Megan Lightcap on Slow Ventures' Creator Fund

Today on The Next Next, our guest is Megan Lightcap.

Megan is a partner at Slow Ventures, and Slow, of course, is a well-known early-stage technology venture capital firm. They've got their flagship seed fund, they've got an opportunity fund, and they recently launched their Creator Fund, which is a $60 million-plus fund. That's the first institutional seed fund specifically focused on backing creator entrepreneurs. Megan is the partner that runs that fund. I was excited for this one because Slow is an interesting firm To begin with, they've got a bunch of interesting personalities. They're deep thinkers. They start from first principles. They are not afraid to be weird or different or vocal with their opinions, which I always enjoy. And now they've got this creator fund and it's different and it's pretty well timed in that if you think about the rise of the MrBeasts of the world, increasingly creators are becoming brands in their own right. So it's not just Nike or Under Armour or, Procter Gamble. Now it's like MrBeast or the next MrBeast focused on all these different niche categories. I mean, it could be tractors, it could be plants, it could be sneakers, it could be all kinds of things. And once the creator has built a brand and has a cult following, there's a bunch of ventures they could go on to build. So what does Slowdew do? They back this entrepreneur at the holdco level, and then they get an equity investment and they get a rev share in future ventures that that these entrepreneurs go on to build. At any rate, great discussion in this episode all about Megan's path to work and venture, about Slow's path to coming into existence, and about the Creator Fund and how they first started experimenting in this area. Some of those early bets that they made, what gave them the conviction to establish a dedicated pool of capital, and also how their initial assumptions evolved from the time they started experimenting to today. It's a great one, and I hope you enjoy it. But before we get started, I'm Jason Jacobs, and this is The Next Next. It's not really a show, it's more of a learning journey to explore how founders can build ambitious companies while being present for family and not compromising flexibility and control, and also how emerging AI tools can assist with that. Each week we bring on guests who are at the tip of the here on redefining how ambitious companies get built. And selfishly, the goal is for this to help me better understand how to do that myself while bringing all of you along for the ride. Not sure where this is gonna go, but it's gonna be fun.

Okay, Megan Lightcap, welcome to the show.

Thanks, Jason. Excited to be here.

Excited to have you. This episode's a little different for me, one of the reasons I call the show The Next Next is that although the initial exploration is spending a bunch of time and looking at how AI is changing how startups are built and funded, I'm not some born-again AI guy. I'm just a founder who's in between companies, who's trying to figure out what's next. And before I figure out what's next for me, I'm just in a learning period, looking at where the world is going. And I'm also a poor man's creator of sorts. And, and so when I saw the announcement with the Creator Fund, I just thought it was super interesting and relevant to me and where the world is going. I'm grateful that you made the time to come on the show and talk about it.

Yeah, happy to get into it. And you're not a poor man's creator, you're a proper creator.

Not by the flow definition, but that's, no, but it's a, I don't know what I am too. That's actually part of my exploration. It's what am I?

Yeah.

'Cause it's, am I a builder? Am I an investor? Am I a creator? Am I like, am I something different I haven't even thought about yet? So. These, these transition points, they're uncomfortable for founders. I, I know from others watching them go through it and it's, gosh, like this person is, they're like heralded when they're on stage and in the press and, and then like in the shadows when they're in transition, like it's a freaking mess.

And like everyone, like I've heard that, I don't know, maybe that's just like imposter syndrome, right? But I feel like that's, no one has it figured out or like at least very few people do. And I don't know, I just think we're all trying to sort it out.

But I still remember all the fancy people like on Clubhouse during the pandemic, like pouring out their hearts and souls for these strangers. And, and then they just carried on their lives once the pandemic ended, like it never happened. But I still remember I was there. Me too. That's funny. Anyway, so we'll jump into it. Maybe just talk a bit about, talk about Slow and, and just overview on the firm and then we can get into the creator fund, why it came about, how it came about, when it came about, all that. Sure.

