$100M YouTube Lawyer Reveals How to Protect Your Channel in 2026
An entertainment attorney who runs $100 million creator exits explains why most YouTube channels are worth less than they think, and what actually makes one sellable.
Posted
3 days ago
Duration
Format
Interview
educational
Views
5.5K
67 likes
57 · 43
Big Idea
The argument in one line.
A YouTube channel is a tenancy, not an asset, until a creator builds owned revenue streams and a clean legal structure around it, and the same fixes that make a channel sellable for eight or nine figures also make it the best business to simply keep.
Who This Is For
Read if. Skip if.
READ IF YOU ARE…
A creator with a meaningful audience or six-figure-plus revenue who has never audited their own corporate structure, contracts, or IP ownership.
Someone who has received, or is considering, an acquisition or investor offer for their content business.
A creator who feels burned out and is wondering whether the real answer is selling the business or just stepping back for a while.
Anyone building a physical or digital product off the back of an audience and wondering how to price, structure, or launch it.
SKIP IF…
You're a brand-new creator with no revenue yet; this is about protecting and scaling an existing business, not starting one.
You run a reaction or compilation channel and aren't interested in fixing the underlying rights issues the episode says make that content nearly unsellable as-is.
TL;DR
The full version, fast.
Entertainment attorney Tyler Chou, who runs eight and nine-figure exits for YouTube creators, argues most channels are worth far less than they could be because creators build entirely on rented platforms with no email list, a messy corporate structure, and unclear rights to their music, B-roll, and contractor work. She walks through the legal cleanup that precedes any real exit: one LLC per revenue stream, work-for-hire agreements, fixed contractor misclassification, and owned footage. Buyers pay the highest multiples for recurring revenue that doesn't depend on the creator's face, so diversifying into subscriptions, software, and physical products matters more than growing the channel itself. Her core reframe: a business built to sell is also the best business to keep, and sometimes what a burned-out creator needs isn't an exit, it's a sabbatical.
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Cold-open montage stating the platform-risk thesis, then the formal welcome to guest Tyler Chou, the creators' attorney.
01:09 – 03:52
02 · Private equity looks to buy YouTube channels
Private equity, studios, and streamers are now actively buying creator-led businesses; only 1 of 10 surveyed mega-YouTubers had an email list of their audience.
03:52 – 04:52
03 · Creator burnout
The most common question Tyler hears from creators: is this it, do I make videos forever, because I'm getting tired.
04:52 – 08:20
04 · Protecting your IP and avoiding mistakes
What actually gets purchased in a $100M exit; the pre-deal audit checks chain of title, clean B-roll and music, and work-for-hire contracts.
08:20 – 10:43
05 · Diversifying revenue beyond AdSense and brand deals
Newsletters, communities, courses, and technical products (apps) as additional revenue streams; owning your audience versus renting it.
10:43 – 12:46
06 · Avoiding misclassification lawsuits
Independent contractors who function as full-time employees create hidden liability that surfaces in labor audits and can tank a deal.
12:46 – 17:45
07 · The problem with reaction channels
Reaction channels are close to worthless to buyers because the creator doesn't own the underlying clips; IP trolls buy up small creators' clip rights to extract settlements.
17:45 – 23:11
08 · Why buyers love recurring revenue and technical products
AdSense and brand deals are the floor; recurring revenue and technical (app) products command 10-20x multiples, but need a real CTO audit.
23:11 – 28:20
09 · The power of artificial scarcity
Deliberately capping supply below demand, and bringing the audience into the design process, keeps a product line in permanent high demand.
28:20 – 37:48
10 · How to make your brand less dependent on the creator
Naming products separately from the creator's own name, and structuring the business so it survives a 12-24 month absence, is what buyers actually pay for.
37:48 – 43:49
11 · Should creators sell their business?
A business valued at $35M reached $100M within a year once it added a team, more revenue streams, and a standalone technical product instead of selling early.
43:49 – 45:00
12 · You might need a sabbatical, not an exit
Some 'should I sell' conversations are really burnout conversations; a deliberate break can restore both the creator and the channel.
45:00 – 51:08
13 · How to protect yourself from predatory buyers
Buyers who ask for raw files 'to analyze' are often after the tech stack, vendor list, and cohort data; strong NDAs and an attorney prevent a buy-or-build outcome.
51:08 – 54:19
14 · Hiring operators to run products
Fractional CEOs and third-party product-launch companies let creators keep making content instead of running fulfillment, for a revenue split.
54:19 – 56:29
15 · The power of angel investors on your cap table
Small angel checks from fans-turned-investors, and secondary share sales, build a support network without the oversight a private equity fund brings.
56:29 – 1:11:08
16 · The value of books for creators
Books condense credibility into a $20 product; a hybrid publishing model splits costs and pays authors 70% of profits instead of the traditional 30%.
1:11:08 – 1:14:10
17 · Building a network of channels
Back catalogs can be licensed to streamers as brand-safe content; owning or acquiring a network of smaller channels reduces key-man risk.
1:14:10 – 1:17:33
18 · Where to find Tyler
Sign-off, where to follow Tyler Chou, and a pointer to a related episode with Ali Abdaal.
Atomic Insights
Lines worth screenshotting.
Buyers pay 10-20x multiples for revenue streams that don't depend on the creator's face showing up, like subscription apps and physical products, versus far lower multiples for one-off launches.
At a private masterclass of ten YouTubers with 10 million-plus subscribers each, only one had ever built an email list of their own audience.
Reaction channels can be worth close to nothing to a buyer no matter how many views they have, because the creator doesn't own the underlying clips.
IP trolls buy the rights to small creators' individual clips for a couple hundred dollars each, then use them to extract six-figure settlements from the big creators who compiled them.
YouTube stopped helping large creators fight copyright strikes years ago, because the sheer volume of claims makes it a legal liability the platform won't step into.
An independent contractor who works fixed hours for one creator for years is legally an employee, and the misclassification usually surfaces only when they file for unemployment and trigger a labor audit.
A creator business making $10 million a year commonly runs through a single LLC, meaning a lawsuit against one revenue stream can reach every other asset the creator owns.
Buyers now routinely bring in a technical audit for AI-built ('vibe coded') apps, because looking good in a demo and being secure enough to sell to real customers are different bars.
Deliberately capping supply below demand, like selling 2,000 units when 10,000 people want them, keeps a product line in permanent high demand instead of flooding the market once.
A private-equity acquisition case study is considered successful specifically because the audience never noticed the ownership change for over a year after the sale closed.
A journal-and-conversation-cards company was bought back by its original founder years after a private-equity sale, for roughly the price of the warehouse inventory, once new management let it decline.
Every M&A deal in this space now gets a buyback clause built in, because founders have regretted clean, successful exits within a few years.
A hybrid publishing model pays an author 70% of profits instead of the traditional 30%, by splitting production and ad-spend costs 50-50 between author and publisher up front.
A self-published book sold over a million copies but never made the New York Times list, until it was re-released through a hybrid publisher and spent 25 weeks on it.
When a prospective buyer asks a creator to just hand over raw files 'to analyze internally,' the real target is often the tech stack, vendor list, and customer cohort data, not the acquisition itself.
Buyers watch for whether a founder is taking a salary at all, because founders who reinvest everything or pay themselves nothing understate what a replacement CEO or CTO would actually cost.
A niche journaling creator sold roughly a million units of a $50 product on a single launch day, about $50 million in first-day revenue, after ten years of matching content.
Angel investors who put in roughly $100,000 each and never ask for updates can be a better funding source than institutional money, because they add advisors with skin in the game and no operational control.
Takeaway
The legal cleanup that makes a channel sellable or keepable.
WHAT TO LEARN
Buyers pay for independent, recurring revenue and clean legal structure, not raw view counts, and the fixes that satisfy a buyer are the same fixes that let a burned-out creator step back without losing the business.
02Private equity looks to buy YouTube channels
Private equity funds now actively buy YouTube channels, but they're really buying independent revenue streams around the channel, not the AdSense income itself.
Only one out of ten YouTubers with 10 million-plus subscribers, surveyed at a private masterclass, had ever built an email list of their own audience.
03Creator burnout
A recurring question from established creators isn't about growth, it's whether they're required to keep making videos forever just because the channel exists.
Six years after many channels started during the pandemic, burnout has become common enough that exit conversations are often really burnout conversations.
04Protecting your IP and avoiding mistakes
Before any deal talk, an audit checks four things: chain of title on every video, clean music and B-roll rights, proper work-for-hire contracts, and a defensible corporate structure.
Most six and seven-figure creator businesses run through a single LLC, which means every revenue stream shares the same legal liability as every other one.
05Diversifying revenue beyond AdSense and brand deals
Owning your audience isn't abstract: it means an email list and newsletter that survive if the platform account disappears overnight.
Technical products, apps built with AI tools, are called out as the current highest-multiple opportunity, because buyers pay for independent, recurring revenue.
06Avoiding misclassification lawsuits
A contractor who works fixed hours for one creator for years is legally an employee, and the mismatch usually surfaces only when they file for unemployment and trigger a labor audit.
Buyers will cut an offer by half or walk away entirely once they find a pattern of misclassified employees, because it's treated as a stack of pending lawsuits.
07The problem with reaction channels
A reaction channel with hundreds of millions of views can still be worth close to nothing to a buyer, because the creator doesn't own the clips being reacted to.
The fix for reaction content is boring but real: ask permission, collaborate with the original creator, or pay a small licensing fee up front.
08Why buyers love recurring revenue and technical products
Buyers pay 10-20x multiples for recurring revenue like subscriptions and SaaS products, versus much lower multiples for one-off product launches or consumables.
An AI-built app still needs a real technical audit before going to market: looking good in a demo and being secure enough to sell to real customers are different bars.
09The power of artificial scarcity
Deliberately capping supply below demand, rather than scaling to meet it, keeps a product line in permanent high demand instead of flooding the market once.
