EP0017 Ethical Partnerships & Venture In The Creator Economy

Freedom! You're listening to the Daily Motivation Podcast, a place to take your life to the next level. Your business, your fitness, your dreams. Let's go! Now, hey, your boy Cauveé Inspiration Engineer. You already know what it is. Welcome back to another episode of the Brain Builder playlist. Where we are building personal brands for the creator economy, make sure that creators and entrepreneurs can go from brands to brands that are businesses, and helping creators create lasting, defining category change. Whether you are an entrepreneur, speaker, coach, consultant, author, streamer, gamer, venture capitalist, whatever it is, if you have a personal brand, then you are in the right place. On today's episode, I want to talk about partnerships and venture because this is really on my heart, this is really on my mind, on my consciousness, because there's a new narrative out there that CAA and some of their subsidiaries or some of these companies, they've got this publication going out, $350 million fund or something of that nature. The number is not relevant, okay? What's relevant is that the person who shared the content— the information that I read said that looking to own creator brands. Keyword own. I come from the music world, I come from the music industry, and I automatically have red flag bias immediately. The name of this episode is Partnerships and Venture because I'm going to talk about the dynamics of quality partnerships in relationship to this word own. Own. Okay, now ownership, in the generality of the word, there's nothing wrong with ownership. But if you're saying that you're talking about a human and you're saying I'm gonna own you Again, that's a red flag. Ding ding ding ding ding. Not sure if that's the direction we want to go. Now, until I look at a contract and a deal, and until we can actually go into it, I'm not going to say an opinion regarding what this CAA situation is. But here's what I'll say, coming from music, majority of the record labels want to own and do own their artists. On top of that, they own their image rights. And if you look at a lot of artists, when they come in, they're all sweet and delicate and innocent, and they've got all these very innocent, uh, we'll say brand, brand assets— their artistry, their persona, all the things. And by year album 5, it's dark, it's Sinister. It's different. And we'll just leave it at that. We've heard conspiracy theories and/or conspiracy truths regarding Hollyweird— I mean, excuse me, Hollywood— and, you know, what goes on in that world. All I'm going to say for today, keeping it 103,000% transparent with y'all, is that we're ultimately talking about ownership of an artist, which is a human. So when I got into entrepreneurship, this is like 2015, 2016, I started seeing how it works, right? I started learning that different entrepreneurs were going to mentors and advisors and then raising money. And I was an assistant, I was going to a ton of the events, and I was seeing how the Facebooks of the world were being built and how they were coming about. And what I noticed, what was so different and so similar at the same time, was these technological companies, these technology brands, they needed to get 1,000 customers or 1,000 fans or build what they call an MVP, minimum viable product, and then to have something that would be worthy of getting the intention of an investor to be able to raise money into them. Okay, and that comes with equity, that comes with certain structure. That comes with certain expectations on both parties. There, there's a lot to it, and we're not going to unpack all of that today, okay? We're not going to get into that fully today, but all in all, it's more of a partnership dynamic within venture and within partners. Why do we partner? A person that partners with someone is partnering because you do things or you have things that I don't have, whether that's resources, whether that's network, whether that's capital, whether that is fill in the blank. You've got an asset that I don't have, and vice versa. I've got something, whether it's my art, whether it's my brand, whether it's my business, my intellectual property, whatever that is. I've got something that you don't do. And so we come together on this partnership arrangement because we can come in harmony and both create a win-win-win scenario. That is what the essence of partnership is and should be. Now, in the entrepreneur world, do things like hostile takeovers happen? You know, that happened with Steve Jobs. Like, Apple removed him from the CEO seat, everything he built, and then needed to pull him back in, right? Yeah, it happens in entrepreneur world too, where sometimes integrity, sometimes ethics, and sometimes greed play a role on that side too. However, based on my experience, the numbers show that mentorship and quality partnership is more aligned on the entrepreneur side. Okay, now what I want to get into today that really bothers me in my core is how these quote-unquote deals are done and the creator is getting slighted. I don't understand it, right? How is it that a record label signs a Michael Jackson, right, and makes more money than the artist. That doesn't make sense logically. There's no record label if there is no art to record, right? I understand you're as a label, and I'm just using this as an example, A label is going to bring in distribution and expertise, and they're going to bring in people to do radio and events and touring and help you get it all set up. I get that, right? And I'm only using this as an example. However, again, there's nothing to market if there's no art, right? The artist creates the industry for the labels and the distribution and everything else. That's the product that we're pushing. Right, so the typical types of splits that you will see— and when I say a split, it's like, what is the, what is the, uh, sharing dynamic, the sharing economics of our partnership? Some people say in marriage it should be 50/50, husband and wife, wife and husband, wife and wife, husband and husband, whatever that looks like as far as what you believe. And we're not getting into all that today, I'm just saying the partner scenarios, people say that should be 50/50. Okay, I don't necessarily agree with that. I'm more