Jimmy Donaldson, known as “MrBeast” on YouTube, today unveiled a new company called Creative Juice focused on providing equity-based financing for YouTube creators, including valuing and investing in YouTube channels.
Creative Juice initially will focus on valuing and buying minority stakes in YouTube channels and supporting creators with mentorship. It’s part of a growing trend toward platforms aimed at meeting the financing needs of the creator economy by offering investors the chance to buy into creators’ future earnings in various forms. Donaldson is investing $2 million in a fund to invest in YouTube channels. He, and co-founders Ezra Cooperstein (his business manager) and Sima Gandhi (former Plaid executive) are building the Creative Juice platform [Mr. Cooperstein later clarified that Mr. Beast is just an advisor to the company, and that the $2 million of funding Mr. Beast discussed in the interview as 'investing' would be coming directly from Creative Juice investors not Mr. Beast himself].
Equity-based investment models for individuals are gaining momentum. A variety of companies oriented toward income-sharing agreements, particularly in the education arena, have emerged in the last several years. Meanwhile, companies such as Pando Pooling offering income-pooling products, which allow young baseball players and MBA students to pool together for a share of their future earnings, are gaining acceptance as financial products.
More recently, efforts such as the Libermans company have started to pick up momentum. Libermans arranged for a set of well-known sibling entrepreneurs to raise capital from investors in return for a small amount of equity in the next 30 years of their entrepreneurial output.
All that said, as I have noted before, creating new routes to finance digital creators seems like one of the biggest opportunities for innovation—and one that is evolving quickly.
Donaldson is the ideal creator to kick off this movement. With over 50 million subscribers on his YouTube channel, which regularly generates more than 30 million views on each of his videos, he is one of the largest and most influential YouTube creators. Donaldson recently started a fast-food restaurant chain, MrBeast Burger, which now has 450 outlets, although Donaldson says he expects it will reach 2,000 by the end of the year. (MrBeast Burger operates out of existing restaurant kitchens, selling meals through delivery apps like DoorDash, rather than creating its own dedicated physical restaurants.)
I talked with Donaldson on Tuesday to discuss his new company, Creative Juice, his own journey as a creator and his thoughts on the future of investing in creators. The following transcript has been edited for clarity and length.
An important note: Slow Ventures, the venture firm through which I invest, is heavily invested in this space. We have financed numerous ISA companies including Stride and Vemo, Pando Pooling, the Libermans Company and Creative Juice. We also have started a creator fund, which is investing directly in creators with a new long-term–oriented structure. While I can assure you I deeply believe in this space and in Creative Juice, I am also talking my own book.
Sam Lessin:
Can you start with the backstory on how you got excited about the idea of Juice?
MrBeast:
It really just starts from my own case and situation. I’ve always reinvested 100% of what I made off my channel. One thing that I kept running into, though, is that there’s a lot of delays [in getting paid]. Sometimes brands take like five months to pay you.
So in my case, since I operated at such razor-thin margins, if one brand was like a month late to pay me, it’s like, “All right, guess I gotta go take out a loan. I don’t have enough money this month.”
So for me that’s where it seemed interesting. There is a point for a lot of businesses where when you’re growing really fast, a giant cash influx is typically what a business would [raise to] help pour gas on the fire. It’s just a very natural thing for businesses to do, but in the YouTube world you don’t really see it.
If you want to sell only 5% of your channel currently, I don’t know of a way you can really do that. I don’t know of a company that actually buys equity in the channels and on top of that provides value and helps you with advice and things like that.
I obviously share your thesis around this, but remembering back in your career, did you ever try to go to a bank for your accounts receivable?
Can you even imagine trying to explain the value of your YouTube channel to a bank?
I understand that, but the idea of financing your accounts receivable because a brand is definitely going to pay you in three months is very basic. I’m curious if you’ve ever explored that or if it was just like there’s just no chance that a bank will even do that basic version.
Things are a lot easier for me now that I’m big. Who I am now, it’s a completely different story than when you only have a few million subscribers. For me it was easier just to hit up Night Media [Donaldson’s management company] and just go “Yo, let me borrow a few 100K this month.” [MrBeast has arranged loans from both Night Media and Spotter.la, a company which loans money to creators.]
So you sell equity in a new channel, but it’s more than that. We’re going for people who want strategic partners, who want to be mentored.
So let’s talk about that. Tell me how you think about a situation where an awesome creator, early in their career, comes to you. They have some traction; there’s a lot of mentorship you can do. How do you think about valuing their channel today based on metrics?
The truth is honestly, I don’t really know yet. I haven’t invested in channels yet. We’re gonna open up a $2 million fund, and I’m gonna start doing it. Juice and the team there have all the metrics; they know how to value channels. So obviously, there’s a lot of external stuff you can’t really value like their work ethic, what they know.
