Where Social Capital Becomes Financial Capital
The SPV-ification of everything
A few weeks ago, a Twitter account labelled @MrBeastYT tweeted that he was launching MrBeast Burger, a chain of 300 burger restaurants nationwide. Within minutes, the app crashed due to such a high volume of orders. The app quickly vaulted to #1 in the App Store that day.
Who is MrBeast and how was he able to engage people to buy his burgers despite having zero brand or background in the food industry?
MrBeast is one of the world’s top earning YouTube influencers. He has an astounding 48 million YouTube subscribers who have created over 3 billion annual views of his videos. His viewership translates into $24 million in annual earnings.
When MrBeast launched his 300 cloud kitchen locations for fans to buy his burgers via his tweet, he quickly activated much of his 48 million strong network to engage with his content. In this case, burgers this time rather than YouTube videos.
Today, fans are able to order MrBeast’s food.
Tomorrow, perhaps they could invest alongside MrBeast into his burger franchise.
What if MrBeast could not only drive his fanbase to buy his products, but also to enable them to invest alongside of him into his business endeavors? If he has tens of thousands of orders for his burgers, imagine how much money he could raise from his fans to invest in his projects.
In the post two weeks ago, we talked about the power that Index Companies like Coinbase, Carta, iCapital, Republic, Pipe, Alt, and Rally Rd can have by creating the infrastructure to enable people to invest into various types of alternative assets.
In the post last week, we talked about the convergence of social and cultural trends with the financialization of everything. Millennials and Gen Z in particular are more comfortable investing into movements - and they want to put their money where the movement is.
Influencers create movements and movements are now investable. This is made possible thanks to the infrastructure companies in the alternatives space.
This post is about the “SPV-ification of everything.” Creators and influencers like MrBeast have proved that they can activate their followers to buy their products. Now, these creators and influencers can leverage the financial infrastructure that’s been created to have their followers invest into them or their projects directly.
This is where social capital becomes financial capital.
Monetizing Sweat Equity
There’s no reason why the ones creating the value shouldn’t own a piece of the value - or the upside - that they create themselves. DeAndre Hopkins of the Arizona Cardinals couldn’t have said it better himself when he said that he wants “equity deals only.”
Why shouldn’t a player fully monetize their efforts on the playing field in different ways? LeBron James could create a SPV (an investment vehicle that enables investors to collectively invest in a single company) to enable his followers to invest into his $1.8 million rookie card alongside him. After all, he’s the one waking up at 4 am in the offseason, staying in peak condition year-round and further mastering his craft so he can excel on the court, which also translates into value off the court since quality performances can increase the price of his rookie card.
The next phase of alt goes mainstream will be creators and influencers themselves finding ways to enable their followers to invest into assets and projects where they are directly impacting the value.
The infrastructure has been created for investing into startups and funds. AngelList and Republic enables investments into startups through SPV infrastructure they have built. Why can’t this be done with other types of alternative investments as well?
What will the “SPV-ification of everything” look like?
Investments into startups using infrastructure like Republic and Assure - Athletes, influencers, and creators creating SPVs to enable their followers to invest alongside them into startups.
Investments into sports cards and collectibles on platforms like Alt and Rally Rd - Pro athletes like LeBron James and Russell Wilson creating SPVs to enable their fans to invest alongside them into their own trading cards or collectables.
Investments into music artists on platforms like Indify - Artists like Leah Kate creating SPVs to enable their fans and listeners to invest alongside them to receive a portion of their royalties earned from successful songs.
Investments into writers on platforms like Substack - Popular writers on Substack creating SPVs to enable their readership to invest into their content platforms and earn a portion of their subscription revenue. Underwriting an asset like this is not too dissimilar from what Pipe or Capchase are doing by underwriting subscription revenues.
The magic of movements is that people become invested in the success of the movement, creating a circular economy where everyone benefits. When fans can invest alongside the influencers and creators they love, the fans become owners too. And they become even more deeply invested in the success of the influencer or creator in whom they’ve already invested their time, attention, and emotions, and now, their money.
Influencers and creators are figuring out how to monetize their followers. Now, they can take the next step to leverage that social capital by enabling their fans and followers to invest into them or alongside them to create financial capital.
This is why alt goes mainstream.
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