Bringing an audience into the design process before a product launches creates ownership that makes people defend and re-buy the product.
10How to make your brand less dependent on the creator
The best creator-led products are named separately from the creator, specifically so the business can be sold or run without them.
Buyers ask whether a business would still run well if the founder disappeared for 12-24 months; that answer, not the current revenue number, sets the real multiple.
11Should creators sell their business?
A business audited and prepared for a $35 million exit reached $100 million within a year once it added a real team, more revenue streams, and a standalone technical product.
A business built to be sellable, with recurring revenue and low key-man risk, is also simply the best business to keep.
12You might need a sabbatical, not an exit
Some 'should I sell' conversations turn out to actually be burnout conversations, and a deliberate break can restore both the creator and the channel without a sale.
One creator took a full year off content, lost subscribers, and came back with her audience picking up where she left off, once her mental health recovered.
13How to protect yourself from predatory buyers
When a prospective buyer asks for raw files 'to analyze internally,' the real target is often the tech stack, vendor list, and customer cohort data, not the acquisition itself.
A strong NDA with residuals protection, non-solicitation, and trade-secret language before any deal conversation prevents a buy-or-build buyer from just copying what they saw.
14Hiring operators to run products
Not taking a founder salary while reinvesting everything back into the business quietly understates real costs, since a buyer will add back $200-400K for a replacement CEO or CTO.
Third-party operators who launch and fulfill physical products for a revenue split let a creator keep making content instead of packing boxes, and 80% of new revenue beats 0%.
15The power of angel investors on your cap table
Angel checks of roughly $100,000 each, spread across ten or twenty investors who are already fans of the product, buy advisors and a support network without the oversight a private equity fund brings.
A secondary sale, where existing shareholders cash out some equity without the company raising new primary capital, can solve a team's liquidity pressure without changing how the business runs.
16The value of books for creators
A hybrid publishing model splits production and marketing costs 50-50 between author and publisher up front, then pays the author 70% of profits instead of the traditional 30%.
Self-published books can sell over a million copies and still never appear on a bestseller list; re-releasing through a hybrid publisher can put the same book on the list for months.
Committing to a small daily writing minimum, done first before anything else in the day, is credited as the difference between a book that stalls for years and one that actually gets finished.
17Building a network of channels
A back catalog of brand-safe videos is itself a sellable asset: streamers pay licensing fees for pre-made, kid-safe content they don't have to produce or risk-vet themselves.
Building or acquiring a network of smaller, adjacent channels reduces key-man risk and reads to a buyer as a media company instead of a single personality.
Glossary
Terms worth knowing.
Chain of title
The unbroken paper trail proving a creator, or their company, legally owns every piece of a video: the footage, the music, the B-roll, and any code created by contractors.
Work-for-hire
A contract clause stating that anything an employee or contractor creates belongs to the person who paid for it. Without it, the person who wrote the code or shot the footage can legally claim ownership themselves.
Misclassification
Treating a worker as an independent contractor when they actually function as a full-time employee. It creates hidden legal liability that surfaces when the worker later files for unemployment and triggers a labor audit.
Key man risk
The risk, from a buyer's view, that a business's entire value disappears if one specific person stops showing up. Buyers pay less, or walk away, when a business can't run without its founder.
IP troll
Someone who buys the rights to small, individual clips cheaply, then uses them to threaten large creators who used those clips in a compilation, demanding a settlement instead of suing the original small creator.
Buy-or-build
A posture some acquirers take in due diligence: they examine a company's product and, if they decide not to buy it, build a competing version themselves using what they learned.
Secondary transaction
A funding round where investors buy existing shares from current employees or founders, giving them cash, rather than the company issuing new shares in exchange for new capital.
Cap table
The list of everyone who owns equity in a company and how much. Adding investors, even small angel checks, adds names and stakes to it.
Hybrid publishing
A publishing arrangement where the author and publisher split production and marketing costs roughly 50-50 up front, and the author keeps a much larger share, around 70%, of profits afterward.
1:05:00productAuthor's Equity (hybrid publisher founded by James Clear and Madeline McIntosh)
1:05:50bookThe Ladders of Wealth (Tyler Chou's upcoming book)
Quotables
Lines you could clip.
00:00
“We are all tenants on YouTube's land, on Meta's land, on TikTok's land, and they can kick us off at any time.”
States the whole episode's thesis in one line, no setup needed.→ TikTok hook↗ Tweet quote
03:20
“So if any of your channels goes down tomorrow, you have no way to reach your audience, 10 million plus.”
A concrete, shocking stat (1 of 10 huge YouTubers had an email list) does the persuading.→ IG reel cold open↗ Tweet quote
08:50
“Data is the new oil. Like you need to own your audience.”
Short, quotable reframe of a familiar phrase applied to creators.→ newsletter pull-quote↗ Tweet quote
13:20
“Reaction channels are worthless. Like if you have a big reaction channel, no buyer will touch that because you don't own any of those videos.”
Blunt, contrarian claim that contradicts what view counts suggest.→ TikTok hook↗ Tweet quote
27:30
“Humans are interesting because if you tell them, well, you can't have it, they're like, oh, no, I need it.”
A punchy one-line psychology insight, no context required.→ newsletter pull-quote↗ Tweet quote
44:20
“You didn't need an exit, you needed a sabbatical.”
A six-word reframe that lands as the emotional turn of the whole episode.→ IG reel cold open↗ Tweet quote
47:50
“Please, if a buyer says, hey, just give us the raw files, we'll just analyze it ourselves, please don't do that. Please have an attorney.”
Direct, actionable warning stated as urgently as it's meant.→ TikTok hook↗ Tweet quote
56:40
“I think the books are fantastic because it condenses so much experience that you have into something so attainable for 20 bucks.”
Crisp value proposition for why creators should write books.→ newsletter pull-quote↗ Tweet quote
Topic Map
Where the conversation goes.
00:00 – 10:43denseWhy private equity is buying YouTube channels and the platform-risk problem
10:43 – 17:45denseCleaning up legal risk: IP, contracts, misclassification
17:45 – 37:48denseRevenue diversification and recurring revenue that beats AdSense
37:48 – 51:08denseShould you sell? Burnout, sabbaticals, and predatory buyers
51:08 – 56:29steadyBuilding the team and capital stack: operators and angel investors
56:29 – 1:11:08denseBooks as a credibility and distribution play
1:11:08 – 1:17:33steadyBack catalogs, streaming deals, and building a network of channels
The Script
Word for word.
Read-along
Don't just watch it. Burn it in.
See every word as it's spoken — crank it to 2× and still catch all of it. The same dual-channel trick behind Amazon's Kindle + Audible.
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metaphoranalogystory
We are all tenants on YouTube's land, on Meta's land, on TikTok's land, and they can kick us off at any time. YouTubers are sitting on businesses worth far more than they realize. Many have built their entire enterprise on a platform they don't own.
If any of your channels goes down tomorrow, you have no way to reach your audience. Tyler Chow has spent 20 years as an entertainment attorney at Disney, Skydance, and BuzzFeed, and she was lead counsel on 18 feature films. Now she represents some of the biggest channels on YouTube.
One thing I want to caution creators about is... She explains what makes a business worth buying, but also why some creators don't need to sell at all. They actually just need to take a sabbatical.
The number one question I get from creators is, Tyler, Is this it? Like, do I just make videos for the rest of my life?
Because I'm getting really tired. Investors and studios are buying up creative businesses. And Tyler is the person who runs those deals.
A lot of creators will say to me, well, like, what product should I launch? Like, I don't know. And this is my favorite strategy.
I love that.
Tyler, welcome to the show. I'm so honored to be here. Thank you for having me.
So you and I have some of the favorite, like... are some of our favorite topics in common, which is building large businesses, creator -led, and doing it in a way that is sustainable and everything else. So you're talking to creators right now about how do you build for an exit?
How do you protect your IP? All of those things. What are some of the things that you're seeing right now in the creator space?
If you're talking to private equity or any of these others, they're coming in, they're saying, hey, you have attention, we have money. What should happen? Like, what are you hearing from the private equity side and the creators and the match or the mismatch that's happening right now?
Well, so what's super exciting is private equity fund, studios, streamers all understand now, right? We've been talking about it for years, but they finally are here. They get it.
They're like, okay, clearly, you know, Unilever last year saying we're dedicating 50 % of our ad spend to creators and digital media. And I think that was a big indicator for the big Fortune 500 companies to start paying attention. So the private equity funds are coming and saying, okay, we want to buy YouTube channels.
But what does that mean? I just came back from Cannes Film Festival. My first time, I was in Hollywood for 20 years.
I never got invited. But now that I represent big YouTubers, now they want to hear me talk. And so it was quite a, you know, kind of watershed moment.
And they had their first creator summit there. I think private equity funds are saying, well, what does it mean to buy a YouTube channel? Right.
Or what does it mean to buy a creator led business? Because they think, well, it's a YouTube channel. I guess there's AdSense dollars.
You know, I think there's brand deals, but there's so much risk around the key man. Yeah. Right.
So what happens if this YouTuber doesn't want to make videos anymore? You know, are we buying, I guess, is it maybe the back catalog? Is it the videos?
You know, can we license it to streamers? And yes to all of those. But the clients that I'm selling for $100 million have 15 revenue streams in addition to their YouTube channel because they're building on their own land.
They have an email list. They have a newsletter. You know, that's very important.
Only your audience is... The data, you know, data is the new oil. Like you need to own your audience.
I was at a masterclass back in December with 10 of the biggest YouTubers, all over 10 million subscribers. I asked them, I said, you know, can you raise your hand and let me know how many of you have an email list of your audience? Do you know how many raised their hands?
Oh, I'm guessing four. One. One, oh no, 10%.
I know. And I said, so if any of your channels goes down tomorrow, you have no... you have no way to reach your audience, 10 million plus.
