What if venture capitalists invested in people rather than companies? Tech investor Sam Lessin is finding out, as Motherboard reported:
Earlier this year, his venture firm, Slow Ventures, set aside $20 million to invest in creators themselves. Now the firm has gone and done it, joining a few individual investors in spending $1.7 million in the future of Marina Mogilko, a 31-year-old YouTube personality with multiple popular channels that touch on topics like life in Silicon Valley and learning new languages.
Mogilko received the money up front, in return for 5% of her creator-related income for the next 30 years, plus 5% of any IP she develops during that time even after the 30 years is up.
On one level, I can see where Lessin is coming from here. If you’re not worried about your month-to-month existence, you can focus on taking risks and creating the best possible content.
But unlike investing in a company, where much of the legal liability for performance lies within the bounds of the limited company entity itself, tying a person to an investor for three decades raises all sorts of tricky questions.
What if she falls out with Lessin or the other investors and can’t get rid of them from her life? What might having an investor hanging around your neck do to your mental health once the initial glow of the cash wears off? $1.7m sounds like a lot, but over 30 years it’s less than $57k (around £42k) per year.
Lessin at least seems to be relatively fair with his terms here. The 5% payout doesn’t kick in unless she makes “hundreds of thousands of dollars”, for example.
But even if this particular deal is great for both sides, it’s easy to see how more VCs, tired of fighting to get into the hottest startup deals, might start experimenting with the creator economy. And not all will be as fair as Lessin. Will creators just looking for some security find themselves at the end of some very raw deals?