traditional, and I think in marriage it should be 51/49. That's me. I'm the man. We're just not 50/50. The strongest woman is never going to be as strong as the strongest man, and strongest— uh, the fastest woman is never going to be as fast as the fastest man. Scientifically speaking, we are not equal, man and woman, scientifically, okay? You can't argue with the science. So anyway, bring that over into the marriage, okay? Anyway, I'm not trying to get into that. I'm sorry, I got off on a tangent. Getting back to business, right? So you got 50/50 or 51/49, right? Which may come into play in business. Whoever has that 1% has more majority say what's going to happen, all right? But then you've got what you see as a 60/40. Then it usually will be a 70/30, an 80/20, and I'm sure there's some 90/10s out there, but that's not very common. All right, now the day is coming that Cauveé will be investing in creators, and the way that I look at this is it's always going to be weighted. The proportions should be fair to who is doing what. For example, If I come to a creator and I'm like, hey, you're at growth stage, meaning he's got 100,000 fans and we're going to help you get a million, but you've already got 100,000, you've already got something going, all right, I think a 60/40 or 70/30 split with the artist making the 70 makes sense because they've already built something and now I'm just, I'm just amplifying it a little bit, right? Now let's tweak that a little bit. Let's say somebody is just getting started today, and I'm giving you the systems and the distribution, and I'm building you up to the $100,000. Okay, now we might need to be 60/40, with 60 coming my way, because you're not even somewhat established yet, right? In the entrepreneur world, this could look like a company that's got a solid product Okay, and in order for them to sell their product, they need supply chain in order to get their product in stores or whatever it may be. And so a partner, which would be maybe a venture company or some advisors or their board or whatever the deal might be, gets your product in the store, but you technically couldn't really do what you're doing without your product in the store. That might make sense for the venture firm or whomever to get the 60 or the 40, or maybe the 70 and the 30, or the 80 and the 20, just depending on what it is and how much I have to build into you. So we need to have an honest conversation, a transparent conversation, as to what do you have when you come to meet, right? Now, even if the venture firm— and let's say put myself back in the venture firm seat I'm the venture firm and I have the 60/40. I like— it's weighted toward me. That shouldn't mean necessarily, because the reason why I have more is because either I'm doing more or I'm bringing more to the table. That makes sense, right? But it doesn't mean when we're looking at equity and we're looking at ownership— I'm still a firm believer and advocate that that person who's got the 40 can buy back, buy back their own equity from me because now they bought back the risk that I took, which is also very fair in exchange, right? I may or may not want people continually to be on my cap table, right, in the venture world, right? I don't know if you guys know this, out of 200 startups, all right, 5% of those startups are going to be successful. Okay, if we're looking at 100 startups, where it gets really interesting is 3 out of 100 will make the firm money, 7 will break even, and 90 will bust— means you lost money on all 90. That is the industry and the numbers. Okay, now for the 3 you did 100 times more, 1,000 times more, or 10,000 times more the investment that was put in, right? Which we call these unicorns, decacorns. They're very hard to do, right? Now here's my take on this, because Cauveé Inspiration Engineer is building a unicorn minimum and a decacorn expected. Expectedly, right? If you don't give me, venture capital company, Decacorn Resources, you don't get Decacorn payout because you're not giving me what Decacorn— you're not contributing enough to me being a Decacorn because you don't know how to bet on your horses and you're picking bad horses and you're betting on those, and that's the industry way. Okay, that's all you. Learn how to pick better stallions. Like, that's not my fault coming to you to raise money, right? You need to give me DecaCorn resources or whatever it is, DecaCorn Capital. Like, you need to, you need to put up, you need to take more risks, in my opinion. It's got to be fair. I shouldn't be penalized because you're a bad bettor, okay? Does that make sense? So all I'm getting at is The essence and the way that I understand partnerships to work, and the way it should work, it should be fair. And if I couldn't build it without you, like literally without you, you should have more weight or proportion— it should be proportionately weighted toward your benefit. If I can do it without you, right, then it should be weighted toward me or closer to a 50/50. Or a 60/40, right? If I'm already killing it and I'm already doing it without you, and now you're just going to take what I've already done successfully and amplify it a little bit more, I'm getting the 80 and you're getting the 20, or I'm getting the 70 and you're getting the 30. That to me is the way it should work, and it should come with the, the, the advice and the wisdom and the other things, because that is what a beautiful partnership is. I can teach you and share some things with you that you don't understand and you can share with me things that I don't know and that I don't understand, and we can both grow. One thing that I always tell my mentors, and it really bothers me at my heart, is when my mentors don't come to me with things they need help with, right? And it's like, well, Cauveé, they're your mentor, so why would they come to you for help? Simple. I have connections that you don't have. Even though you might have wisdom in certain areas that I don't have, I got resources and connects that you don't have. Which is again makes this beautiful dynamic between mentor and mentee or partners together. We both are building together. And I've had this conversation with a few of my mentors, even though that's a mentor dynamic and there's not a contractual nature there. My point is it still applies. We are working