And I think the horror on their face, I think they're starting to figure it out because what we're seeing in the marketplace is a lot of creators are approaching burnout, right? We're six years from COVID where a lot of creators started their channels. And the number one question I get from creators is Tyler.
is this it? Like, do I just make videos for the rest of my life? Because I'm getting really tired.
So a lot of them are coming to me asking me, okay, what is like, how do I get off this hamster wheel? And so that's where a lot of the interesting conversations are happening. I'm running three active exits in the creator space right now.
I have about three to five YouTube channels that are sort of behind them who are saying, okay, I want to exit in a year or two, get me buttoned up. Do I have clean chain of title? Which, by the way, they don't even really know that until I explain.
Do you have clean B -roll? Do you have clean music? Do you have work -for -hire language for your employees or independent contractors?
The answer to that is usually no. Okay, so I want to dive in on the mistakes that people make and how to fix them early. But before we do that, let's talk about the business model.
So when we're going to say an exit for $100 million, what actually is being purchased in that? Sure. There's the channel and the audience, but also usually there's a bunch more revenue streams.
Right. So sometimes, you know, the newsletter can be very valuable, but a lot of my client, Jim Lauderback, you know, he sells brand sponsorships and placements in his newsletter. It's that captive audience.
You know, if you have 30 ,000 of a specific audience in your newsletters, like. brands and the buyers potentially want that audience. Do you have a community?
Do you have a course? Do you have physical products? And my favorite right now are technical products, you know, apps.
And I'm sure you're seeing this, like every single, every other one of my clients is like, oh my God, with lovable and Claude, I've created three apps. And it looks great and it's beautiful. But then we bring, I will bring in a proper CTO for them who are actually, who are auditing it right now to even see if this is something that can go to market.
Digital products, I think, are really important. I mean, I recently met someone who made six figures, you know, selling an $89, you know, digital product. I think there are so many different ways to make money off platform, right?
I'm a big proponent of. You know, we are all tenants on YouTube's land, on Meta's land, on TikTok's land. And they can kick us off at any time.
And YouTube is doing huge cleaning up right now, right? They're terminating channels. They're demonetizing.
I'm sure you've heard of those stories. Probably friends who've asked you, oh my God, I lost my Instagram page. Can you help me get it back?
And Meta just doesn't even respond. There's no live person. So the anxiety of building on someone else's land is, I think, becoming...
more and more clear to creators that they need to build somewhere else what are the things that you've said or how you've been able to convince them besides the fear of loss we've covered that but to get them to say, okay, I have 5 million subscribers to my YouTube channel. You know, I'm going to follow in the footsteps of like, I think like Veritasium is an example.
They've built a really meaningful email list. Yeah. We should talk about Veritasium and MatPat.
You know, those are the two YouTube channels that have sold to private equity and their case studies right now, you know, private equity funds look at them and say, well, was that a successful acquisition? And the attention in um the views have gone down right since i mean veritasium has done a really good job like he derek didn't even really tell anybody for a year yeah and he's like surprised like i'm actually not the owner anymore but you guys haven't noticed for quite a while right and you haven't noticed any difference and this is you know so i think he's done a really good job you know matt pat i i don't follow it quite as well but i i and i don't know you know i wasn't the attorney on those deals so i don't quite know you know the structure but i do think and you we were talking about this off camera I sometimes will convince creators or my clients to not go towards an exit.
You know, the $100 million one that I'm running right now, we went out to market 18 months ago and we were told that his business was worth $35 million. And I told him, I said, you know what? Let's wait three years.
I think you'll hit $100 million in three years. And I was wrong because we hit it in less than a year. But that was because in that year, we built out the team.
We put in more revenue streams. We built an amazing technical app, a budgeting app that we could probably spin off for 30 or 40 million on its own. And that's what investors are looking for, right?
They're wanting independent streams of income that does not rely on the creator's face. Right. So in that example, if someone comes to you and says, hey, I have this $30 million exit as an example.
should i take it or not and if i were to take it can you help me shepherd it through to the to the finish line and you're saying hey i actually think you know if you're asking for my opinion i think no you shouldn't because you could triple this over the next few years what are the things that you're encouraging them to do between you know day one when they bring it to you and a year or three years later when it's like hey this is worth three times as much so Typically, I will come in and do an audit for them and say, OK, what is your corporate structure look like?
You'd be surprised. I've seen creator businesses making $10 million a year. That goes through one single LLC, right?
So they need a parent company. They need subsidiaries, one that holds the YouTube channel, one that holds the technical app, one that holds the physical products. Because every revenue stream has its own liabilities.
Let's say you have a supplements product line. I want to make sure that if anyone gets sick from that line, that they only, they're only suing the product line, right? That LLC, not your YouTube channel, not your technical app, not your courses, you know, not your other things, not your real estate, you know, because I also have clients who have their real estate and all of the same LLC, right?
And so that's kind of step one. Step two is what do your employment and independent contractor agreements look like? Do you have work for hire language that actually says you own the IP that they have created for you?
This is very important for technical creators, you know, for creators who have technical apps. If they have people building code for them, if you don't have that agreement, like that CTO or that senior developer can walk away with the code and say, that's mine. And I had this happen to one of my clients where the CTO walked away with a lot of code and they had to start over and it was terrible.
Because everyone assumes I hired you, I paid you for a service to write this code, and so I own it. And that is not the default way that it works. It works that way if it's in the contracts.
Correct. But otherwise, it's not. So first is corporate structure.
Second is employment, independent contractor, work for hire. Now, there's also another wrinkle in there, which is huge, is do you have hidden misclassification lawsuits in there that the buyer will tear apart because that is something that's huge in the creator economy.
And is this misclassification of employees or? Well, so you will have independent contractors who work for you, but they really are employees because they're working eight hours a day for you, 40 hours a week. They might be abroad or they might be remote.
So you think, well, they're not a full -time employee. I know of creator businesses that have hundreds of independent contractors who should be W -2 employees who are not. Once a buyer comes in and sees that, they will walk away from that deal or reduce the purchase price by 50 % because those are just lawsuits waiting to happen.
And this is, I will share this kind of like very insider information. Here's what happens. Let's say you have an independent contractor who works for you for a couple of years.
They leave and you leave on good terms, right? Then they go file for unemployment. And then the labor commission will say, wait a minute, we've never received any W -2 from you.
Why are you filing for unemployment? Then they come and audit the creator. And that's when they find the hundreds and hundreds of misclassified employees.
And those fines are very expensive. And so that's something that I deal with for a lot of my clients. You know, do you have disgruntled?
I mean, you look at Mr. Beast and his latest lawsuit of that woman, you know, who says that she took a call in the labor room, you know, and was let go when she came back from maternity leave. Those types of gender discrimination, you know, sexual harassment, any of those things, those are heavy, expensive lawsuits that buyers are going to be looking for in due diligence.
Right. Clean chain of title. every video you've made, you actually own the music, the B -rolls is, I mean, reaction channels are worthless.
Like if you have a big reaction channel, no buyer will touch that because you don't own any of those videos, right? You could have hundreds of millions of views per video, but no one will touch that reaction. I mean, my one advice to anyone who's watching, you know, is if you have a reaction channel, seriously reconsider it.
Or do it the right way. Go to the small creator that you're reacting to and ask, either ask for their permission, co -collaborate with them on YouTube or pay them $50, you know, or whatever minimal amount to get their rights to that video. Because I'm seeing IP trolls coming out of the woodworks, attacking big creators.
Because you know what they do is they, the IP trolls, let's say you're a big creator and you have a compilation video with like 50. you know, TikTok's in there. What the IP trolls will do is they will go to the 50 individual ones and buy the clips.
And then they go, and then they go to the big creators. Because it actually probably only cost a couple hundred dollars per clip or something like that. Or less, right?
And, or they even say, or they're even trickier and they're like, oh, we are a clearing house, a licensing house. Give us the clips and we will sell them out, you know, and license it to studios. So then they go back to the big creator and say, Pay me six figures where I will take your channel down and I've had to step into some of those deals and negotiate with them because YouTube actually says now we don't help big creators with copyright strikes because It's a it's a legal issue that they cannot help with it They're not gonna get in the middle of because YouTube probably gets millions of copyright strikes a day And they just can't step into it.
They used to. I heard in the past four or five years ago, you know, the big YouTubers would get help from YouTube, but now they don't do it anymore. Okay, so that's a whole bunch of things on the negative side, right, that you go through and clean up.
Anyone who's listening who's like, wait, I've got 100 ,000 subscribers or, you know, I just earned $100 ,000 a year in revenue. Wait, I can actually start to fix this now. Oh, yeah.
I mean, it's much easier to fix it sort of earlier on than to try to do it, you know. backwards to to try to capture maybe the hundreds of you know independent contractors or editors or people or or b -roll clips that you've used or music clips that you've used and and i think most creators are savvy enough now they use you know like epidemic sound or you know different companies like that and so i think music at least they understand b -roll b -roll is tricky right because people will pull movie clips right into their and they think it's fine And I think in general, it's fine.
You know, the advice I give to creators is if your use is positive or neutral, it's probably fine. It's only when you go really derogatory or you take or you say this is a terrible, you know, piece of film, then maybe the studios will come after you and say, well, I didn't give you a license or permission to use this. Right.
OK, so what should people do? on the positive side. Let's go maybe less on the IP and legal side and more on the business side.
If we have this channel, we have all this attention, what do we direct it towards in order to build real enterprise value? So I think for a lot of creators and, you know, I say YouTube a lot because that's where most of my clients are. You know, the ones making long form content are the ones creating media and real businesses.
Sorry for the ones who are watching who might have short form content. It's just like it's not quite there. I mean, I think short form content, you can make good living on the brand deal side, but there's less sort of enterprise value.
You know, you can't license your content to Netflix or Tubi. You know, you can't really. become a production company in that way.
So I think on the YouTube side, your first two revenue streams are AdSense and brand deals. And you should have those. Those are your kind of your foundations.