So for me, that’s honestly just gonna be trial and error. I’m not trying to screw anyone over. I want to make deals that are fair for both sides. Genuinely, I just want to help people out.
We’re also doing a bunch of creator investing directly at Slow Ventures. Obviously financing YouTube channels is where you are starting, but what does this look like in 10 years? What’s your dream?
I don’t want to spill all the beans about Juice, but the creator economy is only going to get bigger.
The thing I love about YouTube is obviously it’s owned by Google, which does a majority of the searches in the Western Hemisphere. Honestly, at this point, betting that YouTube won’t grow is like betting against the internet. It just isn’t logical. Gaming viewership on YouTube has doubled in the last two years alone! So the trajectory for YouTube is just gonna keep getting bigger and bigger and there is just going to be more and more creators.
So I think it’s just about building out an entire suite of tools for everything a creator would need. And nothing says we have to stop at YouTube. Even things as simple as the fact that YouTube paychecks are 30 days behind but Google’s money is as good as gold. Just allowing people to get the money the day they earned it and giving them an advance for a micro fee would be interesting.
Anything and everything a creator could want, that becomes the end goal for Juice: a one-stop place for creators to do everything financial in a world that doesn’t undervalue them.
How do you think about the future of creators primarily being on one platform versus being multiplatform—YouTube plus TikTok, plus Instagram, plus OnlyFans? How does it inform how you think about your community and financing people?
The beauty is currently if any creator wants to make like real money, they flock to YouTube. When Vine blew up, people went to YouTube because they weren’t making money. The same with TikTokers who are currently going to YouTube, right? YouTube is definitely currently the best social media platform to make like real cash.
Take Instagram: If you’re a big creator, you get priced out of the market. There’s very few brand deals for you, and there is no ad revenue. YouTube [on the other hand] is perfect no matter what size; there’s tons of brand deals. There’s obviously ad revenue, as long as you’re in the partner program.
So I think a lot of creators have diversified on multiple platforms. But at the end of the day, if you want to make money you go to YouTube, and I don’t think that is going to change because of all the connections Google has with Google ads and stuff like that, and all the data they have. So I think that’s why YouTube’s gonna stay the bigger one.
How important is Google search to your viewership and engagement as opposed to your following?
I think we’re getting around 30 million views a video and like 29-plus million of it is coming from people just getting it on their homepage.…Only a million are coming from people searching up the new video.
You are obviously an exceptional case. But when you think about other creators you are investing in, I assume the key is building that loyal fan base more than it is Google’s search, right? Or is search a superimportant discovery mechanism?
So the question is whether small creators need search to grow?
Yeah.
They definitely do not. I’ve literally seen people with under 100 subscribers get a million views on a video, if me and my friends just show them how to make a video properly.
There’s this guy who is pulling 10,000 views a video. He asked me for some advice. I was like, “Fine, I’ll help you get a viral video.” So we gave him a video idea. I told him how to film it. You know, he filmed it multiple times.
I shit on the thumbnail after he did it. And he had to keep making the thumbnail. And he got mad at me because he’s like, “This is good.” I’m like, “No, it’s not there yet.”
So I made him put like four times the amount of effort in a video. It was an idea I gave him because I knew it was just a very clickable one. And that video went on to get 10 million views, which was more views than his entire channel had.
I’ve had tons of other instances like that. Usually a lot of people are either really good at making tons of thumbnails or they’re really good at making great videos, but like very few people are good at both.
So it’s usually just identifying what they suck the most at, but just telling you about how to not suck at it. And then yeah, I mean, that algorithm works like wonders. It doesn’t matter if you have 1,000 subscribers or a million. If you upload a really good video with great retention, a great [click-through rate], it’s gonna pop off.
Obviously with Creative Juice, the idea is to give people investment early so they can put money into their work. But I’m curious. A lot of what you’re talking about is the secret sauce about making great videos. If you give a creator a bunch of money upfront, when you say invest all that in your content, what does that actually mean? Is it buying a nicer camera? Is it getting the right help? Is it buying distribution? How do you use money well as a young creator to grow faster?
Well, and that’s the thing. We’re gonna make sure we find ones that actually need a giant cash inflow and aren’t just trying to go buy a Lamborghini.
For instance, personally, when we needed a warehouse it cost over a million dollars, which is because I’m in North Carolina. If it was in California it would have been, you know, 4 [million] or 5 million, because land and warehouses are much more expensive there.
That’s something we needed so we could keep doing bigger videos consistently instead of out of our tiny office space. So that’s an example of a big project you would spend money on.
I wouldn’t necessarily advise someone “Do this just to fund like a video or two.” That probably wouldn’t be the wisest. I think where it works best is things that can really aid you in the long run.
Do you think we will see a Y Combinator for creators in the future, or a program where people level up their game, or do you think it will all be more personal and bespoke because different people and brands need very different things?