Yeah. For those who don't know, so Slow Ventures is a seed stage venture fund based out of, I guess technically San Francisco, New York, and Boston. It's been around for a decade, so it started by a handful of early Facebook employees, obviously strong DNA in kind of consumer social and doing— started out doing their personal investing. And then I think it was on the third fund that they raised outside capital. We're now on our fifth fund cycle and have kind of two different products within SLO. There's the core seed fund, think standard technology names like Slack and Airtable and things like that. And then we have an opportunity fund, which we introduced in our last fund cycles, really meant to do follow-ons in our seed companies and can be too like an oops, we missed it fund. So if there's an amazing company that maybe we missed it with Meteor or what have you. So that's like the overview of Slow. And I think if you ask the guys, so Sam, so the 3 GPs, so Sam Lessin, Will Quest, and then Kevin Colleran, if you ask them like, not only like I think what's most interesting intellectually, but where they've made candidly like the most money. They'll tell you what's on the weird stuff. It's not in like the Airtable names and like kind of the Consensys stuff. It's Sam was really early around this like alternative Ethereum thesis back in the day, which led him to seed Solana, which is like famously was like a massive return for the fund. And one of our thesis, we were pretty early to the like small business and kind of franchise area. And now we're chewing on this thesis of what would it look like to bring technology to analog companies, not by way of selling SaaS into that business, but like actually via acquisition. So there's just like a lot of like interesting ideas. And a couple years ago, the latest version of that idea was around creators. And the basic upshot was like, look, there's this new pattern of entrepreneurship emerging whereby people are building these like online communities around very specific verticals and niches, and with like crazy engagement and like fandom and almost cult them. So whether it's you're the go-to person for like archery or overlanding or high-end watches or like Japanese whiskey or menopause, like you name it, like you're, you've built this like really deep and engaged online community where people feel like they, they've joined a tribe, right? And by way of just like existing in that space and with the, with their audience, they inevitably see different spaces for business formation and. Eventually launch companies and products and services that are like right fit for those communities. And so we observe this almost inversion of, of business building where like instead of someone out of MIT with no distribution but just an idea, build something and then needs to go find customers. The creator way is I have an embedded customer base and let me go build products and services on top of that. And so the, I guess the team was observing this happening and all the while, like, traditional investors were looking at the creator economy and they were like, let's invest in infrastructure and tooling and the platform names and the technology behind it. Other people were investing in the specific projects. So think like the Chamberlain Coffee or the chocolate bar company of MrBeast. And we took a step back and said, like, actually, like, where is the value really accruing here? Like, it's actually to the creators themselves, right? It's to them and their communities. And so what would it look like if we actually invested behind them? And that led us to this idea of investing in their holding companies or their like parent cos or top cos, knowing that one, the brand equity really sits with the person in the community. And then two, there's gonna be a whole bunch of ways that value is delivered to these audiences, whether it's through an app or a product company or in a, a live event, right? And so we say, let's just invest behind all of it. So that led us to this like whole idea of creator investing, which we started to experiment with a couple years ago and then most recently formalized into a dedicated fund, which we announced, I guess a little, like maybe a month and a half ago now, which is a $64 million fund with some amazing LPs just dedicated to creator investing. And so That's where I sit. And so that's our third product, if you will, at Slo. Uh, we now have our seed fund, our opportunity fund, and our creator fund. So long-winded way of answering your question.

And I didn't clear this with you upfront cuz I, I didn't know I was gonna ask it. So if I can't ask it, just let me know. But when you say that the biggest alpha's been in the weird stuff, I feel like as a new manager, so I'm not talking about now in the fifth, fund cycle, but when Slow was just starting out, correct me if I'm wrong, but it was like proven founders but not necess— but new to investing professionally. Is that a fair statement or did the partners come from traditional professional investing backgrounds?

Sam and Kevin, it depends how far back you wanna go. 'Cause Dave Morin, who's now at— he's wonderful, he's at Offline Ventures. He was a part of the original cohort and some other folks, but for the existing GPs now, Sam and Kevin were both at Facebook and Kevin started his career at Facebook. Sam got to Facebook by way of an acquisition, but ended up running product management reporting to Mark. And then the third GP, Will, came from Industry Ventures, which famously like invented, I think, the secondaries product. So Will is the like traditional investor, if you will, on the team where Kevin and Sam come from a more of like operational background.

The reason I'm asking the question is that I'm curious about the LP makeup initially versus over time, and also in the core strategy versus the creator fund or other weird things that Sloane goes on to do. And I ask because with the benefit of hindsight, once a firm has proven they've earned the ability to do the weirdest stuff that they can, yeah, and the greatest alpha tends to be in the weird stuff.

I agree.

But the problem is that if the new manager No one wants to see weird from you. They wanna see by the book because it's safe. Totally. And so I just wanted to pull on that thread for a moment to the extent that I'm able.

Yeah, for sure. And I think honestly, this is probably its own podcast and you should, uh, you should have Kevin Colleran on and do just poke this bear because like, he's so good at articulating the story cuz he was really there in the early days where my understanding is when the guys were like, okay, let's go form a fund around this, right? And move from just our own networks, a lot of the initial LPs were some of the bigger funds. So General Catalyst and Andreessen and so on and so forth. And basically the idea was like, we'll just scour the earth for the really like small names and then the good ones will like tee up to you when they grow up and have some traction. And that was like the exchange. And then a bunch of the Facebook individuals or like high net worth individuals were also LPs.

And I think that's the equivalent of like how a creator can monetize all different ways. Like if an individual gets big enough, it can act like an institution.

Yeah, for sure. On the LP side.

Yeah.

There's actually some like really interesting lore around how Kevin got, I think, one of our biggest anchor LPs in. You honestly have to ask him because it's a great story.

I will. Again, he's another Boston guy. I've met Kevin a bunch of times.

