I am most excited about platforms that enable creators to create meaningful engagement with their audience without having to be on an endless content hamster wheel. Elisabeth Garvin (founding chief of staff), Cristina Apple Georgoulaki (operating partner). Total Number of Addresses, Addresses With Balance, Zero Balance, Zero Balance Ratio: This data indicates the lifetime population of users and the protocols retention. The criteria for how we selected and sorted startups is as follows: We focused on startups that are already generally established in the space, meaning they are already funded or are publicly fundraising. ", Investor: Brian O'Malley, managing partner. "Seizing the means of distribution means that they can sidestep the algorithms, sidestep the taxes of the major platforms. Coming soon: Diving deeper into Go-to-Market Tactics and Strategies in Web3 #watchthespace. This will lead to the success of the creator economy. Given these facts, it is no surprise that the demand for content is rising and will only continue to do so. Insider has compiled our second annual list of the top venture capital and investment players who are funding startups that are shaping the creator economy. Danielle Lay, Investor at NEA, says, "Creators can move from fee based compensation to building wealth through equity in the communities they build. Eventually, Web2 opened the opportunity for every single user to create content for the first time. Marlon Nichols, the firm's cofounder and managing general partner, said he looks to invest in companies that help creators focus on creating without having to worry about protecting or monetizing their work. Creators are no longer just the product - they are the new economies. Located remotely, with its general partners split between Los Angeles and Dubai, CreatorLed is powered by a team of limited partners who double as content creators. ", Relevant investments: Creative Juice, Gather, Sanlo, Fanbase. Web3 is enabling the financialization of everything, with the theme of ownership at its core. Her creator economy investments include celebrity marketplace Protg and Newness, a beauty live-streaming platform. Thank you, your submission has been received! Businesses like these are sprouting up across Europe every week. Even though the firm was founded in 2020 it has already become one of the biggest players in the creator economy. Our primary sources of data were Crunchbase and Pitchbook, supplemented by our own deal flow, as well as conversations with investors from other VCs. However, in the first quarter of 2022, funding had dropped by 30% within the creator economy. The new creator economy will not only change the way in which content is created, but also unlock a world of entirely new tech and monetization opportunities that were simply not possible with Web2. While tools like Moby and Icy.tools may be used to track specific NFT projects. It removes intermediaries from traditional Web2 aggregators and gatekeepers, which is key for the democratization of income creation in the digital world.". "We're now in a world in which we've seen this power shift away from enterprise or institutions and corporates and companies and corporations truly down to the individual and what I would call the creator," said Megan Lightcap, a principal at Slow Ventures who previously worked at firms like L Catterton and J.P. Morgan. Doherty looks for startups that have a pulse on what creators' needs are and have a clear vision for how their product will solve those needs, she told Insider. Web3 enables creators to be finally compensated like the entrepreneurs they are. Now, she's a founding partner at 776 a venture capital firm founded by her former colleague, Reddit cofounder Alexis Ohanian. come for the tool), Web3 companies should have more of a bottom-up approach and design the tokenomics to reach and attract an engaged community. You can read the full article from Business Insider here. ", Relevant startups: Metafy, FORA, dumpling, Investors: Jarrid Tingle, managing partner, Founded in 2015, Harlem Capital is a VC firm with a mission to invest in "1,000 diverse founders over 20 years.". Im excited to see how things shape up!. Furthermore, its not just that anything is becoming investable, but also how we spend our time is becoming an investment decision. It is a truly horizontal trend investors are paying close attention to across the board. "What we're doing is trying to combine my traditional finance background [and Michael's] creator side of things," Kullberg told Insider. The US also happens to be the cornerstone of the global media ecosystem and home of Web2 creator giants of the likes of Myspace, YouTube, Snapchat, etc. "And then how entrepreneurial is the person? Thank you for reading our piece and we hope you have enjoyed it. After writing "Seed to Harvest" a children's book about venture capital during the pandemic, Paige Finn Doherty began building her portfolio of investments, as well as a community on Twitter of more than 30,000 followers. Silvia Oviedo Lopez, Head of Marketplace at Canva, says, I think that