YouTube and Facebook execs who left to fund creator businesses explain who they're investing in with Next 10 Ventures and why

Next 10 Ventures

Ben Grubbs

• Former YouTube exec Ben Grubbs started Next 10 Ventures in 2018 to invest in creator-focused businesses.
• Grubbs just announced his inaugural slate of investments, which mainly contains startups providing an "enterprise layer of support" for people who make social videos.
• Next 10 recently hired Facebook's VP of creator partnerships, Lauren Schnipper, and will begin investing in creators themselves in 2019.
• "We are going to have to help craft those business and finance plans for creators," Grubbs said. "We are not going to see a lot of business plans."

For years as the creator economy grew from nothing, Ben Grubbs sat on the platform side of the table as an exec at Yahoo, Ebay, Turner, and finally YouTube.

And there was one conversation Grubbs had over and over again, in one form or another, he told Business Insider.

"You are giving me money for what's on YouTube," Grubbs recounted a top creator saying. "But what I really need support for is this off-YouTube piece." While a platform like YouTube and its ad revenue can serve as a valuable anchor for a creator, there often are lucrative opportunities in avenues like licensed products, books, brand deals, or even linear TV shows.

But YouTube wasn't set up to fund those types of off-platform ventures, Grubbs said. The view inside YouTube was, "We are not going to move money doing off-platform activity," he said.

And after passing off-platform business ideas to others for years, Grubbs said he had a lot of people in his ear encouraging him to do it himself.

Last year, Grubbs finally made the jump and left YouTube to start Next 10 Ventures, a venture-capital fund focused on investing in creator businesses. Now Grubbs is announcing Next 10's first round of investments from its inaugural $50 million fund.

Many of these seed-stage investments - which range from $250,000 to $500,000 - are going to companies that provide support services for top creators.

There's been a "move within that group away from the traditional multi-channel network, but they still need tools and support," Grubbs said. "Who are these companies that are coming in to fill it?"

Here are some of the companies Next 10 invested in:

• GoMeta, a US-based company that "provides a software suite for anyone to make interactive content and design their own AR, VR, gaming and education experiences."
• SuperBam, a "digital rights licensing and management company" focused on creators.
• Stage TEN, a Toronto-based "live production management studio."
• AnalyzeLog, a "digital agency for kids and family creators in Japan."

Beyond the enterprise layer, a focus for Grubbs and Next 10 in 2019 is investing in creators themselves.

Grubbs said he thinks of creators as falling into five categories: Artists or storytellers, entrepreneurs, educators, opinion leader or critics, and promoters. Next 10 is focused on the first three categories.

For education in particular, Grubbs said he sees a lot of demand and a lack of supply. This is especially true since some educational creators disable ads for ethical reasons and can't make money directly from YouTube, which limits their growth potential.

Next 10 recently hired Lauren Schnipper, who was head of creator partnerships at Facebook, as VP of creator partnerships to help guide investments in their businesses.

"Ben and I have a very similar background," Schnipper said. Creators would come to her with "interesting ideas they wanted to expand upon." But a lot of the things they wanted to create were off-platform, and Facebook was not set up to invest in them.

Next 10 Ventures

Lauren Schnipper

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Traditionally these creators get no investment, in part because they don't have the business plans that a typical venture capitalist would look for, Grubbs said.

"We are going to have to help craft those business and finance plans for creators; we are not going to see a lot of business plans," he laughed. "And I really have only seen one out of dozens of conversations - I was so excited when saw it." Grubbs said Next 10 is conducting due diligence on that particular investment now.

As the year goes on, Grubbs, Schnipper, and their team spread across Los Angeles, San Francisco, Shanghai, and Singapore will be scouting high creator growth areas for potential investments.

One area Grubbs said he won't be funding is creators or entrepreneurs who already have a firm idea of an exit in mind.

"Are you thinking about long-term growth and sustainability versus a money-grab type opportunity? That's the part where, if we are seeing that, we are going to steer away," he said.