We've talked about, you know, could you do brand placements in newsletters? What about a community? What about some type of course?
You know, a lot of my clients tend to be educational or professional channels. So they have some type of wisdom or knowledge to impart to their audience. Right.
And then the actual revenue streams that can come from having a physical product. You know, I know the biggest ones that people talk about are like Feastable and Prime and Emma Chamberlain Coffee. Now, I think consumables are have very small margins.
It's not a great, you know, you have to just sell a lot. Right. Like Mr.
Beast does sell. millions upon millions of units of Feastables. And that's how he makes money.
But I think, you know, having digital products, I think having different types of physical products, technical products, that's where we see really high multiples. You know, those are the 10 or 20 X multiples that we're seeing because. Buyers love recurring revenue, right?
It's a SaaS product. You build it once, you can sell it to 10 million people. And it's like, what's your monthly revenue?
They look at churn, but it's the easiest, I think, product to make for creators, especially with Lovable and Cloud. You can go make a lot of apps on your own now. And you have the distribution.
So what's becoming the harder part, it used to be that building software was very hard. Right. And now building software is...
quite easy relatively. Now building it in a way that scales and is secure and all of that. You do need to bring a CTO in, okay?
For all of the kind of like the vibe coders out there who are like, oh my God, I have this great product. I actually have three clients right now who all have told me the same thing. And I have another client who's a senior developer who is offering fractional CTO services.
So she's coming in actually auditing these apps and saying, okay, actually, do you have a viable? or do you think it's pretty right now? Because that's different, right?
When you put it out into the marketplace and then you're actually getting customers to use it, that's different. Yeah, so having that checked by someone who's a professional and building a team behind it is really important. But I think the advantage swings even more in the favor of creators now because they have distribution and they have brand.
So before, if it was like, maybe 50 50 like distribution brand and software now the the software has become substantially easier and the distribution brand is you know still just as effective as ever and and i think it's really exciting because and and so a lot of creators will say to me well like what product should i launch like i don't know and i and this is my favorite strategy ask your audience You know, what products do you love?
What is a pain point that you're struggling with right now that maybe we could solve together? One of my clients is called a life engineer. You know, he has a small channel.
I mean, small. Okay, 200 ,000, right? In the scale that you're working with.
Some of my clients have 10 or 100 million, right? But it's a great, very niche audience, right? channel is about is so he was a level seven engineer at amazon do you know this channel have you heard okay so he was he started this channel while he was working at amazon Amazon knew and, you know, they were fine with it.
And his product wasn't competing with anything he did in his day -to -day was he was teaching engineers soft skills on how to do well on interviews, how to do well on their, you know, 360 reviews within the company so that they could get to the next level engineer, because that's a hundred thousand usually, you know, every time you elevate a level.
So then he, he launched a course that taught people how to do it. And We launched his course two times and made over 400 ,000.
And he was like, if I'm doing this part time, I wonder what I could be making full time. And so he quit his job last year, did it full time. And what's really cool about that is he asked his audience, like, what is your pain point?
Right. And for a lot of them, they said, well, I always do terribly on my internal reviews. You know, like, I don't know how to promote myself.
I don't know how to remember. what I did well. And he actually has this great idea called a brag binder, right?
Every time we do something well, like print out the email and just like put it in this binder. Cause you know, we forget as time goes on. And then at the end of the year, show it to your supervisor and say like, these are all the things I've done this year.
You probably don't know that because you're not in the, my day to day. And that's really smart. So there are very tactical things that he was helping his audience solve.
They had a pain point. So I think. you know, pull your audience and say like, what product would you need?
You know, a lot of photographers do this really well. You know, they create certain pieces of equipment that is like that they needed for themselves. And so then, of course, other photographers need it.
I think there's really a way to involve your audience because when you involve them, they feel a sense of ownership, right? There's this creator called May Pham who has a hoodie. It sounds really simple, but she's really smart.
You know, she does an exclusive launch every three to four months. It's that single design. When it sells out, it sells out.
She never repeats it. So like people go crazy. Like, you know, she puts out a password that you have to enter.
And I know this because I actually have bought her hoodies and I buy a lot of creator led products just to see how they are. And it was, Nathan, it's like. The best hoodie I've ever owned.
And it's like $140. Yeah. It's really soft.
There's like an individual like, you know, message in there. Things like what you're what you seek is within, you know, it's very Zen like. But what she's really smart in doing is she brings her audience in every step of the way from design.
You know, she shows them the design. She has them vote on it. She takes them to the factory.
She shows them like when when the products go wrong, you know, when the stitching is wrong. So she's so by the time the product comes out, like the audience is so, you know, invested in this product. They're like, we need to have it because we helped her design it.
We helped her, you know. produce this product. And I think that's really smart.
And she makes millions of dollars a year, by the way, selling these hoodies. I think one of the best things is when creators introduce artificial scarcity and it can even be real scarcity at first, right? Cause you're like, I don't know, are people going to buy a thousand of these 10 ,000?
Let's, let's do 2000 to play it safe. And the audience is like, are you kidding? We'll buy 2000 and 12 seconds, you know, but you end up in this place where if you deliberately say sell 50 % of the demand that you had or you, you know, cap supply at 50%, then you stay on this train of like people always wanting more.
And so there was a, when one of my kids, this is years ago now, was a baby, there was a baby carrier that was made by a small company and they only had so many of them. And so they kept selling out. Was it the one on the hip?
Yeah. I love that one. You can do it as a front carrier or all of that.
Yeah. And it, it was an excellent carrier. People loved it and all that.
But instead of figuring out, okay, how do we scale supply 10X to be able to fulfill all the demand? They said, wait a second, this is a feature, not a bug. And so what they said is every Thursday at 11 a .m.
Eastern, we will post all the inventory that we have in our Facebook group. And then whoever gets one gets one. And then the rest of the time, you know, maybe there's some used ones selling.
And they just continually got more and more demand. And people were like, wait, how did you get one? It's like, well, I was in the Facebook group at 11 a .m.
Eastern and I bought it immediately. The exclusivity is so smart. It's just human psychology.
Because if you're told you can't have it, you're like, well, I need it. Right. Right.
And so. You know, I'm actually launching a creator exit accelerator soon, and I'm capping it at 10 spots because I think that's how you give people the right attention. But when people hear 10 spots, like I already have a few signed up.
They're like, well, I want my place in that 10 spots. So I'm not trying to create scarcity because I have to do actual audits with them, you know, one on one. So like over time.
Yeah. And over eight weeks, like I can only do so many. So.
Humans are interesting because if you tell them, well, you can't have it, they're like, oh, no, I need it. Right. So there's definitely some strategy that we're, you know, I think imparting to your audience that think about a pain point that you can solve and then be realistic about how many, you know, items, you know, how many units you can launch.
Because so this is another part, you know, a lot of my clients come to me and say, well, I want to launch a physical product. And I say, OK, well, it'll probably cost 10 ,000. dollars you know to do this first initial launch that's not a small amount of money you know that's an investment so perhaps that first launch is 500 you know units or a thousand units and it's a test you know and and so i think a lot of the times that the launch is small and so then there is a sense of scarcity right and maybe that's what happened with mayfam is she just launched 500 at a time and just it sold out so quickly that she just kept it you know sort of small but that's also how you really keep a check on quality.
And, you know, I think our audiences have been burned by, you know, bad creator led products where they just slap their name on it and they're not really checking quality. So I think the audience, you know, our audiences are very hyper sensitive about like, oh, are you putting a good quality product out into the market or are you just trying to make money off of us?
Yeah. Something else I've seen make a big difference. in the quality of the company is if you're selling either a recurring product or a repeat purchase.
And so if you're thinking about, you mentioned software, it's obviously a recurring purchase. There's plenty of subscriptions. I think about there's an author and creator named Sahil Bloom who launched his Wild Roman product.
It's not true recurring, but if it's a skincare line. You're like, if you like it, it's a repeat purchase. And then actually they'll get you on a subscription.
So that is the best model, right? So if a buyer is looking at your business, and I like to say like the gold standard is Mark Rober's Crunch Lab subscription boxes, right? We get it every month.
Right. Is it every month or every three months? Because I think in the beginning it was every three months.
Is it every month now? My six -year -old puts together a Crunch Labs box every single month. Does he?
And he could not be more excited. Okay. I have a seven -year -old I need to get that for.
So I don't let my kids watch YouTube, but the only channel he's allowed to watch is Mark Rober because I know that's safe, right? Our kids, it's Mark Rober, Chef Nick, and Dude Perfect. Those are the three channels.
So ours is Mark Rober and Cleo Abrams a little bit. We just introduced Cleo to him and he really loves her. I'm actually about to go speak at Open Sauce in July.
And I told my son, I said, you know, the speakers have been invited to Mark Rober's Crunch Labs. And he was like, I need to go. And so I think I might be bringing him.
But that's the sort of like intense love and loyalty, right? That Mark Rober, who I know has probably 50 or 100 people in his R &D lab, right? Who are thinking of those ideas, who are able to get those, customers to come back month after month.
And that's really important for a buyer, like a private equity fund. They're looking at what is revenue that will keep occurring every month for us versus, you know, sort of a launch driven. The best case scenario is that you have a brand that can be more than that person, right?
They don't show up to make a video that's still working. And that brand is promoting a product that will be purchased over and over again. even if the creator doesn't show up or a video isn't made.
And so then probably the worst case scenario is the one -off launch -driven, entirely tied to the creator identity. Is that kind of two ends of the spectrum? I think so.
And there's also an importance of naming your products, right? I think... I don't know.
You get them every month. Is Mark Rober's name on the Crunchbox, the Crunch Labs? I think it's Crunch Lab is the brand.
That's the brand of the company. They have their own YouTube channels for Crunch Labs. It might say by Mark Rober.
Okay. But I. I feel like as I watch from a distance, you're like, oh, I see what's happening here.