Yeah, you got to get together. I like— I don't want to, but I'm going to totally butcher it if I try and retell it. And I don't want to— I don't want to do that. So you'll have to have Kevin on. But basically it was one of these things where, you know, you demonstrate early traction with kind of LPs who are closer to you and less institutional, if you will. And then over time you end up bringing in more of the endowments and the states and pension funds and some like more big boy LPs. And then I think we quickly earned the right to take more of these risks, right? And that is how when I guess Sam first thought about this thesis around creators, he went to our LPs and said, hey guys, I had this crazy idea. Give me like, let's, let's carve out X million dollars out of our opportunity fund just to go figure this out and experiment. And that's when I joined Slow, which was, I guess now over a little over 3 years ago, or maybe actually to the day 3 years ago where they were like, our LPs were like, just let's contain this, but go figure it out, right? Everything from how do you source, how do you underwrite, how do you structure the deals? Like what does post-investment support look like? Kind of soup to nuts. Go run this experiment. And so we did that for about 2, 2.5 years in slow, made I think like 6 or 7 investments with that in topcos of creators. Yeah. In topcos of creators. And look, I think took a couple reps to figure it out. And I think if you actually did an audit of every investment we made, there was a big learning in each, which was like pretty neat. And I actually still think that some of these investments are gonna be great, but that resulted in us being like, okay, this is for sure happening. Like, I think the world is going this way where the entrepreneurship just is gonna look different for this subset, and let's go try and fundraise. And so what was interesting is that I think it was end of, or like our AGM in 2023. So the end of 2023, we basically said to our LPs, here's like the year of performance. This is like what we learned on Creator. Oh, by the way, we're gonna go raise a fund. This is crazy and it may not be for you, but if you're interested, come talk to us. And we thought going into it, or at least I did, that it was like, this is too weird for institutions and it's gonna be, it's almost gonna look more like Slow One, which is like high net worth and media people and people who like, who get it versus a college endowment. 'Cause I'm like, this is too scary for them and too weird. Turns out there was way more institutional interest than we had anticipated. Some of those folks were slow LPs who were just, we wanna be broadly platform supportive and whatever you guys do, we wanna be there, which is amazing. Some people were like, this is really interesting from like an asset allocation perspective and just like diversification, right? Because this is so different. And then other people, which is like really pleasantly surprising, were like, yeah, I get it. Like my kids are watching YouTube and dragging me to Walmart to go buy all this crap and I get it. This is where the world is going. And I package these LPs in a couple of different buckets depending on their type of interest. And then super proud that we even have some anchor LPs in who are not in the Slow Funds and they were like, no offense guys, Kevin, Sam, and Will, but like, we have enough seed tech exposure and we just wanna be in creator, which I think is pretty validating. So it's a, it's an amazing group of LPs, folks like University of Michigan and MIT and Rutgers and TIFF and so on and so forth. So very fortunate to have them backing us and believing in us.

And we haven't talked at all about you, Megan, but what was your journey to decide to become an investor in the first place? And then Was, was being an investor contingent on following the creator path, or at what point did the owning the creator fund get interjected in your investment story and slow story?

Yeah. Yeah. So I got to the world of creators by way of consumer. So my, my background is really in kind of consumer investing and consumer operating with a, with the exception of a very brief stint where I started my career in financial institutions, investment banking, like you couldn't get more different from what I'm doing now. I was covering like Blackstone and Carlyle and Alternatives or like non-bank lenders, like crazy names. And it was actually through that experience I was like, uh-uh, like my heart is in kind of consumer and this is just like, this fake thing is not for me. So found myself at a consumer private equity firm called Elkatterton up in Greenwich, Connecticut, and I sat on their growth team and so did, you know, everything from restaurants and retail to apparel and accessories, CPG, some consumer tech, consumer services. So like broad-based consumer and just fell in love with it. And I think the thing that I was most interested in is really like consumer psychographic shifts and changing preferences and tastes and how that stuff percolates into purchase decisions. And it was that, less about the actual business model, that, that intrigued me. And then after Caterton, left to get some operating experience in lieu of business school, which was quite edgy at the time where everyone in my class kind of went off to business school, but I went to go join a startup inside of Walmart, obviously one of the biggest retailers in the world. And like, what better a place to, to learn kind of consumer behavior and what it means to be in the belly of the beast. And so worked on a startup there within kind of Walmart for about 2 years, and then a team left to go do another startup. So it was like a 4-year journey of just like crazy operating, consumer operating experience, did a lot of more strategy, finance, kind of generalist stuff. Realized I did not want to be an operator and I really actually missed investing. It's one of these things where you get into a company and, and I'm sure you know this too, but like the minutia, right? You go so deep into one thing and you, you step away a little bit from seeing different business models and companies and founders and whatnot. You just go super, super deep and I missed the diversity of categories and people and ideas that I was encountering at, in, in an investing role. And so missed that. And really, I met Slo through like a friend of a friend. I think I met Sam or someone on the team through a friend of a friend and had no idea what they were doing with Creator. And Sam told me more about it. And my first gut reaction was, I don't know that this is for me because I don't know anything about Hollywood or like talent. Like it's just, I, like, I'm good at like consumer. I don't know this other stuff. And he was like, if you actually think about it, the things that we want to invest in are not talent and entertainment. It's actually the people who are gonna create the next generation of amazing brands and companies. They just so happen to be going about it a different way. And did a little bit of my own like personal audit on just, if I think about the last 10 things I've purchased, what was the genesis of why I purchased them? And I kid you not, every single one was either a friend recommended it, an influencer or creator who I follow and trust and love recommended it, or like just some form of word of mouth. It had nothing to do with, oh, I trust Tide, so I'm gonna buy Tide, right? Like it was— gone were the days of kind of the way my mom had shopped of you have a brand, you make a decision based off the brand. It was all influenced by people. And so it was this kind of aha moment of, man, I just think this is where a lot of like consumer is going. And that's not to say that brands generally will cease to exist. I think they still play a very important role, but there's just this overwhelming sense of consumer purchase behavior is changing in a big way. And I wanna be at the forefront of that. And you know, what Sloane was pitching was like pretty innovative and felt like a startup within a fund. And so scratched the both entrepreneurial itch and also the investing itch. And the team is great and you obviously know them and off to the races. So that's how I got here.

