Last week I hosted Phil Ranta, CEO of Stealth Talent, for a livestream about how creators can get equity in startups.
Phil's a smart guy - he beat me out for the Head of Gaming Creators role at Facebook, ran networks at Fullscreen and Studio71, and was a C-level exec at two top Creator management companies.
Now he's pioneering a model where Creators invest their influence to get ownership.
He’s an early mover in what I believe will be a massive wave within the Creator Economy:
The Ownership Economy: Where Creators leverage their content and audiences to own equity in businesses that can generate meaningful long-term upside and potentially yield generational wealth.
Ownership is why so many people who work in tech get so wealthy. Startup equity is obviously the story that the media likes to talk about - Remember that artist who became a billionaire by getting paid in Facebook shares for decorating their first office?- but even regular employee shares in large publicly traded companies can make you very rich.
For example, today 78% of NVIDIA employees are millionaires, with half of them estimated to have over $25 million in net worth.
Good luck making that much from a salary or brand deals.
Today, equity partnerships are reserved for very large Creators and usually only granted by venture-backed startups. That's Phil's focus.
I believe that soon, Creators of all sizes will have access to the Ownership Economy. After all, even small local businesses have ownership structures, and you don't need to own a venture-backed startup or publicly traded company stock to have your ownership be worth a meaningful amount. The richest guy in my town growing up owned a chain of mattress stores.
As the Ownership Economy becomes more accessible, we're all going to need to get a lot smarter on it…so here are some things to keep in mind, taken from my conversation with Phil, about how Creators should approach equity partnerships:
Think like an investor, not just a promoter
Before you agree to any equity deal, ask yourself: would I invest my own money in this company?
Phil’s POV is simple:
"If it's a company that we don't think could survive without a Creator or wouldn't be able to stand on its own feet if the Creator were to go away, we probably shouldn't do it. Creators are supposed to be rocket fuel. They're not a crutch."
The David Dobrik Dispo disaster proves this. The app hit top 10 in downloads thanks to David's fame, then collapsed completely when he had a scandal and went offline. If the entire business model is "Big Creator uses it,” it’s not a business model.
Compare that to CaptainSparklez partnering with Super League Gaming—a company running in-theater Minecraft events for kids. It aligned perfectly with his audience, but had a strong business concept without him. The company went public during COVID, and his equity was reportedly worth millions at peak. The company worked because it solved a real problem, not because a Creator promoted it - but the Creator partnership was able to give it the rocket fuel it needed to grow.
This concept applies to companies big and small. Whether it's a venture-backed startup, a local coffee shop, or a small Etsy craft business that wants to partner with you, consider whether you believe in the product and the founders enough that you would invest your own money. If yes, then it's worth investing your content and/or influence.
Demand equity PLUS cash
Equity alone is worthless. Phil's math is straightforward:
"If we pick our companies well, one in 10 will have a liquidity event. So if that is true, then we are valuing equity at about 10% of how you would value cash."
Translation: if you normally charge $10,000 for a promotion, you need roughly $100,000 in projected equity value to justify the risk.
Now, I don't necessarily agree with this. Phil works with the very biggest Creators, so they have a lot of leverage. You might not have that kind of leverage. The point is, however, that the odds are not in favor of your equity actually being worth anything. There is a bit of gambling happening here.
Regardless, you can't wait years for a maybe-exit - so build in the opportunity to make some cash. The best deals combine equity with cash generated through performance-based payments—affiliate commissions, customer acquisition bonuses, that kind of thing.
Basically, if what you're doing is working, you should get paid in cash too. Any good company will agree to this because you're not charging them up front. Equity should be your compensation for promoting them with no upfront payment, and cash should be your compensation for performing well.
Get a reasonable amount
People always want to know: how much equity should I get?
Phil structures deals in three tiers:
Creator Advocate (0.25-0.5% equity) for short-term partnerships of up to a year.
Creator Ambassador (0.5-5% equity) for ongoing promotion over 2-3 years, with monthly vesting plus performance-based cash revenue.
Creator Partner (5-51% equity) for co-founder level involvement. This is pretty rare but could happen if your niche perfectly aligns with an emerging company's niche.
Now it's important to keep in mind that these ranges make sense for venture-backed startups. There's a lot that goes into venture-backed companies. Even if one Creator takes a company from $0 to $1M in sales, that may still only warrant a couple of percent of the company since there are hordes of engineers, product people, investors, etc. that also get a piece of the pie.
A small business might be very different. If you can blow up a local coffee shop, marketing agency, or online clothing brand, the owners might be willing to give you 10%, 20%, 30%.
Who knows - it’s all a negotiation.
Still, regardless of how much equity you have, as Phil pointed out: "Unless there is some sort of liquidity event, equity means nothing. It's literally zero."
Which brings us to the last thing to remember:
Act like you own the company.
Once you take equity, you're an owner. Act like it.
Equity has value because a multiple is placed on every dollar of profit.
If you have equity, your goal becomes to help the company make as much profit as possible.
If you believe in the product, made a deal that pays you in both equity and cash, and have a reasonable amount for the amount of effort you need to put in, you should have no problem talking like it’s also your company - and bringing your audience into that story.
And that's ultimately how you succeed, and get a big piece of something much bigger than an individual Creator business.
The average career length of a content Creator is 5-7 years. This range might increase as the Creator Economy grows, but ultimately, the point is that your influence is temporary.
Equity can get you a piece of something much bigger and longer lasting than an individual Creator business can be - but only if you execute well.
Want to hear my full conversation with Phil?