Why Sam Lessin is using the VC model to invest in individuals + Jason funds a startup on air | E1328

Investing Model

Sam Lessin, a general partner at Slow Ventures, is pioneering a new investment model by directly investing in individuals, particularly creators. This approach involves providing capital in exchange for a percentage of future earnings, as demonstrated by his $1.7 million investment in YouTube creator Marina McGilcho for 5% of her earnings over 30 years 1. Lessin believes this model supports creators in building diverse ventures, similar to how David Bowie once used "Bowie Bonds" to finance his music 2. He argues that this strategy allows creators to grow faster and align their interests with investors, fostering long-term partnerships 3.

It's about if you're investing with someone over a 30 year time horizon, you're really investing in their growth.

--- Sam Lessin

This innovative approach is seen as a new category of investing, focusing on the potential of creators to develop multiple businesses over time.

   

Equity Financing

Equity-based financing is central to Lessin's investment strategy, offering a flexible alternative to traditional debt models. He emphasizes that equity aligns incentives and supports individuals in taking risks without the burden of debt, which can stifle entrepreneurial ventures 4. Critics often misinterpret this model as indentured servitude, but Lessin clarifies that it provides creators with freedom and capital without controlling their work 5. By investing in creators early, Lessin aims to provide them with the resources needed to explore various opportunities, aligning with the venture capital model of supporting talent 6.

Debt looks a heck of a lot more like indentured servitude than what we're doing here.

--- Sam Lessin

This approach allows creators to focus on their growth and innovation, rather than immediate financial returns.

   

Investment Trends

Current trends in startup investing reveal a shift towards supporting individual creators and smaller ventures. Lessin notes that traditional venture capital often overlooks these opportunities, focusing instead on larger, established companies 7. By investing in creators and emerging markets, Slow Ventures aims to capitalize on areas that are not yet overfunded, thus maximizing potential returns 8. Despite challenges such as the lack of historical data and downstream markets, Lessin remains optimistic about the future of creator investments, believing that the power of personal brands will continue to grow 9.

The tailwind is towards creators in these kind of communities being more and more powerful.

--- Sam Lessin

This strategy reflects a broader trend of aligning investment with the evolving dynamics of the creator economy.