Why Invest in the Creator Economy?
Previously, content creation as a career has grown immensely and created many opportunities for entrepreneurs and art-based business structures. At present, it is estimated that there are approximately 50 million creators across the globe creating content for a living using YouTube, Instagram, and TikTok, among other platforms.
Many digital platforms such as YouTube, TikTok, and Facebook have introduced creator funds. Together, the creators and the people employed by the service make up what we call the creator economy.
Even the businesses creating platform tools to empower different types of creators, from podcasts to content writers, have grown tremendously to support and generate revenue from the creator growth. With the help of creators, these start-ups financed themselves to enhance their business models.
Dev Khare, Partner, Lightspeed Venture Partners, and Miten Sampat, Angel Investor, Engineer, discuss how creators and creator-led platforms and businesses are shaping today’s world. They also shed light on the significant changes in the last few years and how startups will dominate the next stage of this evolution–ones centered around empowering creators to seamlessly monetize while staying focused on what they already love — creating content.
The Impact of Investing in the Creator Economy
Miten Sampat, an active angel investor for start-ups across India, the US, and Southeast Asia, explained that creator-focused start-ups received approximately $2 billion worth of funding investments.
The rise of the creator economy feels like a new renaissance. Digital content is more valuable than ever, and it has become a viable way of life. A variety of sources of revenue, content media, and an endless desire for digital consumption on the Internet ensures that creators of all kinds are beginning to find viewers, not just mega-influencers with high numbers of followers.
Venture capitalists have shown more interest in the creator economy in recent years. Dev Khare, a partner at Lightspeed Venture, explained that venture capitalists began to invest more in creator-focused economies. Every other start-up, small or big, started using influencer marketing and creator-based marketing to promote their ventures.
Why Invest in the Creator Economy?
In the discussion, the speakers discussed in detail why venture capitalists should invest in a creator economy for growth and concluded with the following reasons:
As digital platforms grew with the creator community, the global outreach grew parallelly. Creators provide content that caters to not just one dissection of the society, but it reaches globally and creates an impact. While investing in the desired economy, VCs benefit from globalization for the venture they are investing in.
Investing in the creator economy brings in increased scalable output. Take the example of Cameo, the most famous video editing platform which venture capitalists backed. They generated their revenue within substantial limits and helped creators build, edit, and make videos. They also used influencer marketing and scaled their business towards the pinnacle of success.
Different forms of creativity
Digital creators are exploring and creating different forms of creative content each day. Be it any business that caters to helping creators or the creators themselves. Each entity is discovering new ways to generate content that can create more profit.
Creativity is a form that can be explored in deeper prospects each day using different formats. Investing in a creator-based economy elevates larger audiences and creates higher traffic.
Creators are the new mentors
As discussed during the elevate summit, creators have become highly equipped to sustain their needs and provide content worth creating a buzz.
The creator-based start-ups that channelize and help creators have made it easier to generate better content. Every other creator-based start-up or company has been on the line of success since the creator economy.
There are endless opportunities to be discovered when investing in a creator-based economy. Each start-up at any stage takes exceptional service to provide better services to the community.
Each field in the creator economy, from podcasts to ed-tech digital start-ups, has endless themes that provide opportunities for increased amounts of profit. Content creation is a world filled with endless possibilities.
Creators have the energy and resources to make money from audiences directly marked as a changing dynamic in current times. For years, the economy was surrounded by earning money with ad revenue sharing and brand sponsorships. The sponsorship market touched $8 billion in 2019, and it is estimated to hit $15 billion by the end of this year.
Investing in the creators’ economy has gained popularity with the global growth of creator communities. It is more than safe to claim that content creation is the future, and it’s here to stay.
Note: This blog is an excerpt from a session on The VCs are Watching: Investing in the Creator Economy with Dev Khare, Partner, Lightspeed Venture Partners, and Miten Sampat, Angel Investor, Engineer. The session was part of Elevate–a global virtual content summit organized by Pepper Content, bringing together industry leaders in content marketing.