How Creators are Avoiding Venture Capital Funding Pitfalls

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Every month I write the “Lessons from the creator economy” column for Media Voices. In my latest piece, I explored alternative models to venture capital for creators.

The first thing people tend to ask when they find out someone is a creator is “how do you make money”. Readers will know that there is a fairly long list that serves as an answer to that question for creators – brand deals, ads, affiliate and so on. The same question is increasingly being asked of more traditional journalists too and is getting ever more painful to answer.

Alongside the methods listed above, creators bring in money via investment from venture capital funds. Creators often start businesses that offer various products, and VCs invest in those businesses on the understanding they will take a portion of them in the process. Creator products can be anything from chocolate like Mr Beast’s Feastables range, clothing and other merchandise to courses and digital templates. Gumroad is a firm that helps creators make some such items and now it wants to be an alternative to VCs too.

As the Publish Press newsletter from Colin and Samir reported, the company is going to invest in creator business but be repaid in a different way. They will take a 10% stake and get dividends back over time instead of waiting for the business to be sold, which is how VCs normally get a return on their investment.

Read the whole article here.

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