And can you talk and don't feel free to anonymize or leave out details. Don't— I don't want you to throw anyone or anything under the bus, but just some of that early experimentation and what were the assumptions going in? How have you course corrected since? What have you learned? And also when did the switch flip on that learning curve from experimentation to time to graduate into really, it sounds like the, other than the Opportunity Fund, the, this is the first big move from slow for a dedicated pool of capital for something beyond traditional tech.

Yeah. Yeah.

Yeah.

So the way it started actually was like Sam, he's also probably a good person to have on your podcast at some point, but He has long been upset.

You're all so different.

We're, we're, it's funny. We're a mob.

Oh, weird, weird with lots of alpha. Yeah. You're like the human equivalent of the companies you back. Yeah.

Everyone on the team has, is like a bit, I think I'm like the least big personality on the team. Everyone has like a very big personality, but, and everyone's very different. But Sam has long been thinking about this idea of debt is like a bad product to, to finance people with, especially in a world where outcomes are becoming like crazier. And debt is amazing if you have a very stable job, predictable income. Think like a nurse or a doctor or a lawyer, right? But if you're a serial entrepreneur or creator, it's like, how do you actually underwrite someone? You can't. And when you have this, that like high volatility, equity is actually a much better fit product. And so I think he like maybe bought LifeCapital.com or something, or maybe wrote his thesis on it back in the day. Again, there's like some lore behind the story, but So he's intellectually been thinking about what if you could finance people with equity instead of debt and what would that look like? And then there's been versions of it with like ISAs and this and that. And so that was like the original premise. And then, then came the world of creators where you could actually invest behind as creators were starting to look more like brands. There was this need for capital to invest behind quote unquote like a personal brand. And our very early experimentations were, he had this original thesis that was like, there's gonna be two versions of this. One is you invest in a creator with an audience, right? And you give them super flexible capital to grow their company, launch content, hire a team, start experiment with companies and products and whatever. The other version of it was gonna be almost financing like a serial entrepreneur. Which is to say, let me invest, let me just give them like a blank check and whatever comes out of their sandbox, we will have an equity stake in it, like a true incubator type model. So we did 2 deals. In the first form, it was this creator, Marina Mogilko. She's actually a fabulous entrepreneur and like a fabulous creator. We've since become very close friends and she's just, she continues to blow me away and really strong community. Like she has ride or die people, but like very traditional creator. The second instance were these, they're actually siblings, the Lieberman siblings, and they, I think, are like ex-Snapchat product folks and basically are like, look, we have a diverse set of interests and we're just gonna do like rapid experimentation and company creation, and we want you to invest in like the Lieberman Co. And, but they don't have necessarily like distribution or an audience. And so those are kind of like the two formats that we were experimenting with. And very quickly realized that like the former was just a way more commercial product where you can measure and you can diligence the community. There's a category associated with it, so you know the bounds of what the set of businesses might be versus, say, the Liebermans, where it's very hard to underwrite. Like, it's a, it's this, how do you even put a price on a technologist, right, who may come up with the next SpaceX or may come up with a sell-side company. It's there, there was no bounds to it. So I think with this, in the spirit of let's figure out how to actually commercialize this product, the former is a lot easier in a whole, for a whole bunch of reasons. And so let's go pursue that. And then from there, we basically, it was more like refinement on the edges of, okay, what really matters is high-value verticals and niches versus entertainers, or how to get how to diligence the community and what actually matters in the investment structure. Introduce the idea of what we call like a roffer. If they launch a company that ends up needing more money, we obviously want First Look to put more capital into that. So we just— from there on, it was more of a refinement of that model versus let's try different types of founders. So that was most of the time kind of preceding the actual fundraise.

So a few questions there. One is just I would imagine there's a balance because you want them to be proven out, meaning they have the following and ride or dies and all that. But at a certain point they might cross a threshold where they don't need you and don't want the dilution. And so teasing out that balance and how you think about that would be useful. And then similarly, you talked about how on the founder without the distribution side, it's like they could, build a seltzer company or build, or build all different kinds of companies. Same thing on the creator side. It's just that they have the distribution built in. And so are there certain companies that they're predisposed to want to go in ways they want to go and monetize that you're predisposed to like, or is it truly just however they want to, they'll figure it out later as long as they have the distribution in place?

