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Many YouTubers successfully reinvest their earnings into their content, but depending on the content niche or their business goals, there is likely a demand for an even larger amount of capital. Before jumping into how to get it, creators need to step back and understand how they will use the funding and what it would mean for their business to help, then decide on where they will get the right funds.
Here are a few reasons a creator may look for outside funding:
1. Expanding Beyond YouTube Income
If a creator is making money primarily from YouTube but wants to build a business that isn't dependent primarily on ad revenue and brand deals, they may need to invest a large amount of capital today to get another new business going.
2. Launching a High-Cost Project
Whether it's producing a film, launching a product line, or building a startup, some projects require more or more immediate funding that’s beyond what your regular AdSense or sponsorships can provide.
3. Expanding Their YouTube Channel
If a creator wants to reinvest into their channel, whether that be to build or get a bigger studio, launch a huge giveaway / promotion or a high-budget production film for their channel, all of these ideas come at a cost. As the saying goes, you need to spend money to make money.
4. Diversify or Exit Their Personal Brand
Some creators want to build businesses that can exist independently of their personal brand; navigating how to transition can be a tricky and costly endeavor.
Understanding Different Funding Options
While fixed-fee funding solutions like Breeze, offer a more short-term and hands-off approach leaving the business decisions with the creator, venture capital funding can offer a more hands on approach. Partnering with the right venture investor can bring with it strategic mentorship, a diverse network and support from the investors. For creators interested in exploring venture funding, working with investors—like Slow Ventures— who understand the creator economy and have great connections is key.
When Should Creators Look to Venture Capital For Funding?
Venture capital has long been associated with tech startups, but in recent years, it's been making its way into the creator economy. For YouTubers looking to scale beyond their channel—whether by launching a major project, expanding into new industries, or building a business around their brand—VC funding might be an attractive option.
Here are some ways it can benefit creators:
1. Expanding Into New Industries
Whether you are looking to break into the video game space, start a consumer packaged goods brand, or launch a new tech startup these can be big undertakings. Big-name creators like Mr. Beast have used venture funding to execute and develop the presence of his brand in the CPG space with ‘Feastables’, and is in the works to launch other products in the coming years. This level of expansion requires significant capital, industry knowledge, and distribution networks, which venture firms can holistically provide.
2. Building Fully New Endeavors
Some creators are interested in launching new business such as apps, subscription platforms, or other tech-driven businesses. Venture funding offers not only capital but also access to industry leaders, and strategic guidance—something many creators might find extremely beneficial.
3. Brand Expansion
Many creators start by selling merchandise through platforms like Shopify or YouTube Shopping. However, for those looking to expand beyond a merch business and build a brand presence that is outside of their creator brand identity and that can compete with mainstream retailers, venture funding can help expand the brand identity to a new realm.
4. Strategic Partnership
Juggling so many businesses can be tricky, especially if you are breaking into a new space. Bringing on strategic partners can support your decision making, strategy and planning.
Venture Capital vs. Breeze: What’s the Difference?
Choosing the right funding model is all about aligning with the creator’s long-term vision and business goals. Here are a few more points of comparison to consider:
Venture Capital
- Best for creators looking for mentorship, guidance, and industry connections
- Funding is based on future potential and scalability.
- An equity investor where you share an upside and downside risks to the business, with an intended long term partnership.
Breeze
- Best for creators who already have a strong vision and want to retain full business ownership and creative freedoms
- Funding based on historical earnings and proven success
- Fixed-fee with a capped upside, intended to be repaid with an end term on the partnership.
Is it one funding option or the other?
No. While creators can choose one funding solution or the other based on their needs there is also the option to have them work together. Traditionally, it is very common to have a mix of types of financing, between Breeze with a fixed advance and companies like Slow Ventures you are able to tap into a wider array of financing options for your business. For example, companies like Apple although have a large equity backing and are publicly traded they also have debt as capital may be required for various reasons and existing shareholders are not looking to give up additional equity.
If you’re looking to discuss funding options to see what best suits your needs, we’d be happy to walk you through Breeze!