the community angle is going to be the most interesting [part] over the next little while and really brings a new lens to the creator economy. In the case of Mirror.xyz, you now have the opportunity to invest at the earliest stages of a publication in exchange for a token or NFTs so you effectively have ownership in that.. As we look into the new direct creator-to-follower relationships and at the future of the creator economy, we could not be more excited about the new native ways in which creators can earn an income, funded by and together with their communities, in what we believe to be the emergence of new and more sustainable economies. Theres a lot to figure out - but access, inclusion, and awareness feel like important next steps. Justine and Olivia are two venture investors at CRV that focus on seed-stage and Series A stage companies. I'm excited about three main segments: 1) creative tooling, 2) creator discovery, and 3) creator monetization. That is where the eyeballs are - wherever the creators are and so as a creator it's a very exciting time!, Adoption hurdle. As an example, if we take a blockchain-based game, founders should think if the game is designed and built for gamers only or if they can go beyond that and design it in such a way that third-party developers are incentivized to build on the platform. Founded by investor Chris Farmer, venture firm SignalFire has made several big creator economy bets since its founding in 2013. When we look at the data, it becomes clear that the creator economy is, by far, the largest in North America. We considered factors like the success of the startups in an investor's portfolio, and their relative focus and impact on the influencer industry as a whole. "Founders who innately understand these types of creators are rare, and the ones we focus all our efforts to serve. We can look to monetary policy to understand how tokens need to be managed. Sustainability and longevity are another huge pain point. It stands for community, brand and ownership.. This same technology makes content creation a very meritocratic system and that is exciting for everybody. When I speak with creators, I think there's going to be an adoption hurdle. This can be seen by the big rounds raised by companies including: Web3 is attracting more and more attention but from who? Co-founder Marlon Nichols was an investment director at Intel Capital before he cofounded MaC Venture Capital. There is still a long way to go for the growing middle class of creators the top echelon of creators is earning the majority of the revenue generated in the creator economy. "The second piece is whether there's a big market opportunity that the platform is tackling, and if so, what really is the go-to-market approach and how are they going to be able to tackle this large market in a proper, sequenced way. Investors look for volumes at launch (transaction volume and trade volume, payments volume, search volume, developer activity, # of wallets transacting on-chain, # of mints, etc.). Ultimately, Holloway looks for startups that help people access wealth by using the talent they already have, she wrote to Insider via email. Nicholss early investments include Gimlet Media, a podcast company that was bought by Spotify in 2019, and PlayVS, a startup that organizes esports events and tournaments for high schoolers and college students. As new opportunities continue to arise and all eyes turn to the space, we asked a few investors what they are most excited about, as well as where they see the biggest opportunities unfolding in Web3 - here are their answers. New technologies are just breaking down the barriers to entry which can only be an exciting thing. Some of these businesses were developed for influencer clients like Blippi, Charlie and Dixie DAmelio, Rhett and Link, Smosh, The Try Guys, R=Alisha Marie, Remi Cruz, and others. The company also funds early-stage startups like Pietra, a startup company that is helping creators create their own products. Started in January 2022, CreatorLed Ventures is an early-stage firm founded by general partners Blake Michael, a creator (and former Disney Channel star), and Eric Kullberg, a former banker and creator talent manager. You are incentivizing people through asset ownership as a way where they can actually build income, be part of a community and bring others to that community., No part of the economy will be left untouched. Atelier Ventures is an investment firm founded by Li Jin, which mainly supports early-stage creator economy startups. Some examples are personal websites, AOL and CompuServe - consumption only. And the last bucket contains ways that creators can make money. "For us, really what it comes down to is backing founders that have exceptional product intuition, and a lot of them have had experience as creators themselves," Fatemi said. The way we see it, Web3 startups should not only be able to attract and grow their existing audience by constantly engaging with it, but also be able to appeal and reach new audiences, particularly in new markets. "Capital efficiency is more