Yeah. So let me take the, uh, second question first and then we can talk about like the sweet spot of like size or whatever. So the issue with the, like, serial founder is take a really good engineer from Snapchat and you're like, I have no idea. And maybe he did some time at Snapchat, maybe he did some time at Rippling, maybe he did some time at whatever. He has diverse experience and you're like, I don't actually know how to underwrite this. Like, how do you come up with, with the bounds of what, what may emerge? Whereas I think in, for the category and niche specific creator, there's a container, right? Which is, there's a container around the broad categories. There's a container around the community, kind of lead you into, there's probably a container around the types of businesses. And yes, there may be some changes on the margin or whatever, but just to give you a very specific example, we're chatting with a creator. Who is in the construction space, and you can— he's already down the path on solving a problem within the construction space based upon his content, like the— what he talks about, who his followers are. And like, yes, there may be different business models that emerge, but like the contours of what you're underwriting are clear. Or another example is we're chatting with a creator in the, like, career development space. And is she going to go launch the next SpaceX? Probably not. And so there's just, there's a little bit more to wrap your arms around from everything from a valuation perspective, from a diligence perspective, from an underwriting perspective. There's just, it's just a little sharper. So that's how we think about it. And honestly, what's really important here is the community. Because you can say, how big is it? How much are they will— what's the willingness to spend? Where else are they shopping? Why are they attaching to this person and for what reasons and what categories? So there's just a little bit more to chew on is really kind of what it comes down to. And then to answer your first question in terms of the stage or size, you're exactly right in which they have to be far along enough that you can sit there and be like, okay, they're really onto something, right? They have content market fit. They, there's a community and there's traction. but they can't be so far along where $1 million, $2 million, $3 million is not gonna make a difference. And so there's this like kind of window in of time in which the creator is like really a fit for us within some margin. Obviously what we are coalescing around is usually they're doing a million bucks, could be north or south of there in top line revenue, either from, could be a mix or either one of advertising, platform revenue, brand deal sponsorships. Maybe they're already selling product. So it just, that matters, I think, a little bit more to us than say follower count or subscriber count or whatever. So that's how I think about it.

How, how do you think about, you can clearly assess a founder by just how strong is their following and how big is their audience and the market and all that. But when it comes to, I would imagine there's a big chasm to cross from being just a personality to being a founder and building anything beyond talking about the category all, all day long. And how do you assess that and how do you think about team? Do these tend to be solo founders? Do they tend to have a founding team that complements their weaknesses? And how do you know if a creator will be a good founder?

Yeah. So in certain instances, like they already have a company or maybe two. So that gives you a lot of signal, number one. But in, in the instance where they don't have that, I think a lot of it is like, this is what we do in our seed practice where so often we'll meet a first-time founder that literally has an idea and like a pitch deck, and maybe they worked in private equity or maybe they worked at a tech company or whatever. And it's a very similar, I think, like founder diligence process of do they have it right? And I think, do you know Ariel Zuckerberg?

I know her by reputation. I've not met her.

Okay. She's great. I recently saw her speak at this conference and someone asked what she looks for in founders, and I'm co-opting, fully co-opting and stealing her line, but she was like, very bluntly, she was like, we look for rizz and tizz. And first, also just like hilarious because the crowd that she said that in was like a very like proper crowd. And everyone's like, she's just, she's great. But what she means by that is they have to have a certain level of charisma to bring their stakeholders along, whether that's community, whether that's investors, whether that's customers, whether that's investor, like whatever it is, they have to have a level of vision, get, marshal the troops and charisma and to sell the dream that doesn't yet exist. And then the tiz part of it is for, they have to be autistic about the thing that they're focused on. They have to be so irrationally obsessed with either the idea or the space or what, like the opportunity that like, it's a little bit delusional in a sense. And but it's a positive delusion of being an entrepreneur is not, the odds are not in your favor. Right. So you, and you know that going in yet you still have to pursue it. And so I think a very similar evaluation process happens in the creator world, which is they have to have the charisma. And I think that's like highly diligenceable and potentially you almost have to diligence where they may be too charismatic and to like the flip side. And then truly just like they have to be obsessed with the thing. And like the other thing I'd say too is building a, a million-plus person community with multiple touchpoints and multiple revenue streams and sometimes to the tune of upwards of $5 million in revenue. It's not easy. And I think that some people overlook that and it's a very entrepreneurial endeavor to even get to that point. Yeah. And then I think in terms of team, oftentimes they have a handful of people around them. Sometimes it's like an operations manager or sometimes it's like a right hand, sometimes like their high school friend or their husband or wife or whatever. Some, someone around them that's just jumped on board, been like, this is a career, this is a thing. I'm gonna help you full-time.

Like Eric from Entourage.

Exactly. Exactly.

There might be a turtle around as well.

Yeah, exactly. Exactly. But what's interesting though is like sometimes we see, or we'll meet a creator in great niche. Unbelievable content, really highly engaged community, but they send their lawyer and manager to every meeting and like they're not in the meeting and we're like, uh-uh, like we can't do this. We cannot go past go here because it just signals to us that like they're not, they have to be the one driving it. And so there's little things like that we can screen for or whatever. Another thing is, and stop me, I feel like I'm chatting a lot, but another thing we'll kind of screen for is we get asked all the time of what services do you provide or what comes with the capital? And we're like very flippantly like nothing. Like we're the way to think about us is just money. And obviously we're like a little bit more than that, but it serves as this really good filtering process for people who are like, great, I know exactly what I'm gonna do with the capital. Yeah, I'll text and call you in if I get stuck or whatever, but I don't really need a hand to hold. I just need to move faster. So there's like little things like that we can like screen for or filter for, for the like true founder.

And you talked about how this is equity. At some point I might've read that it was more of a, like a Mr. Wonderful royalty style arrangement.

