From creator to capitalist: The creator economy is investing in itself

The most successful creators no longer look like online personalities. They now operate as fully-fledged media businesses with capital, networks, and business expertise – and they’re using these attributes to help nurture the next generation. Alex Cooper runs Unwell University, a content creator programme for undergraduates, while Steven Bartlett is now offering financial backing and strategic advice to other creators. 

The founder-investor cycle  

Entrepreneurs investing in businesses they see potential in is nothing new. Angel investors and venture capital funds have been key in building today’s business ecosystem, particularly in Silicon Valley’s startup scene. 

In the traditional investment cycle, angel investors fund early-stage businesses, those businesses scale and both investors and founders realise returns. Buoyed by early investment, founders become not just a beneficiary of the system, but a financier of future growth. Angel investors typically provide funding, but those that have built their own successful ventures can also offer educational and strategic support, a network of contacts, and visibility. All of these contribute to making the next generation of early-stage businesses more likely to succeed. 

A similar cycle is happening in the creator economy. Steven Bartlett’s recent joint venture with global brand and entertainment platform Authentic, OBSN, plans to invest up to $400 million into creator-led businesses and digital intellectual property. This is the latest of several advancements that speak to the legitimisation of the industry. The US Small Business Administration recently issued guidance formally classifying creator-led businesses alongside film and video production. This reflects where the creator economy is heading: by 2032, nearly three quarters of creators will be video creators.

The creator economy is no longer a collection of individual voices online, but a burgeoning capital ecosystem of creator-led enterprises. Creators who succeed in building audiences and monetising can invest in other creators to help them do the same. 

How investment in creators differs from startup funding

1. Audiences are built first, the business second

Traditionally, founders have a business idea, and investors help them find their market. With creators, it works the other way round: investors are likely to support creators when they have demonstrated their audience reach, but before they have built their business infrastructure. Their brand might be strong, but the challenge is translating that into a viable product with commercial demand. 

2. The creator is the business

The creator is a fundamental part of the business that cannot be separated from its other constituent parts. The creator is not just the founder, but the brand, talent, distribution channel, and product. The upside is great, but so is the risk.

3. Creators can’t be sold 

The traditional angel investment model often accounts for a sale of the business, allowing the investors to collect their returns. This is much harder with creator enterprises. They’re intrinsically tied to their brand, so while the business attached to them can sometimes be sold, it’s hard to extricate it from the creator’s personal brand. Investors therefore need to look at alternative ways to build returns, such as an agreed share of revenues. 

The creator economy is evolving from a market of individual creators competing for attention into a capital ecosystem in its own right, in which successful creators help finance, develop, and distribute the next generation of talent.