Creative Juice, a fund that wants to invest in Youtubers

Creative Juice, a fund that wants to invest in Youtubers

Creative Juice, a fund that wants to invest in Youtubers

This $2 million investment fund intends to invest in content creators whose fundraising is not always easy.

Investing tens or even hundreds of thousands of dollars in a content creator in exchange for a few percent of their Youtube channel. This is a bet made by MrBeast – Jimmy Donaldson on civilian status, a YouTuber with over 62.5 million subscribers who has decided to reinvest some of his earnings in the creator economy. The American surrounded himself with two partners, his manager Ezra Cooperstein and Seema Gandhi, a former Plaid fintech executive, to launch Creative Juice, a $2 million fund that will invest in Youtubers.

“Today, if you want to give away 5% of your Youtube channel, you don’t have the opportunity to do so”

Jimmy Donaldson explains that he drew on his own experience when presenting his concept. “I often had to deal with long payment terms, with some brands taking up to five months to pay you,” he told The Information. So in the early days, Youtubeur sometimes had no choice but to take out a loan to fill the gap caused by late payments. And to regret that content creators cannot, as a “classic” entrepreneur would, open their capital to investors who can bring them fresh money. “Today, if you want to sell 5% of your channel on Youtube, you don’t have the opportunity to do it,” says Jimmy Donaldson. run.”

“Unless you make very smooth gaming, lifestyle or art content, it becomes very difficult to get into the Youtube monetization program.”

This is all the more detrimental since running a Youtube channel is as expensive as it is difficult to make a profit. Gone are the days when content creators were content with a webcam and a piece of wall in their bedroom. Creations are getting more and more licked, even among those who are starting out. While the prospects for rewards have diminished, while Youtube, tied to ads attached to content glorifying terrorism, has reduced the chances of monetizing UGC videos with a pre-roll. “Unless you make very fluid gaming, lifestyle or art content, it becomes very difficult to get into the Youtube monetization program,” analyzes Vincent Manilev, author of Youtube Behind the Scenes. And brand partnerships have become harder to find as content creators have multiplied them, creating distrust among their audiences. As for the paid model, which consists of funding part of their channel by the community through platforms such as Patreon, Tippee or Utip, it remains in the minority.

Under these conditions, content creators have long had no choice but to turn to MCNs (multi-channel networks) – structures that support talent (exclusively or not) in exchange for a percentage of the deals they make. France experienced its golden age between 2010 and 2015 when Golden Mustache, Studio Bagel, Studio 71 and Webedia were at their peak. “Actors who acted with crazy margins, not always in a structured way, and who are now in decline,” according to Vincent Manilev. Studio Bagel’s adventure ended in anonymity, the Golden Mustache channel is getting less and less food, and Webedia, for its part, has lost a lot of talent. Who to take on? “In France, there is a CNC talent fund that provides assistance to some YouTubers,” notes Vincent Manilev. This internet video creator relief fund was established in October 2017 and meets five times a year to provide funding of up to €50,000 per YouTuber. It has an envelope of about 2 million euros per year.

In France, Squeezie launched its structure

On the other hand, it’s hard to imagine a French YouTuber taking on this role as a financier, as MrBeast wants to do in the United States. The French market is less important than its American counterpart, where reaching a million subscribers is (almost) commonplace. Only one could, according to Vincent Manilev, stick to it: Squeezie. “He’s already launched a structure that supports the likes of Kevin Tran, McFly and Carlito.” However, the support stops at the marketing aspect. Therefore, we are far from the Y Combinator model for YouTubers that MrBeast advocates.

Because Creative Juice will complement its financial contribution by supporting and mentoring the young shooters the fund has invested in. Jimmy Donaldson himself agrees that it’s hard to rate a Youtube channel. We assume that the number of subscribers, views and revenue generated will be the same number of indicators that are present in the valuation equation. In fact, not much different from the assessment of some startups, which is also often subject to some rationality and a lot of wet fingers. The example of Clubhouse, which became a unicorn, despite not generating a single euro of revenue and having less than 10 million subscribers, illustrates this well.

However, the main question remains: what are the exit prospects… and therefore the return on investment for the investment fund. In France, takeovers of Youtube channels are rare, and if they do, it is more likely through the company responsible for managing the partnership between Youtuber and the brands. Such was the case with Talent Web, the advertising agency responsible for talent such as Cyprien, Norman and Squeezie, with 26 million subscribers and more than 4.7 billion views in between at the time of the acquisition of Webedia in September 2015. almost 25 million euros, while the company’s turnover was 8 million euros and its Ebitda was 1.45 million euros. A ransom that a posteriori might seem even more expensive as the three YouTubers regained their independence six years later…