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Should VCs invest in people?
The Future. Major venture capital firm Slow Ventures has started investing in individual people that the firm believes could one day be “superstars.” This forward-thinking approach gives visionary talent room to create and experiment with money in hand, while giving VCs the chance to strike it rich. As the creator economy goes into full swing, it may be more beneficial for investors to focus on talented, ambitious individuals who could be making money for a long time.
The future of investing may be in people instead of companies. VC firm Slow Ventures has been experimenting with some ideas:
- Investing directly in entrepreneurs. Slow Ventures invested in The Liberman Company — a holding company founded by four serial-entrepreneur siblings. This gives the VC earnings from all of their startups instead of individual ventures while giving the Liberman’s more equity value as a combined force.
- Investing directly in creators. Slow Ventures also invested in YouTube-creator Marina Mogilko. The VC created an “investment LLC” for Mogilko, which is a fund that she can use at her discretion to pay for both her content and her cost of living. In return, the VC receives “a single-digit percentage of all of the money she makes annually for 30 years.”
The individual-investment infrastructure gives entrepreneurs and creators some obvious benefits: up-front money, institutional support, and creative freedom. Meanwhile, VCs get a chance to cash out if they believe that someone has what it takes to become a household name, getting in early while they’re still young and at the start of their careers.
As Slow Ventures General Partner Sam Lessin says: “Just think about buying 5% of Jeff Bezos’ or Elon Musk’s future earnings back when they were both young pups.” Now that would be a wild return on investment.