I, there, there's been like, this is also part of the, some of the headlines from back in the day when we first did the first deal. Some of the structure as it relates to the investment has also changed. And so, The latest iteration, the way to think about it is this is really an equity stake in the holding company because what matters to us is having equity in the companies that the creator may launch. Now, the profit share is important in the instance where, and by the way, it's a profit share, not a revenue share, which I think just to be super clear, right? It's after expenses and even further, right? It's assuming the creator has earned above a certain amount. That's when we start to partake in our share. Highly favorable to the creator on that front, but we have that provision in for two reasons. Let's say a creator does a $10 million deal, sponsorship deal with Nike or Gatorade or whatever. We don't wanna be cut outta the economics of that, right? So if it's just an equity thing, technically we wouldn't participate. And so we're like, feels fair that we would have some upside in that. So that's number one. And then number two, in the instance that a creator is, look, I thought I wanted to do the venture thing, but this is really just like a lifestyle business. And I'm just gonna like cash flow it and do brand deals and make it more of a media company, or equity gets stuck. And so in that instance, we wanna be able to basically participate in the dividends and distributions like any, like we're being alongside the creator in that instance.

And that, this is more of a technicality, but like where does the line stop in terms of, is it like anything that the creator goes on to do in perpetuity in this category?

Or like how does that line in the sand Yeah, the way to think about it is we want these to be sufficiently long-term partnerships, but we're flexible on what that means, knowing that like in reality the bulk of the enterprise value creation is probably going to happen in the first like 5-ish years, right? But we want to make sure that— I'll give you an example. MrBeast's first entrepreneurial endeavor was Beast Burger. Famously didn't work out, right? And then it was— and he put all of his focus on Feastables. That's like his next bite at the apple that actually has worked out really well. And by the way, he's doing more in ViewStats and he has a bunch of other companies that are coming to market. And it's that type of thing where we wouldn't just have wanted to have been in Beast Burger. We wanted to make sure that we were also in Feastables and ViewStats and some of the other companies. So what we say is like, we want it to be long-term, but we're not crazy. It's not into perpetuity, it's not for forever, but like we would, we wanna make sure that we don't get cut out of the value. And then with respect to the bounds, it's basically like anything that you're like launching to your community should probably fall into the holding company. If it's outside of that, you're like going to take a job at Meta or whatever, it's fine. Like we don't, it's not like gonna change the, move the needle for us and we don't care. So as long as you're launching something that is serving your community, related to your content, related to, to, to your creator career. We think it should be in. And we can obviously talk about certain instances and carve-outs and this and that, but that's the spirit of the deal.

Uh-huh. Do you think this has applications in areas beyond creators? One area that comes to mind for me is athletes.

Yeah.

Yeah.

We actually got this question from MIT in one of our, like, very first pitches, and they sent us— they were like, what is it? Who is this fund serving in 10 years? You could imagine a world in which it's— there's an athlete silo or a musician silo or an artist silo. And by the way, I think like very applicable in other geos too. I don't just think this ultimately stays as a US product. But yeah, I mean, I think it's all just about the more examples that come online for the types of people doing this, like, I just think you're going to see more of it. So Michael Jordan, right, is like the most famous athlete that's— that has extended his IP right beyond kind of him as a basketball player, but there's gonna be more. And I think like people will take cues and inspiration from other types of public figures. And yes, I think it's very applicable to other realms really. But I, I think first and foremost we're like, let's just get, let's just get the creator thing right and the fund off the ground and do what we said we were gonna do. And then we can broaden the aperture.

Huh? And I get that it's a filtering process with the not— the under-promise and over-deliver on the help. I also would have to imagine that the creators would be hungry to— you're gonna, as your portfolio of creators grows, they're gonna wanna learn from each other and network with each other and like business model learnings and distribution learnings.

Yeah.

Team learnings and whatever.

I'm—

are, are you— maybe it's just too early, but I—

no, it's, it's so funny. I literally had this conversation yesterday with someone and I can't remember who I was talking to about it, but yes is the short answer. Look, I think at end of this year, we'll probably have some sort of summit or like something where we basically bring all of these venture-backed creators together. And even if they're in different industries or different niches, like for sure there are shared learnings and kind of knowledge share between them and among them. So the short answer is yes, like 100%.

Yeah, cuz I mean, I don't have a fund and I have a weirder following because it's— we've talked a little bit about this offline, but it— and I also just I don't have much of a following now. I'm just starting out. But what I'm finding is when I bring on people on the show, there's a lot of commonalities in terms of they're drinking from a fire hose trying to figure out how AI, for example, is gonna change how startups are built and funded as they're actively building startups. And there's so much, it's like they have two jobs. One is like building the startup and the other is keeping track of the rate of change.

Right.

And they're dying to learn from each other, but it's also, they don't want another Slack room.

Yeah.

They don't want another stuffy event that they need to get on a plane for and be away from their families or whatever, or from their companies. And so it's like, how do you, how do you convene in an age where everyone is buried and I don't, uh, yeah, maybe you guys have figured out. I certainly haven't.

No, I think we definitely haven't figured out the format. And I think that—

have you on the core, do much on the seed side?

We have events that we'll just invite our portfolio founders to and LPs and friends of the firm. And it's a, it's very informal. That's like our vibe a little bit. So not really nothing like super formal.