Yeah, I think we very much could. I’ve personally helped creators from every single vertical; I’ve helped countless ones. I literally spent six years of my life intensely studying how to go viral, like hours upon hours every day. But what is the point? Why not just own a bunch of channels versus making a Y Combinator? This investing thing is a passion.
So there is no world where it isn’t going to be big, so long as it’s the only real financial platform for creators. But as far as a Y Combinator, if I was going to start that, honestly, it would just make more sense just to own the channels.
Do you think the equation for going viral will stay the same or will it keep evolving? Do you think there’s just a model, and once you get it, you know what you’re doing?
Well, the thing is, at the end of the day, what YouTube wants is [for] people to click on a video, and they want them to watch it. And I don’t think that’s gonna change. Honestly, it really hasn’t changed hardly at all over the last four years.
So they might change certain things a bit. For instance, they might give more emphasis on shorter videos, because TikTok is blowing up, which is why you see shorter videos have been blowing up a lot last year. But at the end of the day, for the last four years, if you just made a video that people clicked, and then watched a very large percentage of, it’s done well, no matter the length, no matter the topic.
When you look forward five or ten years, do you see more of the same? Is anything in terms of consumers or how people interact with creators on platforms going to change? What are you really amped about?
Yeah, I’m incredibly amped to see what businesses people build off their YouTube channels. Obviously MrBeat Burger was a great success. We’re closing in on like 450 restaurants.
Four months ago, no one would have ever thought that was possible for YouTubers. And now not only is it doing well, but we’re crushing it.
I think we could be up to like 2,000 restaurants, by the end of the year, we have like 300-plus in the pipeline currently that we’re working on. And we’ll get to over 1,000 by the halfway point this year, and hopefully 2,000 by the end of the year. And I mean, even if every restaurant was only doing six to 10 orders a day, I mean, you can do the math, it gets pretty crazy at that scale.
And that’s just one of the companies we’re starting.
So that’s what I’m most excited about. And I really think we’re gonna see a change…I think a lot of creators are going to go, “Hey, Coke or Pepsi, you want to sponsor me?” And when they don’t get a sponsorship, [they’ll] just be like, “All right, I’ll just make my own soda.”
What’s stopping a creator from launching basically any brand? Why would you not buy their brand over this basic one, you know, that you don’t even care about at the store?
Talk to me about Elon Musk. He is obviously not a YouTuber, but when you think about influencers or creators he’s right up there. Not only is he creating companies, but with GameStop, or even Dogecoin, or his flamethrower, he clearly has a deep connection with a community that will follow him into all sorts of weird products and experiences.
So I’m kind of curious how you think about his brand and his identity as a creator. Do you think there’ll be other people like him who don’t produce media but have some similar properties in terms of what you’re talking about, about the future of businesses?
Yeah, I mean, they’re definitely very similar to us. Elon Musk is just…just put it out there, the GOAT. He is literally building so many great companies, I don’t even have to go in depth—everyone knows this. But in Elon’s case, it’s so cool and fun to see him make jokes and tweet memes. Even if they’re not even like the most creative stuff, [it is awesome] because he’s literally the richest man in the world.
Yeah, but he acts just like us, you know, normal people, which is…is really cool.
I’m shocked there are not more people trying to be like Elon Musk or Chamath [Palihapitiya] in the business world. I think that’s something that is going to naturally change as younger people age up and you start to take more of these positions.
There have been creators who have violated the trust of their audiences. And that’s a very rapid downward spiral, right? Part of being raw is making mistakes; do you think we get to a world where people see past that or will one slip-up be devastating?
It comes back to how genuine you are. Some people, when they mess up, have scripted PR releases. And you can just tell that it just seems fake. And then other people are just like, “Yeah, I fucked up. And I’m sorry.”
It’s not like everyone who’s ever messed up on social media was just instantly wiped out the next day and gone from the face of the earth. It’s just really like—what were your intentions?
I worked at Facebook for a long time and it’s interesting, because there used to always be this debate, which was “Will social media make the world more or less forgiving?”
The more forgiving version would be that everyone sees each other. And everyone is kind of out there. Everyone realizes that everyone makes mistakes, and things go wrong for everyone. And that’s OK. And the world becomes more forgiving. We’ve also seen that the opposite [happens], which is people like completely flaming and shutting each other down. So just it’s an interesting double-edged nature of this kind of new form of communication and connection directly between people.
Yeah, it’s just sad. There are a lot of people who just get enjoyment from tearing people down. Sometimes it is fun for people just to see someone who, you know, has been relatively squeaky-clean just crash and burn.
Well, Jimmy, I really appreciate you taking the time. Is there anything else that we should discuss?
I mean, at the end of the day it’s just that Juice is going to be really dope. If you’re a creator reading, this is probably gonna play a part in your life at some point. I’m really excited for it.
If you’re a larger creator reading this and you want to start a fund, hit me or Ezra from Night Media up, and I’m just excited to start investing and adding some value for some people.
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