Announcing Creator Ventures Fund 1
We are delighted to announce the launch of Creator Ventures Fund 1, our $20m first venture capital fund, which we raised and closed in March of this year.
Creator Ventures is a consumer-internet, early-stage venture capital firm focusing on “companies advancing how humans interact”. We will invest in 50+ companies, mostly focused on Seed, with a flexible global mandate.
It has been quite a journey. Creator Ventures started in 2019 as a VC side-hustle (originally called “Creative Investment Club”). Caspar and I, cousins and long-time friends, wanted to start angel investing alongside our full-time jobs (mine in private equity investing, Caspar’s as the cofounder of influencer.com and Margravine, as well as being a creator).
We decided to share our deal flow with Caspar’s network of creators and celebrities, free of charge. Our “Creative Investment Club” included several household names with a combined audience of over 100 million. This group invested alongside us deal-by-deal in deals relevant to them. This, on top of Caspar’s experience and advice, gave us a creator and social media value-add. We were able to invest in some exceptional entrepreneurs, which ultimately delivered us a strong track record.
So now, with the help of our LPs, advisors and mentors, we have embarked on the next stage for Creator Ventures: we have raised a fully-fledged venture capital fund of $20m.
Our focus is unchanged. We will continue to share deals with creators and celebrities. We will continue to focus on what we know best: the consumer-internet economy. And most importantly, we will continue to invest early in the very best founders from around the world.
We have four investment themes of interest:
- Creator economy
- E-commerce enablement
We believe that our sector focus allows us to take contrarian views, which is the only way to generate above-market returns sustainably. At the bottom of this post are some more specific themes that we are looking to invest in. These will be the subject of future blog posts, released over the coming months.
If you are building an early-stage company attacking one of these themes, or know somebody exceptional who is, please get in touch at [email protected]
Finally, thank you to our LPs, portfolio founders, and advisors, who have been with us on this journey to now. We will always appreciate the faith you have in us, and we hope to multiply it several times over.
We spoke to Eleanor at Sifted here. If you would like to follow our journey, you can follow us on Twitter here: Sasha and Caspar, or follow our Beehiiv blog by subscribing below. We will try to make our posts considered (but infrequent).
Sasha and Caspar
For a taste of the topics we are interested in:
- “Big Social” apps that dominated from 2005-2020 (especially Instagram) have become tired; there is a generational opportunity to replace them (specifically: by unbundling their features). Our next blog post will be on this topic.
- WhatsApp and other messaging platforms will form the next wave of application, social and commerce platforms, and many billion-dollar businesses will be built developing on top of them.
- Gaming will continue to be the economic powerhouse of entertainment (but we believe that web3 is not a good fit here; it requires Pay To Win, which we don’t believe Western populations will accept at scale).
- Consumer app development will become entirely productized, meaning companies that can build and manage multiple apps at scale will continue to squeeze out “long tail” smaller app publishing startups.
- Unlike almost any other product category, the best marketplaces often “compete with free”, like Airbnb (couchsurfer), Uber (hitch-hiking) and our portfolio company Bounce (hotel luggage storage).
- Metcalfe’s law rarely applies; quality usually trumps quantity and marketplaces often experience strong anti-network effects.
- Marketplaces only work with exceptional unit economics, as they tend to deteriorate rather than improve, over time; investors need to apply a significant margin of safety to every metric they see.
- Marketplaces will almost definitionally be low margin; they only work when their end-product has been standardised sufficiently to become a commodity.
Creator economy themes:
- Creators behave more like consumers than SMEs. This is why creator economy backend SaaS companies (productivity tools, financing tools, etc.) are mostly doomed to fail. Creator economy frontend SaaS (content creation tools, distribution tools), like our portfolio company Beehiiv, tend to have better prospects.
- The creator economy and web3 are not a good fit, despite many VCs’ wishes. Creators are typically too concerned with their brands to risk selling financial assets to their followers (remember that in efficient markets, the incremental buyer definitionally loses money).
- Influencer marketing has been one of the most underrated VC trends of recent years, it will continue to rapidly grow share of the overall marketing mix.
E-commerce enablement themes:
- E-commerce roll-up business models that rely on acquisition arbitrage will create PE returns, not VC returns.
- D2C can create venture-style outcomes, but only with exceptional product, community, margins and retention.
- Last-mile logistics are and always will be structurally low-margin in Western markets, and normalised gross profit multiples are the only appropriate way to value them.
- Social shopping is at day zero. TikTok and equivalents will in the future generate comparable retail volume to Shopify.