Creative Juice invests in creators
A banking app built for online creators, Creative Juice announced its $50 million funds to underwrite creator businesses. YouTubers and other social media stars can apply for upfront cash to grow their businesses in exchange for a cut of their revenue over a certain period of time, usually between six months and three years.
It sounds like a loan, but it’s not a loan (at least in the sense that Creative Juice isn’t a bank, so they’re not allowed to say they give loans). They refer to distributing “Juice Funds,” their investments in creators, as underwriting creator businesses or as revenue-based financing. But Juice Funds don’t accrue interest like a loan. And if the creator fulfills the terms of their contract, yet doesn’t make enough money to pay back their Juice Funds before their term is up, then it’s Creative Juice that eats the deficit, not the creator.
So far, according to CEO Sima Gandhi, there haven’t been any issues with creators not being able to pay Creative Juice back. This is in part because Creative Juice is so selective about whom it funds.
It’s difficult for creators to get loans from banks since their line of work is less established than your standard small business. Other startups have also sprung up to help fill in this gap, like Karat Financial, which offers creators access to business credit cards.
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Of course, there’s an inherent risk for a creator to take any sort of outside financing that has strings attached — but Gandhi says Creative Juice only succeeds if the creators that it funds to succeed, too. Creative Juice secured this $50 million pool from an alternative lender, HCGFunds, so if the startup doesn’t fund creators who won’t be able to turn a profit and then some, then Creative Juice is screwed, too.
Every Juice Funds contract is different. Any creator can apply for Juice Funds, and the company evaluates their existing business to see if it would be mutually beneficial to underwrite them. If so, they agree on a percentage of revenue that the creator will share with Creative Juice for the duration of a designated time period, which may range from around six months to three years. Gandhi declined to share what percentage of creators’ earnings are typically shared but indicated that usually, it’s up to the creator’s discretion whether they’d want a longer contract with a lesser revenue share or vice versa.
Creative Juice invests in creators
