🔴 Investing $60m in creators

Is there any difference between a content creator and a startup founder?

For this week’s edition, I spoke with Billy Parks, an investor on Slow Venture’s $60 million Creator Fund, launched earlier this year. In August, the fund announced their first investment: $2 million for Jonathan Katz-Moses, a creator known for his woodworking content and extensive product line serving that same community.

In this episode:

— Francis Zierer, Lead Editor

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By Francis Zierer, Lead Editor

Twenty years ago, Billy Parks was an independent producer shuttling between music video, commercial, and feature film projects in New York and Los Angeles. Today, he is a venture partner working on Slow Ventures’ Creator Fund.

Billy came to Slow from The Chernin Group, a firm with some $1.5 billion in assets under management, where his work involved writing checks of around $30 million.

That’s equal to about half of Slow’s entire $60 million Creator Fund (only a small portion of Slow’s total assets under management — they’ve reportedly deployed over $800 million since 2011). The checks Billy writes today are in the $1-3 million range.

At Chernin, Billy worked with creators-entrepreneurs like Doug DeMuro, a popular YouTuber and founder of Cars & Bids, an online automobile auction site, or Kevin Espiritu, founder of Epic Gardening.

In August, Slow announced their first investment: $2 million for Jonathan Katz-Moses, a woodworking YouTuber with around 600k subscribers. He is the founder of KM Tools, a woodworking tools and accessories brand grown from his work as a content creator.

Katz-Moses’ businesses brought in around $6 million last year, around 70% of which Slow reports came from his product line. Among the traits he and DeMuro or Espiritu share: they’re focused on “niche passion categories.” This doesn’t mean small; the global woodworking tools market, according to Slow, is projected to reach $10 billion by 2030.

Creators — especially those attractive to venture capital — are entrepreneurs.

Megan Lightcap, also a partner on the Slow Creator Fund, frequently publishes clear-eyed articulations of their philosophy through their Slow Upload newsletter. Last week, she outlined how they see the difference between “a founder building in public and a creator-founder.”

Founders building in public, she explains, may have a prolific presence across platforms, but their content is focused on the company.

Creator-founders, on the other hand, “also create content (often much more than their counterparts), but their personal brand, content, and community serve as the foundation for multiple revenue streams and product lines.”

In other words, the difference, for the Slow Creator Fund, between a founder who creates content and a true creator-founder is the brand’s focal point: company vs. person.

Customers buy from Katz-Moses because they learn from and trust him; why would they go to Home Depot or Amazon if he has what they need in-house and they’ve seen him use it on camera?

"If you are learning from Missouri Star Quilt Company, the lady who has this amazing YouTube empire teaching people how to quilt, then you go to her store and you buy all the materials because you want to support your creator," Billy told me. "You don't need to go to whatever the other quilting supply stores are."

In these cases, the quilting (or woodworking) enthusiast, as much as they’re buying supplies, purchases to support the expert who taught them the craft.

I attended Colin and Samir’s marquee event, Press Publish NYC, in Brooklyn last week. Billy was on a panel alongside Ashley Alexander, a YouTube creator and founder of Nami Matcha, speaking about how creators should approach building “non-media” businesses. One moment, from Billy’s back-and-forth with an audience member near the end, stuck with me.

The core of this creator’s question was, if I’m growing my business and launching product lines, how do I hire a CEO?

You don’t. Billy asked him why he felt he needed a CEO, why he couldn’t do it. If you hire a CEO, you are ceding the future of the business to somebody else. You are giving up countless decisions. You are choosing to step away.

For most creator-founders, Billy stressed that it’s best to fill the CEO role yourself and delegate what functions you can; a CEO establishes and disseminates a vision, hiring a team to fulfill the elements they are not best suited to execute themselves. They still have to make content, too.

Billy’s answer was hardly surprising. The figure at the core of the Slow Creator Fund’s thesis is the “Creator CEO.”

When I spoke to him on the podcast, Billy framed the key frontier in creator education as being not about brand deals, thumbnails, and audience growth, but about business.

Slow announced the Creator Fund in February, and Katz-Moses was one of some 700 people to apply. He’d had conversations with potential investors before, but always backed out when they demanded a degree of control in the business. The $2 million he accepted from Slow (for a stake of around 10% of his business) came with no such strings attached.

This is a feature of the fund, as Billy told me:

There’s a saying in startup investing: “Bet on the jockey, not the horse.” Especially in early-stage investing, the idea matters less than the person realizing it. Every startup has competitors, and every startup tweaks its roadmap. Some pivot products entirely. The passion, skill, and drive of the people executing comprise the delta.

Katz-Moses had already built up a strong product business, with a staff of more than 15 people manufacturing around 66% of its 150-some products itself in a 33,000-square-foot warehouse.

The businesses Slow invests in make content, but rarely make all of their money from traditional content monetization channels, like advertising or subscriptions. Katz-Moses, for example, eschews outside sponsors, advertising only his own products. This is not to say Slow’s Creator Fund will never invest in creators who’ve yet to launch product businesses.

Building an audience still isn’t easy, but it’s increasingly becoming table stakes now. The most scalable, profitable opportunities are in using that audience to validate and scale product businesses.

Connect with Billy on LinkedIn.
Learn more about the Slow Ventures Creator Fund.
Register for Slow’s Creator CEO Summit (in Los Angeles on September 18).

“There are two types of business creators can build,” Billy told me. “A lifestyle business or a scalable, venture-scale business.”

I asked Billy to share any red flags he looks out for among creators he’s considering for investment. Regardless of which path you’re on — even if you’re building a small-scale business — you’d do well to avoid practicing Billy’s red flags.

Velocity matters. Great leaders have the ability to make informed decisions quickly; leadership means doing this over and over.

In the same vein as the above, if the creator doesn’t take it upon themselves to pursue a deal — even if they’re actively pushing for it, but only through lawyers and agents, never directly, that’s a red flag. As Billy put it to me, “We’ve got to make sure that they’re running the show.”