important than ever now because you have fundraising risk," said SignalFire venture partner Josh Constine. The purpose of EFSI is to help support financing and implementing productive investments in the European Union and to ensure increased access to financing. What's exciting is this self empowerment of the individual, and that is the life-changing and major shift in humanity!. Web3 creator economy startups are popping up all over the continent. The new creator economy encompasses everything creators have always craved - ownership and community led platforms where all community members are compensated for their time and contributions. Is the gameplay captivating? However, they were just acting as conduits for these brands and businesses to reach potential customers and, therefore, usually had no real loyalty to the companies. However, the number of investors prepared to pour their resources into the creator economy is further proof of its potential. With that in mind, we expect the European ecosystem to continue to grow. Quinn brings a wealth of experience, having spent eight years on the equity sales and research side of Morgan Stanley, working on Facebook, Groupon, and Pandora's IPOs, before eventually working on branding and marketing at the London-based fintech startup Nutmeg. They graduated from Stanford in 2016 and co-founded the universitys Cardinal Ventures student startup incubator. Zibo Gao (partner) founded the firm in 2020, and has been focused on the Gen-Z market ever since. This led to a power imbalance between platforms and creators in Web2. Doherty launched her own fund, Behind Genius Ventures, in 2021 with Josh Schlisserman as a self-described "Gen Z" fund. The creator economy consists of people who, just like any of us, have a passion, or a hobby that they can monetize online. Online content distributors, such as YouTube, Facebook and TikTok have also all launched their own creator funds, allowing them to directly enter the sector and also helping them to entice creators to their platforms. This July, the firm announced it had raised another $7.1 billion across four funds. Social tokens are usually a small slice of a creators primary source of income, so creators tend to be very downside-focused in how they look at monetising their fans via Web3. From Gen Z VCs with social media audiences of their own to firms investing directly into content creators themselves, Insider narrowed in on 13 standout venture firms. The company was founded in 2019 and is a merger cross-M ventures and Nichols Cross Culture Capital. "Many creators are amazing at driving views, but only a small subset are able to drive that attention into commercial intent," he wrote to Insider by email. Consumers are increasingly moving online, pouring their attention and $$ into mobile as we head into a mobile-first economy. Blockchains are already starting to operate the backends of many software applications and, as part of Web3, have more potential to influence how we interact with the internet than mobile and the cloud did., New tools bridging Web2 engagement with Web3 loyalty. He's especially interested in creator economy companies that are focused on helping creators build businesses. as well as other partner offers and accept our, Color; Harlem Capital; Jump; Lightspeed; Marianne Ayala/Insider. The American Dream promotes the idea of the US being the land of opportunity and a high-risk, high-reward mindset is seen as a virtue. We considered factors like the success of the startups in an investors portfolio and their relative focus (and impact) on the influencer business as a whole. For this reason, we decided to ask a few investors for their thoughts on what they pay attention to when analyzing potential investments in the space. Jason Bergsman (executive vice president), Andreessen Horowitz Growth Fund III ($5B), Marc Andreessen (co-founder and general partner). Zero balance addresses are those that have transferred out all their tokens. So it makes sense that the creator economy would take off in the US before Europe. At Lightspeed Ventures, partners Nicole Quinn and Faraz Fatemi are both focused on the creator economy, among other areas. Community tokens - that are issued based on our contributions - may just enable many of us to have an additional means of income in the future - creating a new generation of wealth.. Latest fund size: $20 million, as of March 2021, Relevant startups: Moonpay, Pearpop, Beacons, Investor: Jess Lee, partner and chief product officer. Nobody wants angry fans whove lost money blowing up their comments (its happened before)! adds Sasha. They also do not provide options for creators to be discovered through their algorithms and only a few provide direct ownership, enabling all stakeholders to profit from their contributions. The two founding partners are in their early to mid-twenties, and BGV focuses on early-stage startups, funding preseed and seed rounds. From an economic perspective, this especially applies to how we create and transfer value online. Acrew Capital is an investment founded in 2019. Examples of metrics to quantify the quality of the engagement and health of a network are: Monthly Active Wallets: Unique users with active token wallets last month. I think of these as the lifecycle of the creator. 