Let's imagine a scenario real quick:
The year is 2012.
Coinbase just launched its platform for people to buy crypto.
In those early days, they reach out you with a partnership opportunity to help promote their platform to your audience.
But rather than getting paid in cash, you get paid in equity.
Receiving $7,500 in equity at the time would now be worth about $6.7 million.
Aside from the massive potential upside, why does equity matter?
Because you're receiving ownership for your efforts. You get to participate in the upside of the company that you're helping promote and I believe this is advantageous for both parties.
As a creator, if you believe in the brand, you may promote it even harder than a regular brand deal because when it comes down to it, you would be a part owner in the company. And because of this, you'd want to be sure that the company is legit and has a good chance to be sustainable.
For brands and companies, they may be able to build long-term, close-knit relationships with their creator partners because everyone's on the same team. Everyone wants the value of the company to go up because everyone has skin in the game. Brands also have more flexibility for offering benefits and perks in a long-term relationship.
But few brands are going to take the time to figure out how to pay creators in equity when no creators are asking for it.
So currently, two of the main problems with making equity compensation in the creator economy possible are:
But a company trying to make all of this possible is Subscribe.so
They want to play middleman between brands and creators, allowing creators to get paid via an equity stake in the brand.
This 3-party relationship is explained on their homepage:
"Creators bring the audience. Startups bring the equity. We provide the legal, marketing, and budgeting tools to align incentives for the long-term."
While late-stage companies most likely won't give up equity because they have plenty of marketing dollars on hand, pre-seed start ups generally don't and if they do, it's estimated that 40% of VC dollars are burned on Google and FB ads.
We know the importance of creator marketing and having a relationship with the audience, but brands don't. Yet.
But they'll learn soon enough:
So with this, I think creators hold the upper hand.
Brands need the audience, trust, and distribution - and creators have it.
For a new company, tapping into a creator's audience can help build immediate trust between their product and service and a group of viewers. For a new company this is extremely valuable, so creators should be appropriately compensated.
And for a creator taking a risk and putting their trust into a new brand, getting a little equity isn't unreasonable.
And after saying all of this, don't get me wrong, getting paid in cash is great. But it doesn't hold the same weight as equity.
And deciding to be paid in equity or cash isn't always a black & white decision - but I believe the choice should be there and I'm glad possible solutions like Subscribe are being built.
"Creators are realizing that ownership is how generational wealth is built and will be more inclined to work with founders who are willing to share the upside"
Creatorbread and The Loaf have no affiliation with Subscribe or any mentioned companies