together as partners for the global good or the mutual good of all parties involved, but it gots to make sense. And so that just is something that bothers me at my core, right? And so all I'm getting at is I don't know what that's going to look like when we start doing venture deals with creators, right? Because nobody's doing it. We are really bringing a thesis into the market that is not common, okay? We see something that the market doesn't see, and being that this is what we're doing. We don't have as much data as some of these other industries and some of these other theses around, you know, SaaS or tech or deep tech or, you know, whatever it is that their thesis is. Now, will we make some mistakes? Absolutely. Will we knowingly take advantage of someone? No. Those are different. And I, I get very frustrated as well because I think our artists and our creators, we also need to take some responsibility as collective and say, we just want to be artists, we don't want to be business people, you can do the business. Well, if that is your mentality, you're going to keep getting taken advantage of. You're going to always be in the 10%, the 20%, the 30%, or less, while somebody else takes all your money, because you're not thinking like a business person. You've got to think like a person in business. You got to understand that just because you're an artist and you're a creator— everything in business is art and creation because we're all creating. So even though it may not look like the verbiage that we know as art, it's still art. It's just that for whatever reason, people have identified business as like a science. And then only if you make music or you dance or you, you know, you design or you actually paint or whatever, then you're an artist. No, that's incorrect. Those are just different types of art, and business is a different type of art. Right? It's actually a science and an art. And so all I am saying is, our community, we have to get past this 'I'm an artist and I'm a creator and I don't need to do business, I don't need to know about business, somebody else can manage all that for me.' You can do that and people will take advantage of you. I'm an artist, I'm a creator just like you, but I'm learning the game of business as well and then delegating accordingly. Does that make sense? So all I'm getting at is make sure that when we're doing partnership deals and we're doing venture deals and we're doing deals— and this is for entrepreneurs and creators— we are negotiating. So you got to understand your power at the table. Before you can even understand your power at the table, you need to understand the other side of the table. You gotta understand it. You gotta understand where and how their game works and how you play into the role of their game. It's like when you get a new job at a company, understanding like what is your role amongst— as they say, you're cog in the, in the ecosystem of this company. Well, how does it impact everything within the company? You need to understand how the deal that you're trying to do and they're trying to achieve and accomplish and how what you bring to them, to them, serves them. You need to understand it. And when I say need, I normally don't tell people what they need to do, but in this case, you need to do that. Okay? And ultimately, you're going to be better served by doing that. And the ecosystem as a whole, maybe we can get that to where instead of its 3% wins, maybe if, if creators and entrepreneurs understood it better, maybe we could get that to an 8% or 12% win. Or maybe 15% wins. See, people don't— they're not knowledgeable on what does it take to make this succeed. And so yet they're taking money and then they're losing all the money. But there's probably some educational reasons. More than likely they didn't understand enough about marketing and sales. More than likely. I mean, I would— I would— I don't know the data. That's going to get really interesting when we get there to really get into the data as to what is going on with these startups, as to why they are failing. But at the— at the— if you're always selling and you're always collecting checks, I don't understand how you go out of business. Like, just think about that for a second. If you're always making money, how do you go out of business, right? So I'm still early in this game of venture. I don't act like or want to put up the chest like I understand it. All I'm saying is what I understand. I understand numbers. I understand how sales works, marketing works, distribution works, syndication works. I understand that.. And I also understand how the music industry has been set up to exploit. And all I'm wanting to say to you, my friend, is you don't want to be exploited. You want to be utilized, and you want to utilize someone else. And we want to work together hand in hand. It needs to be a fair exchange as to who owns what and how much the percentages are split because of who's bringing to the table what. And if you're a pre-seed or you're a seed or you're a Series A, that could be a little bit different than someone who is in a more of a growth stage. And actually, if you're in Series A, you're in growth. But I'm just saying, like, growth and scale might look a little different for artists and creators that are at that level of, of growth in their brand, in their journey, whereas it might look totally different for pre-seed and seed. And that's okay as long as you've got proof and validation around why you're coming to the table in the negotiation with these— this makes sense to me as to why this is my valuation and why our partnership is going to work this way over here. And then you understand their side and you can speak to their side as well. This makes a good chess player. This makes a good person that understands both sides of the dynamic and the table and can make sure that we can set it up in a way that everybody wins. And at the end of the day, if you're going to get exploited, I would recommend you just walk away from the table. It's your boy Cauveé. I love you, I appreciate you. Thank you so much for participating in this message. Let me know what resonated, let me know what stood out, what stands out, what you loved, where you're tuning in from. And until the next time, we'll see you on the next show. All right, it's your boy.