Why Are Venture Capital Firms Looking to Invest in Mr Beasts Billion Dollar Empire

Why Are Venture Capital Firms Looking to Invest in Mr Beasts Billion Dollar Empire

Who Exactly is Mr. Beast and His Assets?

Mr. Beast (aka Jimmy Donaldson), the 24 year old YouTube Influencer, recently turned down a billion-dollar offer for his content and related businesses. That's right businesses (as in plural of business). Whilst, most may not be aware, Mr. Breast, in additional to having multiple channels on YouTube (in different languages), has a delivery-first restaurant chain, Mr. Beast Burger and his Feastables line of snacks launched in January and has already amassed more than $10 million in sales; and he has a merch store. 

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Additionally, he's not just on YouTube, his team is active on all social media channels, but YouTube remains his primary social media channel. Finally, he also has a management company, Night, which, if it’s like most management companies, takes a percentage of its client’s earnings. In Hollywood, managers often take 20%.

In 2021, he reportedly made $54 million from channels, has  117 million followers on his main channel as of early December 2022, and he’s closing in on 20 billion lifetime views. 

How Much Does Mr. Beast want to raise from VC's?

According to a report in Axios, Mr. Beast wants to raise $150 million in himself (and his companies) at a value of $1.5 billion. That's a 10x multiples and implies that all his business combined are crossed the Unicorn (at or over $1 Billion) valuation. 

Direct VC investment in people is relatively new. Last year, YouTube creator Marina Mogilko accepted $1.7 million in funding from a few investors, who will take a 5% stake in anything Mogilko does for the next 30 years - that's a long committed for a $1.7 million investment. 

Slow Ventures, who made this investment in Mogilko, has stated that, “If someone had a lot of these creators’ numbers but instead of being a person they were a company,” he said, “they would have great venture capital.”

This is not the first go for Donaldson with VC's. He has taken $5 million to start Feastables and brought in the former president of RxBar to run the snack brand, and RxBar famously grew without more than its initial $10,000 investment to a $600 million exit. 

Whilst, there are skeptics, a veteran VC shared with Fast Company, and suggested that these kinds of investments in creators are similar to deals that firms make in talent-driven production companies like Reese Witherspoon’s Hello Sunshine. Last year, Witherspoon sold her company at a value of $900 million to Candle Media.

What Does this Mean then?

Our analysis of situation is plain and simple. VC's are always looking for channels (new or conventional) to find an investment opportunity that has desired returns. (Read How VC's invest). If the business has legs, sustainable competitive advantage, can scale, then all the basic boxes are checked.

Mr. Beast here is the brand, that has multiple channels of growth and possibly has the muscle to sustain a competitive advantage. There could always be media deals in the future, that even allows for a pivot into licensing opportunities, trademarks and international footprint (beyond YouTube).