Yeah. And, and sometimes that just like, hands-off, but like super well-connected and thoughtful and will always answer the phone when you call kind of thing, like is value in itself. And if that value prop is working, maybe that's enough and maybe trying to over-engineer it isn't, yeah, isn't needed and could be detrimental.

Who knows?

Yeah. I think that's like kind of our view generally is that's the reason why we don't believe in boards at the seed. It's just go do the thing. What good is it wasting time preparing a board deck and blah, blah, blah. Just go execute, just go figure it out. And we don't take board seats, we're non-directive, and this is true across everything. Creators and regulatory founders, we like to say we're on text and call and very much take the lead of the founder of how much do you want us to engage and help? And we'll sit down with you every week if you want, or talk to us every twice a year. Like we, we definitely take their lead.

And if you look across the seed to now this creator effort, what aspects are the same in terms of your approach as it relates to things like deal flow or portfolio support or like any of the kind of key elements to the offering, what is the same and then what is distinctly different about the Creator Fund?

Yeah. So I honestly think the diligence is converging to be very similar where at the end of the day you're evaluating the team, the person, the broad like category or theme, and that's it. Right? Like, now what's different about creator is you obviously have the community to diligence where you can call up their superfans and be like, hey, like, why do you like this person? Like, why are you spending all your time watching their shit and like buying their stuff? There must be something here. And then in certain instances, there's actually a lot— there's more data in the creator world to actually diligence everything from view counts to engagement to sales. There's just more. But like, Fundamentally, it's a very similar, like, founder and profile evaluation. I think what's very different is sourcing, where I'm very jealous of my seed colleagues where it just comes to them, like everything just comes to them. And I think that's— they obviously have the benefit of a decade doing this, but— and the ecosystem is just like pretty mature and like pretty efficient. Whereas that's definitely not the same for creator where we try and We think about inbound and outbound differently, which is we have to generate inbound where we go on podcasts or we put out writing or we speak on panels and put the message in the right high signal channels of this is what we do, this is who we look for. And if there's someone in your world that is relevant or interested or wants to talk, come find us basically. And so we try and do some, what's the word, net fishing where you kind of put out a thing and a lot of people come back and And then we also do some hunting, I guess is like the right analogy of we are doing a sprint on X category and we're gonna go canvas that, that niche and figure out who's doing some interesting stuff and just have a conversation with people and do more outbound. And so the sourcing and kind of sales motion is just a little different than it is for traditional seed.

Given that you're kind of, you're not hunting the MrBeasts, you're trying to hunt the future MrBeasts. What are some tells that make you think that there could be something there? So when you, like, when you have your antenna up and you're out scouting in the market in, in whatever category you're looking in, or maybe it's across categories, like, what are the things that get your spidey sense going that makes you think you should track this person down?

There's a lot. Like, one thing that comes to mind, which is like pretty, I mean, the non-obvious thing, because I think a lot of people are like, there's engagement rate and there's cultum and fandom and this and that. There's a lot of stuff that's like surface level, you can kind of just intuit. But one of the things I have actually found to be true across the best creators we've seen is that they start not as a creator. Like, they, they end up as a creator because it's in service of something else. Where like they're trying to drive people to their app or sell X, Y, and Z, or like they end up on social for some other reason beyond celebrity or vanity or attention. Then they're like, fuck, like this is just like an amazing distribution channel. Let me just do this. And I think what's where it becomes mucky for us is when people do it for the vanity. And the attention and then end up in a place of, oh, maybe I should launch a business, or, oh, I should do this or that, or this is like what I should be doing versus people who are like, forget the media, it's just a means to an end. It's not an end. I think that tends to be like a very strong signal of who is probably the right, in the right headspace for what we're looking for.

Yeah, that's interesting. So it's almost like sorting things through in a category and and start publishing just to attract others who are also sorting it through. And then almost like Forrest Gump, they just accidentally build a tribe just by talking about the things they care about. But it's really the things they care about that's driving them to get up every day and do the work. Yes.

Yes. And a lot of them like end up falling in love with content and that as a format and happen to be very good at it. But it's not, it wasn't the primary factor as to like why they started.

And I may have read that you have maybe biased towards YouTube. I guess my question is, are there parallels that you find over time in terms of the channels and also in terms of the styles and natures of the, I don't know if you call it a host, but of the creator, or is it different recipes for different people? And the key is just like finding your own zany recipe that works for you. And there's almost no consistency, like the saying, if you've won, if you've met one family office, you've met one family office. Is it the same true with creators or are there consistencies across the best creators?

I just, I truly think it comes down to what works for your audience in your category. And so just to give you an example, it's easy to say we only look at YouTube, but that's actually not true. It's more actually that like oftentimes all roads lead to YouTube where someone may get their start on Twitter and then end up driving towards YouTube for one reason or another. But take parenting, even like a more specific subset, take like sleep training, right? If you're a new mom, you're going through this like incredibly stressful time where you're trying to get your kids to sleep. Like you are not watching a 15-minute long YouTube video. You're just not. You're scrolling on Instagram at 3 in the morning. When your baby's crying, try and trying to desperately get this thing, this baby back to sleep, right? And so a lot of parenting creators actually exist on Instagram or TikTok even. And I think it's, it's way more about in terms of the platform and the type of content, it's way more about the audience and meeting them where they are versus, oh, you have to do the like thumbnail optimization à la MrBeast to get max views. If Dr. Becky did that, she'd be like, people would be like, what, what are you doing? I didn't think it would flop. I think it's just, it really, I think the best creators just deeply intuit or know what is going to resonate with their audiences the best.