It's not like we're trying to remove Mark or hide him from it, but you're like, oh, this is its own thing. Yes, because we want it to be its own thing. You know, my client has, you know, Caleb Hammer has a budgeting app.
It's called Dollar Wise. It's a standalone name, right? Like we don't, it's, we specifically, when I was doing the trademark and naming it, we were like, we don't want Caleb Hammer in there.
Right. And so. That's what buyers want is they want something that can be standalone that doesn't depend on this YouTuber wanting to make videos or not.
And, you know, we talked about the key man risk a little bit. So let's tease it out a little bit more is, you know, when when private equity funds are looking to buy these these creator led businesses, the requirement is that the YouTubers and I know Veritasium and MatPat both did this. They stayed on for two to three years to kind of have have more of a smooth transition.
They're there when they hire sort of co -hosts, you know, to kind of wean the audience and teach the audience. So here are the new hosts, you know, here are the new faces of the channel. Ideally, the business is so independent, right?
It has a full team, executives who are running the company without. the creator right who could allow this creator to leave after 12 months or 24 months and the business would still run really well i have a five pillar um framework for what's really sustainable in a business and one of those pillars is the team like who do you who's your team you know my favorite phrase i like to say right now is i can raise capital all day long but the hardest capital to raise for creators is human capital right like hiring the right people Bringing in great operators who can run with things on their own, that's really hard.
I mean, I think one thing Mr. Beast is doing really well is the churn is very high at his company. So it's like, you know, we're getting, you know, there's a big pool of people now that we can pull from, you know, leaving Mr.
Beast. And so they're going to all the different companies now. I mean, Cody Sanchez's president was Jimmy's president.
So it's like as time goes on, like we'll get more adults in the room, for lack of a better word. Now, there are all a lot of people in corporate America or traditional Hollywood who also want to get into this space. who are coming in.
You look at Dhar Mann's president, Sean. He was at Discovery. So I think there are a lot of people who are interested in...
supportive of creators who are saying, I'd like to come help you build. And that I think is the best scenario is if we can get really experts who've been doing this for 20 years, who can come in and really help you guide that. I mean, I worked in Hollywood for 20 years at the big studios.
And so I feel that I have sort of the expertise, but I have a deep love of creators. I started my own YouTube channel three years ago because I had a midlife crisis. I just fell in love with my fellow creators and realized so many of them get taken advantage of.
You know, you see these brand deals or these contracts that get presented to creators that you would never see in Hollywood or in corporate America, you know, owning their name and likeness or their formats in perpetuity. But you have young creators who are like, oh my God, someone wants to pay me $5 ,000 for a video. That's insane, right?
Here, I'll sign whatever you want. And that's a problem. There's all kinds of details in there that they should never sign.
Sure. Yeah. Going back to Crunch Labs, because I do think that's the best example of a creator business done really, really well.
Like the IP is totally unique. It has its own brand. The fit, like the creator product fit is...
Perfect. You know, like, cause sometimes you see these products where a critter comes out with that and you're like, okay, anyone that's cool. I think that'll work.
But anyone, any one of these like 50 people could have made that product. Are there other ones that are at the top of your list where you're like, okay, this was done really well, or this has the potential. Maybe it's still early on, but has the potential to be.
Really big. You know, I did a video about this. So there's this creator called Amanda Rach Lee.
She's a bullet journal creator. She's been making content on YouTube for over 10 years. She started when she was like 10.
And then I think during COVID, when she was like 19 or 20, people asked her, you know, why don't you launch a bullet journal of your own? And I think for her, there was a hesitation because it's like. It's a blank journal.
Right. But she ended up putting her own designs in there. I think each month she did a design for each one.
She sold. So it was $50. I know because I bought one.
And, you know, creators are very transparent. So during that first day when she had the launch, she was showing how many units are being sold. Nathan, I think she sold a million units that first day.
Right. That's $50 million. Yeah.
But that was a great fit, right? For 10 years, she had been doing journaling, writing, like there was no better product for her to make than a bullet journal. And so now she has a whole line of like pens and stickers and everything around that ecosystem.
Another creator, Caroline Gervon is a fitness creator for years. So her story was great. So she was a CPA in Ireland and during COVID, because everybody was locked down, she's very fit.
She's like, I'm just going to do videos at home and I'm going to have you guys come along with me. She never did a brand deal.
She never made any money. And then I think three years later, she disappeared for six months and people were like, oh my God, where did she go? Like, did she go have a baby?
Did she quit YouTube? And I was like, I bet she's building a fitness app. And sure enough, six months later, she launches fitness app.
It was like $20 a month or $99 for the year. I bought one because I wanted to support her. And on the bottom, you know, it showed how many members she had.
And it was something like 5 ,000, you know, so if you times 5 ,000 times 100, you know, like what is that half a million that she made on that first day? Yeah. And she has stopped making YouTube videos.
Now that I think is amazing because she has, she used, you know, YouTube as sort of a launch pad to go and build on her own land because that app is hers. No one will ever take that away from her. YouTube can't kick her off.
She can do whatever she wants over there. And that is what I really want creators to do is to build on their own land, have their own email list, newsletter, you know, building on different platforms. I mean, there are ones like there's YouScreen, there's Top Fan, you know, there are ways for you to just be on your own land where you don't even really have to be on YouTube anymore.
I mean, you should still be on YouTube because YouTube gives you AdSense. And if you're, if you have the audience there already, you should just diverse all of your revenue streams. I want to get into the, how the AdSense is valued in the back catalog and all of that in a moment.
But I had a creator on Ben Greenfield, who is big in the fitness space. And he was telling me how much he has separated his whole Ben Greenfield brand from Keon, which is a supplements brand. Like early on, he used.
The Ben Greenfield brand and, you know, like a top 10 health podcast and all of this to launch Keon and grow to a meaningful scale. But then he's been very, very deliberate to keep it separate. Actually, I didn't even know those were connected.
I know them separately, but I actually didn't know. So he's the founder, majority owner. He has a team and all of that.
But he said he's just watched so many people see where, you know, either through an acquisition or like a deal goes south. Or actually an example of this that I was talking to someone else about recently is Mark Sisson with Primal Kitchen. Yeah.
Right. Like textbook, perfect exit. Incredibly well done.
I think it was a $200 million exit to craft in what, 2017 or something. Like it was a while ago. Okay.
But one thing I didn't realize is that craft. Through that, because it was so intertangled, Kraft owns all of Mark Sisson's, the whole blog, the Mark's Daily Apple blog had to be acquired through that. And they ultimately ended up shutting, Kraft looks at it and they go, we don't know what content is in here and all that.
Let's just shut it down. Oh, well, that's heartbreaking. Because it wasn't untangled and wasn't able to be untangled or wasn't worth it to, you know, a many, many billion dollar company.
Then the creator is stuck in this position of like, hey, but I want my decade worth of content. Well, did he try buying it back? I'm not sure in that case.
Okay. So this is a great sort of segue that I want to highlight. You know, Nathan, when a lot of creators come to me and say, I want an exit or I want an investor.
And I will say, why? And they're like. because I want free cash, right?
Because they think it's free cash. And I say, okay, but realize when you bring in an investor or a buyer that, you know, you might've started this channel in your bedroom as a teenager and you've never worked in corporate America, you've never had a boss, but that's what an investor or a buyer is, right? They're coming in and telling you how to run your channel, how to make your content, what products to do, what brand deals to take.
It's a very, very... sobering and it's a wake, you know, it's, it's, it's not something I think creators think about. And then once I tell them that, and I'm like, you're making a million, $2 million on your own.
You could make 5 million. If we, if we set those up properly, do you need to exit? You know, do you need to sell it?
Because there are these stories, right? Where they sell and then the channel or the business is. destroyed, right.
Or, or, or taken apart. You know, this is one of the bad, you know, nightmare scenario with private equity funds. You know, I think, I don't know if you, if you remember this in pretty woman, like Richard Gere was a private equity fund guy and his job was to tear companies apart.
You know, I think that they were, he was trying to acquire this company and the son was sort of like, you're going to tear my company apart. And I think a lot of creators and startup founders don't realize that sometimes this can happen, right?
This brand or this audience you've built maybe doesn't stay the same anymore. Now, there are things you can do if you're willing to stay on and give it a better transition. This is why I think having a good lawyer on your side is very important, right?
You can structure what that next phase of your business looks like. If you're just getting a check and walking away, like, It could very well like, you know, Mark Marks, you know, with Primal Kitchen, like that could be the cautionary tale.
Yeah. And it might be in that case that you're totally fine with it because you're ready to move on. And then it was for two hundred million dollars or it could be like, hey, can I have this this side thing that doesn't mean anything to you, but means a lot to me.
Something that I've seen is. People buying back their companies. And so Catherine Lavery sold her company Best Self, which was a journal and like conversation cards company.
They had won one of the Shopify build a business challenges years ago with like Tim Ferriss and Tony Robbins and all that. And built a really meaningful company, sold it to private equity. And then two years later, three years later, bought it back for the price of the inventory that was in the warehouse.
So I got this crazy deal to buy it back. Is it because they kind of let it die? Yeah.
Okay. Okay. You know, you got professional managers who came in and said, we know better.
Yeah. All of this. Sure.
And then they inflated salary costs. And, um, turns out the scrappy creator led business was run pretty well. Yeah.
The other one is JD Roth who wrote the blog, get rich slowly. Okay. And he actually did something similar to the Veritasium folks where he, you know, this is probably one of the earliest exits in blogging.
I want to say it was sold in like 2013, maybe. He wrote the blog himself for a long time, gradually brought in other editors, sold it, but didn't tell anyone. And so a full year or more after the sale, he announced like, hey, I actually sold the blog.
People are like, oh, it's going to be terrible now. This is straight garbage, all of this. I knew it would go downhill.
And he's like, I sold it a year ago. And you guys didn't know. And you guys had no idea.
