The creator economy is a recently established investment category that has emerged alongside the growth of social media and the increase in individuals creating content. Similar to traditional media companies, creator startups often rely on major platforms like Google and Facebook for revenue, which can be unpredictable. Over the past year, some startups have faced challenges and some have even closed down. However, there are still startups that are thriving and attracting investment.
Creator startups typically have lower operational costs compared to older media companies, which allows them to experiment with new business models without taking on significant financial risks. For example, Fallen Media based in New York produces shows for the TikTok audience at low production costs, enabling them to try out different shows and gauge their performance without excessive spending.
Startups in the creator economy that focus solely on influencers for revenue may encounter difficulties. On the other hand, companies that leverage creators to generate income in other sectors like e-commerce or consumer products tend to have more success. A new wave of startups is emerging that emphasize community-building over the influencer craze.
Rex Woodbury, founder and managing partner at the VC firm Daybreak, views the creator phenomenon as a broad trend across various verticals and sectors. He believes that venture-backed companies in the creator economy often fall into other categories as well. Business Insider is currently compiling a list of venture capital firms that are investing in the creator economy. They are seeking input on which VC firms are supporting the companies that will drive growth in the creator industry in the coming months. Submissions can be made through a provided form by June 18.