77% of creators rely on brand deals for the majority of their income, but brand deals can vary month to month. "As much uncertainty as we have, founders have," Nath said. Box Group invested in multiple social networking companies and creator-based startups like Brat TV, Byte (a short-form video app), and Clubhouse. He also co-founded the investment firm Initialized Capital. As a result, platforms are moving fast to build an increasingly multifaceted offering of opportunities. We are excited about the untapped potential of the new Web3 creator platforms and creators tools that enable these new direct creator-community relationships and that are built for the mainstream consumer, unlocking the next 100 million users in Web3. Karat was SignalFires most recent creator economy deal. Box group invests in pre-seed and seed rounds of financing for early-stage startups, with a primary focus on tech companies. With $700 million in a fresh investment fund, he is investing in companies like Substack, Cameo, Soundcloud, and Anchor. Sasha Kaletsky, Co-Founder of Creator Collective Capital, says, In addition, today, some of the most successful NFT-based games (e.g., Axie Infinity, Sorare) have a strong pay-to-win element, which is culturally quite out of sync with the Western free-to-play culture of recent years. ", The Metaverse. She also invested in Creative Juice through her $200 million early-stage fund Inspired Capital. The startup investments are led by Kimmel, with investments in startups like seven unicorns and Clubhouse. This is, we believe, where the next iteration of the category is headed towards. "At the same time, I think with companies that we've met that did not necessarily discover Index on TikTok, I think they've been struck that a venture capital firm is thinking about things like a TikTok strategy. In the first bucket are technologies that unlock new forms of expression I'm excited by VR, AR, and low-code / no-code creation tools. Starting Line was founded by Ezra Galston in 2018 and is a Chicago-based venture capital fund that invests in consumer startups and brands. At Forerunner, he focuses on "the empowerment economy," which the firm says includes all businesses that are finding new pathways for people to achieve financial freedom including creators. That way you're not starting from scratch with your fanbase, and can reward folks who have been with you from Day 1., The lifecycle of a creator. The aim of this list is neither to be exhaustive nor to rank startups, but rather to chart the rapidly evolving and expanding creator economy startup ecosystem. The goal of this creator economy report is to provide founders and VCs in the space with a general framework and insights for discussing the topic. And part of an economic downturn means those deals may bemore favorable for investors, as valuations reset to what is perhaps a more realistic level. The scout and ambassador program lead in the firm, John Smothers has been supporting companies in the creator economy like Buy Me a Coffee and Rosebud.ai. Ledger, also French, makes digital assets more secure with their crypto hardware wallet. Not only does it provide the opportunity for creators to offer more to their fans (including financial upside), but also for both creators and their communities to finally be able to participate in the collective value that they help platforms create. The company formed in 2019 as a merger between M Ventures and Nichols Cross Culture Capital. Lis strategy is based on funding companies that are part of the passion economy. MaC Partner Zhenni Liu said she similarly focuses on companies that simplify the experience of running a business as a creator. BBG Ventures is a VC firm that focuses on making early-stage investments in companies that have at least one female founder. Finally, we turned to the main actors in this new iteration of the space and asked a few creators what they are most excited about and what challenges they may face in the future - and here are their answers: Deeper and longer-lasting relationships - across platforms. In exchange for buying a percentage of an influencer's future profits for a set amount of time, Slow Ventures gives the creator capital up front. He has worked on investments in creator-focused companies like Discord, Patreon, and Dubsmash. Once you're done with this, check out our guide on Web3 go-to-market tactics and strategies. It is run by Peter Chernin, Jesse Jacobs, and Mike Kerns and the group has invested in social media-focused companies as well as esports, gaming, and health companies. So much of the current disruption within this new creator economy is in the distribution mechanism where you create and capture value and then redirect it to the core community, your earliest supporters, in acknowledgement of the value that they provide. In terms of its creator economy investments, the firm is focusing on companies