But he ended up being able to buy it back a few years later because. So that's a great point, right? So when I structure an M &A deal, I make sure there's a buyback clause because for this exact reason.
Because sometimes you don't know who you're getting into bed with, right? Who the buyers are. And because it's all like dating, right?
The first few dates are always great, but you have no idea like until a couple of years later, how it's really going to play out. So having that buyback is really important because sometimes there are a lot of private equity funds who buy businesses thinking, right? They could do certain things with it.
And then for whatever reason. maybe they can't, or maybe they're more focused on these other portfolio companies. They just kind of let it languish.
And so the creator might go and, you know, travel the world for a year or two and be like, wait, I really miss my company, right? I miss, you know, my audience. So, you know, having that buyback where you might lose a little bit of money or not, you know, like your example about the inventory was a great one.
Maybe all that creator needed was to take some time off. Do you know what I mean? Like maybe because so many creators - You didn't need an exit, you needed a sabbatical.
Like we hit burnout and we think, well, I can't make videos anymore. You know, it's just hard when you're on all the time and you're making you have to make content every single day and you feel like you can't take any time off. You know, there's a there's a creator named Vanessa Lau.
Do you know who she is? OK, so she kind of makes content, you know, for creators like to start their YouTube channel or the Instagram. She actually took like a whole year off and her channel definitely took a hit.
And like, you know, like she lost subscribers, but she has come back and she's chronicled that journey. But it was so important for her to take that time off because she had been basically pushing herself for like five years to just make content every single day. And her mental health was just like destroyed.
And she took that year off and now she's come back. It's been really refreshing to see that her audience came back and picked up where she left off. So maybe something creators can take out of this conversation is maybe it's okay to take some time off.
Like maybe you don't need to sell your business. I mean, this isn't something I've said before, but it just came out organically. But maybe you just need to take some time off.
Yeah. And I think knowing that as the creator, you have options and that the exit may be incredible. If you're working towards that, great.
Or it might be, you know, designing a business to keep for a long time. Something that I focus on when I'm building kit is to build a business that's set up in such a way so that it'd be really desirable to purchase. Because investors want the same, like investors want to buy really good businesses.
Yeah. So if you look at what do they value, recurring revenue, a great team in place, a great brand, not a lot of key man risk, you know, all of these things. If you have all of that in place and you're like, oh, I have a perfect business to sell.
guess what you also have the perfect business to keep yeah to operate and so you know that's the position that i've been in is having acquisition offers and being like okay that's amazing what would you be looking for to make this business better and they're like oh well you have to fix x y and z and i'm like great thanks i'm just gonna go fix those things because that outside perspective oh nice and then you have a business that okay so you use the due diligence like you know to sort of benefit yourself then i love that i've used it once for that okay yeah Because, you know, the one thing I want to caution creators about is let's say you have a buyer come come to the table and say, we want to buy your business.
The creator is super excited, right? Because maybe it's 10, 20, 30 million dollars. But what you don't realize is maybe this buyer who's probably a competitor to you just wants to look at your tech stack and like know your code and know like your vendors.
And so one of the cautionary tales I have is. Please, like if a buyer says, hey, just give us a raw files, like we'll just we'll just analyze it ourselves. Please don't do that.
Please have an attorney. I know I'm sort of like a broken record, but especially with an exit, like please have an attorney guide you. Please have a really strong NDA in place, you know, that has residuals protection.
It has, you know, a non solicitation, non circumvent trade secret protection because. you don't want that because some buyers will come to the table and say this is a buy or build situation meaning we're going to take a look at your product, see if we want to buy it.
And if we don't, we're just going to go build it ourselves. Like they're very honest about it. I'm actually like very surprised.
So you have to be so careful that you're not showing them your, your tech stack. You're not showing them your vendor list. You're not showing them the code for sure.
The thing that I would be most curious about. So if I was coming into a choir company, cause you're talking about like giving me all the raw files. What I would most want is I want the cohort retention data for your customer base by segment.
Yes. So if I have that, I know, oh, from for this product, if someone comes to the YouTube channel, they stay on average for 12 months or, you know, any of those things like that is insanely valuable data. Totally.
And so you're exactly right. People are like, well, they want to pay me $10 million potentially. So here you go.
And it was like, you just gave away something that's so valuable. And that person might say like, great, now we're going to. AI code our own competitor for it or whatever else.
But thank you for letting us know that this particular segment of customers is twice as valuable as that segment. Exactly. Most creators just aren't thinking about it.
They're just heads down, you know, making a product. They're not really business minded, right? Because they're not thinking about like, well, you know, I had one client come in and say, I think we could probably exit at four to eight million dollars.
And then I ran, you know, the projections and the models. And I looked at the multiples of, you know, I did the comparisons against, you know, kind of recent exits in the last 18 months. And I was like, I think we're closer to a 10 to 20 X here.
So we're probably in the 30 to $40 million range. And they were just blown away. They still don't believe me, but I think that's the range we'll end at.
And this is why it's nice to bring in. you know, experts and advisors to tell you, no, you're wrong because they think like, well, I'm only making one or $2 million in revenue a year, but like, you're not realizing what the multiples are and what the market is and what similar, you know, products to you have just exited at.
And that's where, you know, I, I, because I do this so often, I can run those comps for them. And yeah, you've seen inside a lot of businesses. How do you recommend that creators think about cashflow versus enterprise value?
So building for maybe the lifestyle and the savings and investing now versus like, oh, I'm just trying to grow the brand and the revenue as high as possible. Who cares about profit so that I can have this big exit? Do you mean they reinvest everything back into the business?
Yeah, exactly. Well, I find most creators do that, right? They do.
They really do put everything back in there. You know, the issue I'm seeing is a lot of creators are not taking salaries for themselves, which. It's fine, but realize that buyers are going to calculate that in there, right?
Because when they acquire your business and they have to have a replacement CTO or CEO, they're going to have to add in another $200 ,000 to $400 ,000 for that. So you're inflating your numbers by not taking a salary. Someone's going to see through it immediately.
Yeah, like buyers are going to calculate that immediately, right? So your margins are really not as good as you think it is, right? are investing everything back in or you're not taking a salary.
So I think some creators, you know, founders get caught up in that and they're like, and it's fine. And I've said this to my clients. They're like, well, should we keep some cash, you know, on the side or should we be putting it back into the business?
And I say, I think it's fine to put it back into the business because the buyers will understand that. But hopefully you are taking some money for yourself because you got to like, you know, like not just kill yourself. Like because there is because that's how burnout happens.
Right. You're not taking care of yourselves. I mean, I think as founders, we really have to understand that we can only push for so long.
Right. Before we burn out. And if you burn out, that's when you get to that kind of desperate point of like, oh, I have to sell my business or I have to exit.
Whereas if you maybe were a little slower with your growth. Here's an example. I have a client who came to me six months ago saying, OK, I know we're approaching burnout.
We hear everything you talk about on your LinkedIn or your YouTube. So we want to diversify and launch a product. So we came up with a great product.
It was actually sort of like a Crunch Lab subscription box, like house hacks. So they went away and they were like, okay, we're going to work on it. And I think three or four months later we talked again and I was like, how's the box going?
And they're like, we have to put out five short videos a day. We don't have time.
foregoing, right, their future self for this kind of immediate, instant gratification. And the thing is with a lot of creators, they're addicted to this dopamine hit of like getting the high views, right? Getting the AdSense.
So it's like, it's hard to wean them off of that hamster wheel of saying, well, but if you had a product line, right? Like a physical product or a technical product, like that can make up for some of your AdSense, right? Like maybe you don't need to put out so many videos because you're actually making money over here.
But that's the sort of get dopamine, you know, like reduction that I don't, I don't know how to solve it. Right. Actually, I do know how to solve it.
Here's the solve. You just have to hire an operator to come launch that product for you. Right.
You have to hire maybe it's a fractional CEO, which, you know, I have access to or you hire a company that does that. You know, one of my clients is Whaler and they actually have this. company within their umbrella called Moby Ventures.
So Moby actually launches physical products for creators. Nami Macho, which was from your mom, Ashley, I don't know if you've heard. Okay.
So that's from Moby, right? And, and, and Ashley just lets them, you know, launch it and ship it and, and, and take care of all the customer service for her. So all she has to do is take, you know, do the marketing, right.
And do the videos for it. Yeah. I think seeing those different examples, is really helpful because then creators can say, oh, that's what I want.
Do I want to be totally in it on R &D and the whole process? And I love operations. And so maybe I'll bring the camera behind the scenes and even bring the audience on that journey.
Or others are like, I want nothing to do with that. I want to make the videos and I want someone else to run the entire company. And it's very different ways of operating.
I think it's usually the latter. I think they love... making the videos they love interacting with their audience i don't think they want to be packaging and shipping boxes right and i i don't want to be doing that but you know i i think now but the r &d part maybe they want to be involved in that and i think there are uh third party you know vendors and and operators out there who can do it i i know fourth wall does some sort of that right and so there are companies now Creators will say, well, I don't want to give up that revenue.
And I said, well, but you'll be making 80 % of money that you wouldn't have been making in the first place. It's no different than what you pay to your managers for your brand deals, right? You wouldn't have gotten the brand deals on your own.
So 80 % is better than nothing, right? And so they do get caught up in that a little bit too. Yeah, for sure.
One way that I was thinking about the enterprise value versus cash flow. is really looking at the creator business and seeing, do you have something that is an acquirable asset? Because you were talking about the dopamine hits or the treadmill of the five reels a day or a week or whatever.
Sure. And those all may be bringing in short -term money, but the moment that YouTube audience disappears or the moment you stop making them, it's gone. Or the algorithm changes.
