More creators start businesses and compete for investors

On the other hand, creators who own businesses are scrambling to become more competitive in the market and seeking investment to expand their businesses. Creators-turned-entrepreneurs are eager to leverage their popularity and diversify their income to future-proof their careers and secure a steady income even as their online presence wanes.

Venture capitalists, citing their concerns about social media influencer startups, said that while these businesses are at the forefront due to the popularity of their founders, it is much more difficult to grow.

Pranav Pai, founding partner at early-stage investment firm 3one4 Capital, said: “While creator-led businesses have huge potential, they also face unique challenges that may make them look smaller than standard startups. Businesses are riskier,” said Pranav Pai, founding partner of early-stage investment firm 3one4 Capital. viral trends to maintain the appeal of their products, but this makes retention unpredictable as it does not suit an audience that tends to move away from today’s trends quickly, making repeat interactions with customers and monetization a major challenge for them challenge.

Build a brand

Pai also pointed to another issue – the operational challenges of launching a brand. “Building a sustainable brand requires more than just a large following, it also requires a clear product vision, resilient operational expertise, and a deep understanding of your target market. Historically, many creators around the world have The struggle to transition from influencer to entrepreneur can make it difficult for today’s creators to obtain funding,” he stressed.

Investors have a holistic view of influencers as founders and therefore focus more on vision and product rather than their commitment and ability to leverage name recognition. Venture capitalists are skeptical that influencers can convert their large social media followings into loyal consumers.

“Influencer brands follow the same basic principles as any other brand. Therefore, VCs evaluate the team’s ability to effectively guide marketing, distribution and product development in order to leverage the influencer’s own brand and reach. Getting the product is critical There’s a good fit between the author’s persona and the audience,” said Apurva Dixit, assistant vice president at Blume Ventures.

More business from influencers?

That said, the market is growing on the creator side, and the industry expects more impactful businesses to become more professionally established in the coming year.

“Influencer-led businesses are experiencing tremendous growth as creators take the major leap from personal brands to full-fledged businesses,” said Pranav Panpalia, founder of talent management agency Opraahfx. “Going forward, we expect more of these businesses to be co-led by specialist partner CEOs with creators, blending creative vision with strategic management expertise. This powerful synergy will not only sustain these brands; will propel them to new heights, ensuring lasting relevance and impact,” he added.

For example, fitness founder Gaurav Taneja, aka Flying Beast, used his popularity and expertise in fitness and nutrition to create two fitness brands: Rosier Foods (whose flagship product is conventionally produced A2 Ghee) and Beastlife (high-quality sports nutrition and bodybuilding supplements) company. He launched Rosier Foods in April and Beast Life in May.

“A creator’s internet popularity and relevance run by algorithms is limited. It’s scary to realize that this won’t last. I think using my expertise in health and supplements to invest in a brand ensures the future income is a safer bet,” Taneja told Mint.

He added that because they didn’t have to spend as much money on marketing as they had with their strategy, they didn’t burn cash and ended up running a cash-rich business. “Unlike most other startups in this space, marketing is not our biggest expense. We are working hard to improve product quality, expand production to meet supply, and diversify distribution channels,” he added. He further said that once they decide to go offline, they will receive financing in the future and will need a lot of cash. Currently, Beastlife’s projected annual recurring revenue (ARR) is $50 crore with an Ebitda of 10%, while Rosier is able to generate the same ARR with an Ebitda of 15%.

On the other hand, Shlok Srivastava, popular for Techburner, already owns a successful clothing brand Overlays Clothing. He diversified the technology brand Layers, which previously only sold mobile phone cases, and launched the smart watch Anarc. He invested US$1 million to produce a “fashionable” and “practical” smart watch priced at $7,999. However, the creators of the technology told Mint Within the first two weeks, the brand closed $3.5 Crores.

Build a brand for the future

Srivastava is also open to funding, but notes that VCs are not keen on funding creators-turned-entrepreneurs, arguing that they cannot balance content creation and entrepreneurship. However, this is not the case for his brand, which has a vision of becoming a mature technology brand in the future. He also noted that because he has a large following and is known as a technology expert, he faces greater pressure to deliver quality technology products at economical prices.

“Understand that a creator-led business is just another product business. As creators, founders can only expand their reach and shorten the process of customer acquisition. Beyond that, the product has to be better than other products.” The existing products in the market are the core of the business, not the creators,” Srivastava emphasized.

Market experts suggest that this is an important aspect of the business that creators need to emphasize when determining their funding goals. Venture capitalists will evaluate them from an investment perspective as regular businesses and their products, rather than looking at them through the prism of social media popularity.

“Creators with large social media presences have an extra advantage and head start when building brands. However, in order to sustain this growth, they must build strong distribution and product channels as investors ultimately view them as seeking returns Amiya Swarup, partner at Ernst & Young in regular business, said:

Podcasters Raj Shamani’s House of increase. enterprise.