with product-led growth. However, evaluating a team that builds in Web3 is not so straightforward. we discussed this topic in another article, SIGNALFIRE AFFILIATES BERAKOUT FUND II ($300M), Chris Farmer (CEO, seed investor in Stripe, Discord, Coinbase), Josh Constine (Venture Partner, ex-TechCrunch). The Chernin Group is a multi-stage investment firm focused on consumer businesses. They can now clearly see which way the wind is blowing when it comes to the creator economy and they want in. In her former life, Katelin Holloway was an executive in the people and culture departments of companies like Pixar Animation Studios, Klout, and Reddit. The firm has made over 300 seed-stage investments in startups in the creator economy. An example is YouTubers and TikTokers creating content for their fans. ShopShops was one of the groups most recent investments. He also co-founded several influencer-focused companies like Insert Name Here, Wakeheart, and Glamnetic. Formed in 2019 after the merging of investment firms M Ventures and Cross Culture Capital, MaC Venture Capital is a VC firm focused on seed-stage investments. If your company is not on the map and youd like to be included, just write me on twitter @VivoliPaola and well add you! 2021 was a pivotal year for the sector as Web3 took all sectors by storm. The company was valued at $7.5 billion just a few years later. From this point of view, it is no surprise that people glance at the creator economy with suspicion. Today, its difficult to define mainstream without decoupling it from mobile, says Robby Yung, CEO of Animoca Brands, so its arguable that, in the post-mobile world, nothing is mainstream unless its on mobile.. As a partner at Index Ventures, Woodbury focuses on creator economy startups. It was founded by Brianne Kimmel in 2019, and is backed by investors such as Marc Andreesen and Alexis Ohanian. UTA Ventures also partnered with YouTuber Emma Chamberlain (9 million subscribers) for her coffee product, Chamberlain Coffee. Insider is highlighting venture capital players funding startups making waves in the industry. Mac Venture Capital invests in creator economy companies like Brud as well as digital media companies like Blavity. In CRV the two sisters invested in Kapwig, an online video, image, and gif editing tool for creators. His first-ever investment at Index Ventures was Creative Juice (has a $5 million investment fund Juice Funds which invests directly into creators themselves in exchange for a cut of their future earnings). Index Ventures is a VC investment firm that has been around since 1996, and has $6.83 billion in assets under management. Creators are now in the drivers seat, being offered the opportunity to have greater control and individuality than ever before. A tool founders can use to monitor the activity includes Nansen - where you can see, in real time, which projects are taking off. The creator economy is no longer just about providing value to the platforms. "We definitely see a business case from attracting entrepreneurs and showing them what Index is all about," Woodbury told Insider in March. In order for a currency to store value, people need to trust it, inflation needs to be watched, and the goods / services that a consumer can receive in exchange for the currency needs to be valuable to the user.". Danny Rimer (partner) joined Index in 2002 and established the firms office in London. North Americans, especially in the US, are generally less risk averse than people in Europe. For the equity to sustain value for both the creators and their communities, platforms will need to help creators design tokenomics. Oops! That said, VC funding and valuations have downsized in some areas of the creator economy, such as NFTs, where investors have become more risk averse in the wake of tumbling prices. Now, for founders who are looking to build these new creator platforms, information on what investors are looking for and tips for how to ace their fundraise can be scattered, inconsistent and overwhelming. Seven Seven Six is an investment firm founded by the co-founder of Reddit Alexis Ohanian. Night Ventures is the early-stage fund of Night Media (a management firm for creators that manages some of the top creators like YouTuber MrBeast). Benjamin Grubbs (founder and CEO) was a global directory for creator partnerships at YouTube for almost 15 years before starting Next 10 Ventures. To this point, it is important that founders tailor their GTM strategy to the community they are building for. Influencers on their team include Graham Stephan, Nuseir Yassin, and Erika Kullberg. But before we start exploring the next iteration of the creator economy through the Web3 lens, lets take a step back and look at the historical evolution of the sector. He also co-founded two startups focused on working with creators: Creator+ and Kollyde. The firm has made some big moves and invested in seed stage startups in the creator economy: Uta Ventures is led by Sam Wich who has worked in the influencer space for over a decade.
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