The algorithm changes. Yep. And so all of that is you have to take the...
day -to -day revenue or the monthly revenue that you're getting and either you like invest it back in the business to make a product you know like your subscription box or whatever else that's going to have enterprise value or you need to take a chunk of it out of the business and go put it in the S &P 500 you know sure and just say look I don't have enterprise value that I'm building in this business but I have great cash flow and so 30 % of the cash flow is going straight into the stock market.
Yeah. And I have some clients who say, you know, I want to take some cash off the table so I can go buy a house or I can do some investments. And so that's also a good idea is how do you bring in investors?
You know, I like investors.
who are angel investors, right? Bring in people who will give you a hundred thousand dollars. That's a rounding error, you know, for, for, for their cashflow.
Um, maybe bring in 10. I'm actually structuring this for one of my clients right now for his app. Let's bring in 10 or 20 at a hundred thousand each.
And they won't look over your shoulder. They won't like ask you like a private equity fund, like, Hey, how's the business? Show me your monthly revenue.
They just won't care. Right. They just, they just hope that when you sell one day, that that'll be worth something.
And they're probably already a fan of you and your product and they want you to win. And before I wanted you to win and now I have all of those same feelings. Plus I have some upside in it, which is even better.
Yes. Yeah. That's something actually that I did, you know, so kit did not have any outside funding for a very long time.
And in 2021, we had an acquisition offer from Spotify. We turned that down and. That then resulted in a bunch of team members being like, well, hold on.
How do we get liquidity? And so we ran a small secondary transaction. So no primary capital in the business, all secondary.
And it ended up being about $6 million that came in at a $200 million valuation. Nice. And all from founders, people that are friends of mine that I respect, like Dharmesh Shah, the CTO of HubSpot, and people like that.
And we've done another round since then. And in hindsight, I would have done that much sooner. Yeah.
Because having 20 to 40 people who are in your corner and cheering for you, like it matters. Who are advisors to you, by the way. Yeah, and they paid for that.
Yeah, you can call up at any time and say, hey, like, what should I do here? That's so valuable. So I think of like two examples.
One is a gentleman named Noah who runs a software business in a totally different space. But when I have like software problems, I'm talking to him and he's put a couple million dollars into the business and, you know, buying shares from former team members. That's great.
Another one is James Clear, who wrote Atomic Habits, right? I'm so glad we're talking about this because I want to talk about books, right? Because books is big for creators right now.
I'm doing several book deals for creators, but I'm a big fan of James. Tell me what you wanted to say. Yeah, so with James, you know, authors are huge for Kit.
We, at any given time, probably half the New York Times list. It has a kit newsletter. I feel like we have tons of the space.
We dominate the space compared to any of our competitors. But if you were to walk into Barnes & Noble, I've had this experience where I'm like, oh, kit customer, kit customer, as I'm pointing at books. And I'm like feeling, oh, this is great.
We have so many of them. I realize, wait, I can see a thousand books from where I'm standing. And I could point to five, 10 that are kit customers.
Like, okay, we have a tiny fraction of the market. And so having James as a shareholder. you know he's like great how do we get this person on the platform how do we make this happen and it's different than a paid advisor because he actually put his money into the business well i love that i love that that's genius right is having fans and customers you know be on your cap table be advisors to you let's talk a little bit about books.
I, you know, I actually am writing a book right now. Myself is called creator to CEO. Um, and I have an offer from a major publisher.
I haven't taken it. I don't know that I want to go with them because I do have this fantasy because I'm an IP attorney and I say to creators, you should own your IP that I should, you know, hybrid publish. I should self publish, but I also want to be a New York times bestseller.
And I know if you go self publish, you can't, you just can't touch that, right? You have like Alex Hermosi will never be. on the New York Times bestselling list, but he has sold a lot of books, right?
So tell me, I mean, I know you're supposed to interview me, but tell me how creators should be thinking about books. You know, my client Caleb Hammer is writing one right now for Penguin. And I also represent Daryl Eves, you know, who has the YouTube formula, I think.
For myself, at least, I think a book maybe will allow me to reach an audience that maybe might not typically see me from YouTube or LinkedIn. How should creators be thinking about books? Should they all go write one?
I think the books are fantastic because it condenses so much experience that you have into something so attainable for 20 bucks. And then it also transfers a huge amount of credibility.
Every author that I've seen, even if they're big on social media, you know, and all their content, publishing a book, usually with a traditional publisher, puts them into a different category. Sure. I actually just did a podcast episode with James Clear and Madeline McIntosh.
I think it dropped just a couple weeks ago. So it's on the show. So Madeline was the CEO of Penguin Random House US.
Okay. And she left a couple years ago. And started along with James Clear and a few others, Authors' Equity.
Okay. Which is like their dream publisher. Okay.
And so on that episode, they break down exactly why they started it, how it's going, all that. And so I signed with them for my book. Oh.
Which is coming out in December. Oh, congrats. Thanks.
And it's a hybrid model where. As an author, you don't pay anything out of pocket. Okay.
What happens is you make 70 % of all revenue. Wow. Sorry, of all profits on the book.
So that's flipped. And they make 30%, so it's flipped. Right, because for traditional publishers, you only make 30%.
Or less. Yeah. And so what they're doing is basically you split all the expenses 50 -50.
So author's equity will pay for all the costs of cover design, everything else. Okay. And they're very cost -effective with all of it.
And then after that, after those profits, or sorry, once the book is profitable, then you get the revenue split on it, that 70 -30. A lot of people just think about the money, but they don't realize like all the second order effects of that. So for example, author's equity has a better audible deal than you can get on your own.
Oh, interesting. And I actually have a few friends who have self -published audio books that have sold a million copies or more who have switched that. to then sign through author's equity because they're making more per copy.
But then another thing is no one really can make Amazon ads profitable for books. Because if you think about it, if I as the author am making $3 per hardcover and I'm trying to get someone to make a $20 purchase on Amazon to buy the book, I can't get a return on ad spend that's enough for that $3 to cover the $20. That's never going to happen, so people don't do it.
Authors' Equity has a different model where they will put up all the money for the ad spend. Interesting. They will take it out of the expenses for the book.
Okay. And then, you know, because $20 came in, you had maybe three in actual hard costs, printing costs. So then of that 17, like you can actually probably get to a positive return on ad spend.
Wow. And then the profits, maybe there's only $2 in profit all the way at the end for that book. And as the author, you're making 70 % of that, and it's not very much.
But guess what? You just got the book in the hands of readers, and you got paid to do that. Whereas Penguin or Hachette or whoever, they're never going to become super sophisticated with ad spend.
So with author's equity, are they able to go into Barnes & Noble? Yes. And so you can get on the best -selling list.
And a good example would be Joseph Nguyen wrote the book Don't Believe Everything You Think. And he self -published, sold over a million copies. Okay.
And never hit the New York Times list. Sure. He should have dominated the New York Times.
Yeah. But he's self -published, so he's never going to make it on. So he republished the book with author's equity and then spent like 25 weeks on the New York Times list.
Wow. And he was able to use all of his marketing savvy. Like he's a genius when it comes to book talk and TikTok shop and, you know, all of that to get the book in the right people's hands.
And he actually trained the author's equity team on how to use all of his methods. Amazing. And so, yeah, he was able to, you know, hit the New York Times list and do everything in that way.
Can I get an introduction to author's equity? I will introduce you to Madeline and James. I would love to talk to them.
What is your book called? Yeah, it's called The Ladders of Wealth. Okay.
How to Master the Skill of Making Money. Wow. Comes out December 8th.
Amazing. And is it, does it have sort of a creator focused or no? It's like an entrepreneurship focus.
Creator is part of that. In the ladders, I talk about how every, as you move, it's basically a framework for how you earn more money, build wealth over time. And as you move between the ladders, an audience is the most valuable thing you could have in that.
This is your like trying to launch a new product, trying to go in a new direction. It's a whole other thing. So yeah, audience is a chunk of that.
What is your goal for your book? This might be helpful for all of creators to think about. For me, you know, actually the one goal is like if I can get more speaking.
Yeah. If I can speak to corporate companies or traditional Hollywood studios, I think, you know, there is a desire for that. But I think that that gives you a sense of, you know, credibility and expertise.
Right. What is your goal for your book? Yeah.
The biggest top level goal is I'm trying to write the roadmap that I wish I had as a kid. Okay. Right.
Where, you know, 14 year old me who's like, okay, how do I, how does even the whole world work? I'm trying to, to map it out and be like, this isn't a, it isn't luck. You know, like there is an actual concrete steps you can take.
And I want to get that message to as many people as possible. So it's kind of a crazy thing, but I want to sell a million copies of this book. Okay.
Or I actually don't even care about selling a million copies. I care about getting in the hands of a million readers. And then if we, Like everything has to tie back into business in some way.
Okay. And so I think about the opportunities to grow and promote kit are packaged in a way that don't, it doesn't lend itself to media or podcast tours or things like that. Like getting the message out in front of more people.
It's like if you were to try to go on, you know, Good Morning America and you're like, I have a software company. And they'd be like, oh, okay. We don't care.
But if you're like, I have a book coming out and it's about this. And they're like, okay, great. It's packaged in a way to get the message out there.
And it's a much more approachable thing for someone to come into my world. And so I want the book to do that for Kit. Because Kit's a big business.
We have over 100 ,000 active creators on the platform and all of that. But we still, we just have the tiniest bit of the market right now. And so it could be way bigger.
And I think that. the right book will help get kit in front of a lot of new audiences. Yeah.
That's super cool. How long did it take for you to write it? It's somewhere between two years and 12 years, depending on how you count.
Okay. I'm trying to write this thing in six months. So I think it's doable.
I think what I would say on writing a book is write every single day. Okay. No matter what.
I only finally made progress when I. Really? When I did that.
Give me some tangible, like an hour a day or like what finally made it work for you? I would say like any amount. Okay.
You could say 20 minutes. Okay. Right?
Because you could always find time for 20 minutes. Okay. I think just that relentless progress is really important.
Finding a really good editor makes a big difference. Do they help with that? Yeah.
