What you and MrBeast have in common

and no Emily, it's not that he's a Pisces

October 03, 2022

the desire to invest in startups - influencers have increasingly turned to startups as an option to invest the $$ they bring in from brand deals
Some of the largest influencers have even created their own venture capital firms to invest in startups (Mr Beast with Night Ventures, Charlie D’Amelio with 444 Capital, etc.)
and equity crowdfunding, which enables non-accredited investors (non-millionaires) to invest in privately-held startups has been growing rapidly in size the past few years

ALAO (pronounced allow) is betting that more influencers will want to expand their empire by investing their cash in startups
The platform finds startups that needs funding, then aims to pair them with an influencer
In addition to investing, the influencer becomes a long-term partner and (ideally) promoter of the company’s products
ALAO then lists the startup on its platform and invites the public to invest alongside the influencer

In the decade prior, most startups’ playbook was shockingly simple. Run super-cheap Facebook ads… the ole ‘put $1 in and get $5 out on the other side’
While that worked pretty well back then, digital ad prices have skyrocketed and the business model is no longer a sustainable option for most startups

In the absence of cheap ads, startups are realizing that influencers can achieve the same scale, and their audience is already receptive to what they have to say
If your startup has the buy-in from a key influencer, your chances of success could be higher, which could lead to a greater appetite from investors

ALAO launched a pilot with a startup called The Plug, a plant-based recovery beverage chocked full of electrolytes
The Plug has a few influencers on speed-dial - Jack Harlow, @FridayBeers, and Brooks Nader (Sports Illustrated model) are partnered up with the beverage

So far they’ve been able to raise $43,527 from 66 people.
Now $43k doesn’t knock my socks off, but looking at the live deals in the food & beverage space on an established platform like Republic, it’s actually in-line or above the majority of deals
I’d give the test an 8/10 considering ALAO pretty much has no user base to tap into just yet

This is interesting - the playbook of cheap Facebook ads is broken, and we’ve seen that influencers have been super successful building their own brands; George Clooney and Casamigos, Mr Beast and Feastables for example
It will be difficult to ween startups away from established players like Wefunder, StartEngine, and Republic. Equity crowdfunding is still fairly niche and so while the pie is expanding, there currently is not an abundance of quality startups to bring onto the platform
I also believe that influencers are only beneficial to certain verticals, namely consumer-packaged goods, clothing, and other consumer products. Other areas (ie, healthcare/software) don’t necessarily align with what influencers can offer
Ultimately I think pairing each round with influencers will be a trade-off. It will help them accelerate user growth + funding, but will make it more complicated to get each startup live on the platform and potentially restrict the type of startups available to them

or to participate.