVID drove so much leisure time online that it was finally viable for a critical mass of creators to earn a living by monetizing online content -- not just Charli D’Amelio and Mr. Beast. New creators are monetizing across multiple platforms -- they are multi-SKU creators. The average creator won’t be able to make a killing -- or even a living -- off a single platform. But if they stitch together revenue streams across TikTok’s creator fund, newsletter subscriptions, and NFT sales… they could make it work.
The savviest multi-SKU creators are those with symbiotic revenue streams. That is, each new activity or platform they engage with captures incremental value from the same set of core activities. Perhaps their Youtube audience wants to purchase a course from them. Or perhaps their newsletter gives them access to deal flow into high-quality startups, and individuals who want to give them money to invest.
Earlier this month, Packy McCormick of Not Boring announced his $8M venture fund. Packy, who was previously an active angel investor and deal organizer, has written about the natural progression from writing about interesting startups to investing in them. Formalizing his investing practice -- or investing SKU, if you will -- with a fund demonstrates Packy’s aptitude for capitalizing on his own personal flywheel.
In fact, there’s an entire article written about Packy’s flywheel. In “Million Dollar Newsletter,” Jake Singer writes:
“Packy is a better investor because of his writing, and he’s a better writer because of his investing. You can’t make up a better flywheel even if you tried.”
Packy is far from the only person who has parlayed online creation into an investing practice. Others have raised funds from their newsletter subscribers, Twitter audience, or former coworkers. TikTokers and other celebrities are also adding private market investing to their list of SKUs.
Private market investing is now a part of the creator economy, with the deal organizer or fund manager taking up the position of creator. It’s yet another SKU available to those looking to monetize an engaged audience. This SKU has been unlocked due to an inflection point in the private markets -- low interest rates, regulatory easing, and a renewed belief in the potential for massive technology and media outcomes. Venture capital -- while still inaccessible to 90%+ of the US -- is more accessible than ever before. And even for those who are still excluded, the private investing boom has made it more aspirational, perhaps just out of reach. How is aspiring to be a successful VC any crazier than aspiring to be the next Charli D’Amelio?
But the age of investor-as-creator is still in its earliest innings. Of the ~16M accredited investors in the US, only 325k made an angel investment in the past two years and only a few thousand organized a deal themselves. Qualified individuals -- who have strong deal flow and access to capital -- have stayed away from private investing because of the friction incurred. The transaction costs are too high, they don’t have time to wrangle LPs, and the legal structures and agreements are unnecessarily complex.
But remember, other creator SKUs faced similar friction not long ago. For years, TikTokers and Youtubers were told their professions weren’t legitimate, despite the fact that many were making a healthy living from their craft. Luckily, these creators had champions who helped to legitimize their businesses through media coverage and help them scale through the creation of business tools. Stir, a startup that launched in 2020, builds business tools specifically for digital creators. Their platform “easily plug[s] into” the other tools in their stack, such as Youtube, Patreon and Shopify. Another startup, Lumanu, just raised $12M to help build a suite of products that streamlines payments, collaborations, and more for content creators. Tools like Stir and Lumanu have made it more viable for online creators to stitch together multiple SKUs to make a living. The more individuals that succeed with this model, the more legitimate the creator career path becomes.
In comparison, business tools built for new entrants to private investing are lacking (to say the least). Many existing tools are simply marketing machines built on archaic service-based models. They are high-friction, costly, and manual. They lack integrations which prevent investors from meeting their “customers” (founders) where they are. They create barriers to entry.
There’s a huge amount of value to unlock within the private markets. But new entrants need tools that allow them to operate more strategically (read: reduce data silos, cognitive load, and context switching), otherwise they will fall prey to the unanticipated administrative burdens of venture. Access to the right tooling creates a competitive advantage for emerging managers and deal organizers that outweighs the operational challenges of fundraising, securing allocations, and managing investor relations.
It’s time to build, I guess.