So actually Authors Equity hired the first editor. The way that it works is. In traditional publishing, the editor who acquires the book also often helps you develop the concept and all of that.
Author's Equity has split those. And so they say, we love this book. And Author's Equity only publishes, I think, like 20 books a year.
So they don't do a lot. And they have to really believe in the book and the marketing behind it because they're taking a big risk on it. But then what they do is...
they hire like a developmental editor to work with you. Okay. And so having those calls every week, you know, accountability turns out.
Yeah, yeah. When someone's going to ask you, hey, how far did you get this week, right? You said you'd finish these two chapters, did you?
And you're like, so often for me, it'd be like the night before or the day before, I'd be like, oh, I'm going to call with Zach tomorrow. And he's going to very nicely ask, did you do what you said you were going to do? And I'm going to be like, no.
I need that. I need a deadline because, because I, you know, I have, I have my law firm. I have my creator arc M &A.
I have, you know, all of these things. I'm also trying to make content like the book just in my two kids. So the book always like just slips through the cracks.
So if I have no one sort of like holding me accountable or keeping me on track, I think it's really hard. It was the biggest thing for me. Like I only made progress when I put it as the number one thing where I said at least 20 minutes of time writing the book.
Like that's a non -negotiable for the day. And it sounds terrible, but I was like, okay, that's more important than time with my kids or working on a kit or all that. The truth is none of those things ended up like - Suffering, right?
It's just the mental game. It was just, what did you put first? And then I was like, oh, well, I can actually make sure I get the 20 minutes of writing in before anyone wakes up or before whatever else.
And often that would be an hour or more. But that consistent progress. Thank you.
That's helpful. I'm going to do that. I like it.
Okay, the last question I wanted to ask about on the acquisition side is you see the back catalog in music be really important. Yes. You know, with Justin Bieber and everybody else selling their masters, selling their catalogs.
Does that matter in YouTube? Or is it really people are looking at, like, what is the channel doing today? Well, I think there's certainly that that can be one revenue stream, right?
I think a lot of I'm putting my clients, you know, catalogs on Tubi or, you know, Netflix. I actually was at Netflix last week and I met with the executive who did Mark Rober and Jordan Madder's deal. For Jordan Matters, I love to share this story.
So I was speaking in this group of creator experts and Jordan came and spoke. I spoke first and then Jordan spoke after me and he was kind of sharing about his daughter, Silas's skincare line, right? Do you know that story?
We actually got to hang out with Jordan in Dubai a few months ago. So he was lovely. So just the 40 ,000 kids who showed up for her product launch, her makeup line, So what's so great about their overall deal at Netflix is, you know, it's a moment in time, right?
It's where a big streamer, a studio says, okay, YouTubers are clearly important. We need to get them on our platform. And I asked Heather, I said, well, why is it important, you know, to have YouTubers on Netflix?
And she said something that was really clarifying was she said a lot of. Parents don't allow their kids to watch YouTube. Right.
Right. I don't allow my son. But they will let them watch it on Netflix.
Right. Because it's safe. Right.
Because they do curate what is on there. They make sure it's nothing, especially if it's under the parental kids channel. Yep.
So Jordan Matters, they took 10 of their videos and put it YouTube videos right on a catalog. That show. became like number three or four in all of Netflix.
Not just in kids, but all of Netflix. And I was like, what is that about? And she said, it's just wholesome content.
You know, it's a relationship between a father and daughter. It's, you know, it's her navigating her teenage years with her friends. You know, she's very brand safe.
And it introduces a whole audience, right, who has never heard of them because they're not on YouTube. To go back to your point of like YouTubers who have back catalogs who are brand safe, like could be selling these, you know, catalogs to a Netflix, to a Tubi, Amazon, Hulu, Disney, because they all need content right now.
Right. Because this is free content, basically, that they didn't have to green light or pay, you know, a budget towards. And Tubi's doing this in a big way.
Tubi's also doing original content. Netflix is doing original content. What I say to my clients is, think of your back catalog as just additional revenue.
Another thing I like to tell my clients to think about is to have a network of channels. Right. So not just your own channel.
So, you know, let's say one of my clients is a male finance creator. Well, can you have like a female creator, you know, maybe a gay or lesbian creator, you know, like all finance still. Right.
Who will capture different parts of the demographic that you're not capturing. It diversifies, you know, the key man risk. And for a private equity fund or a studio to say, oh, my God, you have 10 channels.
That's. amazing, right? That's a business we would want to acquire.
Well, I think that example is so important. Like any acquirer or, you know, any founder is like, well, I see the potential. I could go, go and do these things.
Once this is so successful, I can go and start those other channels. Yeah. And everyone, you know, the acquirer is like, yeah, hypothetically.
So some friends of mine built a virtual assistant staffing company called Belay and they sold it for, I think mid like a hundred million, between a hundred and 200 million. And something that they did is they realized they'd be going into these conversations and saying like, oh, you can hire a great CEO to replace us. And they're like, wait a second, why make it a hypothetical?
And so they hired a great CEO. They trained them. They did all of that.
Waited 12 months. And that CEO took the company to market and ended up selling it to private equity. For more?
And all that. I think for an amazing acquisition. Everyone was very, very happy with this.
And the owners were just in the background. And so it wasn't like, oh, the private equity folks aren't thinking, could we hire operators who are just as good as the founding team? Or that's when it's like, oh no, there's a team already in place.
And so it's that same thing of like, okay, can you make the leap from one channel? Can you back yourself out of, can you take care of some of these issues beforehand before the acquirer brings it up? I think so.
And some creators are, you know, Jesser is one of my clients and he has several channels, you know, and I think creators to reduce their potential path down to burnout. They are thinking of having smaller, younger creators come in, you know, who have the drive, you know, who have the sort of the fresh eyes on content because they'll be bringing in a new group of audience.
And sometimes. Some of my clients are going to creators who have maybe 10 ,000 or 50 ,000 subscribers already. And then asking to acquire.
So they acquire their channels and then they bring them in as an employee. And then so that channel just becomes part of the network that they have. So I'm doing this with several clients right now, which I think is.
really smart and it's, it's, you know, basically you're, you're becoming your own studio or, or proper network, you know, like an NBC or like an ABC. So, yeah. Yeah.
That makes a lot of sense. Well, we could talk all day about all of this. Um, thank you so much for coming on.
If people want to learn more about what you're doing, follow your channel, all of that, where should they go? So my handle is the creator's attorney and you can find me on YouTube or LinkedIn. I write quite often on LinkedIn.
You know, this moment in time, Nathan, is so cool. Like I just came back from Cannes Film Festival where I brought my client's creator camp. They just announced today, deadline announced that MK2 acquired all Europe rights for their film.
Do you know about this film, Two Sleepy People? I don't know about it. So they made a film, $100 ,000.
over a hundred days. They gave themselves that goal that they were going to get a hundred days. I love constraints and that's quite the constraints.
And so the two creators were the American Baron and Carolyn Grossman. And it's about two people who work together. So it's like severance meets eternal sunshine of the spotless mind.
So it's two coworkers who work together. Apparently they take this like melatonin gummy that allows them to dream every night that they're married to each other but then when they wake up they totally don't remember that okay and they wanted to go into the theaters and they just did it they went to independent theaters and said hey can we show our films in your theaters and they were like you're crazy you're not a studio but sure like they gave them a goal if you can pre -sell every theater at $10 ,000.
We'll let you do it. So they did two and then they did 10. And then, so they did several hundred and they would drive in their RV and actually go show up at every single one of these showings.
And Kickstarter picked it up. We, you know, they spoke to Adweek back at South by. We took it to France.
We took it to the Cannes Film Festival. And this was their first year of the Creator Summit. And so on stage was Markiplier.
He had Iron Lung. And Seb, this French creator whose film actually premiered at the Cannes Film Festival. So I've been talking about this for three years.
I left Hollywood behind to come represent and protect these young creators.
This moment is here. You know, when I left Hollywood, so many of my former colleagues said, don't do it. Like, it's a terrible idea.
You're taking this huge risk. There's no money in this space. You'll be babysitting kids.
And now, Nathan, I have three offers from the biggest law firms in Hollywood asking me to bring my book of business in. And I actually said, I don't think I need to. Thank you so much.
You know, and so it's quite a moment in time for creators. I really think it's. you know, I think Colin and Samir said this, you know, this is the era of abundance for creators.
And this is such a lovely conversation. Thank you for having me. I'm a big fan, you know, of what you're doing.
So thank you. Yeah. Thank you so much.
If you enjoyed this episode on building a valuable YouTube business, one of the best examples I know is Ali Abdaal. He joined me on episode 35, where we break down how he's scaling his business towards $10 million. We get into revenue streams, the team, and how it all can run without him.
You'll see exactly what Tyler described put into practice. Like the video if you enjoyed it. Hit subscribe on YouTube or wherever you're listening.
And I'll see you next week.
The Hook
The bait, then the rug-pull.
The episode opens with a warning dressed as a fact: every creator is a tenant on someone else's platform, one policy change away from losing their entire audience. Entertainment attorney Tyler Chou, who has represented some of YouTube's biggest channels through nine-figure exits, spends the next 77 minutes walking through exactly what separates a channel with real enterprise value from one a buyer won't touch at any price.
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Eighteen years after founding it, Pat Flynn handed Smart Passive Income to email marketer Liz Wilcox. The two of them, with host Nathan Barry, walk through exactly how the deal and the six-month reveal actually worked.
James Clear returns to the Craft & Commerce stage eight years after his first Atomic Habits talk to unpack the newsletter, the positioning, and the publishing company behind the book's 30 million copies sold.
Layla Pomper hit the same course-revenue ceiling for years, then tripled her monthly income by layering a paid service on top of the course she already had.
A founder who scaled his own brand past 3.5 million followers maps the five stages every creator-led business passes through, and the one identity shift that moves you off the treadmill.
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