Is there any sort of farm system the way that YC and a bunch of others over time, obviously, but how YC became the gold standard of the farm system for young future founders? Is there any type of farm system for future creators?

I'd love there to be. It would make my job a lot easier. There's not really. And like, I, there are people, lots of people have talked about and some people have tried like the YC for creators thing. I think it's just hard. I don't think we're there yet and maybe one day there will be, but I also think that if you're just in the game of like algorithm optimization content optimization, you can go through like a cohort or a school or this or that, or take a course and whatever. But if you actually think about the people that we're looking for, it's— I'll give you some of my, like, an alpha, like some sourcing alpha right here, which is like some of the best people that I found have come through scouring the guest lists of certain podcasters because they happen to be unbelievable identifiers of like weird niche talent. So like Joe Rogan has this guy on who's like the king of mushrooms and he, this guy like Paul Stamets or something. And he has an, he has a huge e-commerce business in just selling like mushroom-oriented products. There's no way he would ever be in a forum system for YC for like, he's just in wherever he is like doing his thing and just has very organically built this like deeply engaged community around a very specific topic. And so I almost, yes, I would like a farm system, but it's almost like that's where the opportunity lies, is like they're not being some sort of formatted, let me just offer up the most like efficient way to, to meet everyone en masse.

I did, part of this just feels like what Gary Vaynerchuk was talking about 10 or 15 years ago, but all grown up.

What was he talking about? What do you mean?

He was talking about like, just if there's something you care about, just go do it. Start talking about it publicly. Totally. Yeah. And just, See what happens. And it's, it can be the tiniest thing. It doesn't matter if you care about it, just start talking about it.

For sure.

And just start, start somewhere. And so what is the grown version of that? The grown-up version of that, it's you have a big following and then from that following you, and you're well connected and you know a lot and you have a lot of inside baseball knowledge and stuff, and then you're gonna leverage it to go build this business and that business on top of the platform that you've built. It's like the, the grown-up version of the seeds that he was advocating for being planted 10, 10, 15 years ago.

Yeah. A hundred percent. And I actually think, yeah. If everyone asks themselves, if I forced you to be a creator today using that playbook, what would you go talk about? And like, on what platform? Like, I think everyone actually has an answer to that. I have my answer. And it's just like the things that you like, what are you searching on Reddit? Like, what are you reading on Saturday morning? What do you wanna talk about at the Thanksgiving dinner table that like no one else gives a crap about? There's just certain heuristics for this stuff. And yeah, I think you're right. I think like it's the grownup version of exactly that.

Yeah, people— I don't think of my— I have a podcast. I don't think of myself as a podcaster. I think of myself as someone who likes to learn and has found that by doing so with some public vessel, it provides accountability and creates an inbound flow of like-minded people over time. And it's less about quantity than it is about quality, and also just great relationships and insight from all the guests, where it's almost like the discussion is more important than the content. And the content is just the exhaust from the discussion and it's just gravy, right?

Oh yeah.

And so when people reach out, sometimes people reach out and they're like, you're a successful podcaster or whatever. Like what, when you were starting out, like how did you know what people wanted to hear about? It's, I didn't care about what people wanna hear about. I just knew what I wanted to learn about and just, and so I think people should liberate themselves from over-optimizing for the audience and just put their authentic self out there and see what happens.

I, yes. Yeah. This is a short answer.

Yeah, cool. This has been great. Megan, is there anything I didn't ask that you wish I did, or any parting words? And before I ask that, also just for anyone listening, like, who, who do you wanna hear from and what's the best way for them to find you?

Creators doing cool stuff and who are entrepreneurial in their little operating in their niche. And we're always happy to brainstorm and have ideas. You don't necessarily have to be interested in capital or thinking about fundraising. We're always down to just meet whoever. And I can, my email is Megan, M-E-G-A-N MeganLightcap@gmail.com. I can't remember my Twitter handle. I think it's @MLightcap or @Lightcap. I'm not sure.

Yeah? That says a lot about the state of Twitter if you don't even remember your username.

Or X. No, I feel like I yapped the whole time. So thank you for—

no, it was great! No, I learned a lot which is exactly the point. I want to learn more about what's happening in the creator world. I'm again, like a creator, still trying to figure out what I am but also is there anything that I didn't ask that you wish I did or any parting words beyond what we already discussed?

I don't think so. I don't think so. The only parting words would be like, the one thing I wanna always emphasize is not every creator has to be an entrepreneur. Like sometimes it's just okay to be a creator and there's so magic in that and that's wonderful. And I think oftentimes people get swept up into, I must launch a business, I must do that. It's not always, I think.

Okay.

Yeah.

And same thing on the founder side. Like just because you can raise venture capital doesn't mean you should.

100%.

Yeah. All right. Great point to end on.

Thank you.

Best of luck with it and I will be eagerly following your progress.

All right, thanks, Jason. Take care.

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