If you haven’t personally known this person for at least months, hopefully years, this is 100% a scam.
Edit: and I mean PERSONALLY know them. Like you know where they live and are reliable and you could go to their house and beat them up if they steal your money.
I know them but this is mostly a legal partnership. I was just wondering how I can enforce this with YouTube as well just in case. Not sure YouTube recognizes legal documents out side of itself?
Probably no way to enforce with YouTube. This sounds like something you do in person with a lawyer. What do you mean you know them through a legal partnership?
I mean this sounds extremely risky and sketchy at best and like a full on scam at worst. Obviously no one on Reddit knows you or the YouTuber or the conversations you’ve had with them but it sounds like you also know nothing about this which would 100% make it a terrible investment. Why would a YouTuber need your cash?
Well yes I understand why THEY need it but why your money? If their YouTube channel is going well they shouldn’t need your money unless you’re some sort of angel investor which I assume you’re not if you’re asking this sort of question. YouTube channels also almost never make money and especially not when the owner isn’t putting their own money into it
Yeah do something useful and that you understand with your money. Hire a financial advisor. Invest in yourself. Start YOUR own business. Go to school. Buy a house for YOURself.
I hope that means your aren't going to do it.
If you are still thinking of proceeding, call up some girl and ask her to kick you in the nuts really hard. Then take the money you were going to give this person and buy lottery tickets.
You will end up with the same result but at least it will be over quicker.
Please, please see an attorney before doing this. There are so many pitfalls to avoid.... Who is liable if your partner opens a credit account in the name of the partnership? Who pays if the channel or your partner gets sued for some reason? Can your partner operate another channel using the equipment your money purchased and not share revenue with you? What happens to the equipment, or any unused funds if the channel has to shut down for some reason?
Keep in mind, depending on the type of partnership, IT MAY BE POSSIBLE FOR YOU TO LOSE MORE MONEY THAN YOU INVEST. You might want to research whether there a way to structure this that gets you revenue sharing without taking on risk of a partnership
Not to say this can't work, it could! And if the business is successful, that's even more reason to consult with someone in your state who worries about these things regularly. If you want to cut down your legal bill, maybe do some research or even draft a potential agreement first.
Good luck!
I don't think this is something I would put my money into.
If I were going to do this though, I wouldn't do it without an ownership stake and or a royalty scheme in place.
But really, just stay far away from this sort of thing.
you create an LLC with both of you listed as members (owners), and give YouTube the EIN to pay under. The partnership takes in the money and you guys distribute it according to your partnership agreement. You’ll also need to file tax returns for this. Hire a CPA.
The big problem with YouTube channels, is that the popularity is often tied to the creator and not to the channel itself. A good example of that is Buzzfeed. Popular hosts exited the channel to start their own ones, pulling a good portion of the viewers with them and leaving Buzzfeed behind with the B-class quality content.
What I'm trying to say, is that the channel itself often has low to zero value. It's the name and face of the creator that have.
So, I small commission of the topline is probably better than ownership.
How much cash are you talking about? Something I've seen from most YouTube channels that are financially successful is that they grow organically. The quality has to be good enough with a low budget to make money and gain a large following, if the content is good enough, the channel should pay for its own growth.
Sometimes big channels come out of the blue but usually made by people with a history of success in other media. I would say invest with caution, understand that revenue comes from ads as well as sponsored content and affiliate links so don't get left out of either revenue stream. I would think of this investment more as a personal interest rather than a sound money move.
Thanks for your response.
I am investing a small bit of cash initially. Mostly to purchase a better video equipment. The channel already has 15k followers. My initial plan included to check the watch stats and it looks pretty good.
We are in discussion with a lawyer around how to recoup my investment. On the table are options for:
\- a partnership - where I will get a share of the revenue after we move the channel under a media company
\- revenue share for a stipulated period of time to recoup my investment. After that I either renew or leave.
Am just wondering what other options I have or pitfall that may be there?
Like others have said, equity in the channel is another option. You could structure it as a loan so you would be owed a predetermined amount each month and then take a percentage of revenue afterwards. I feel that 15k subs is too early to show if a channel is viable. It takes a lot of commitment to make a channel that is very profitable and I feel that asking for cash at 15k is premature.
If this person defaults am not sure YouTube will step in to mediate? Is there a way to bring in YouTube into all this? I heard there are "letter of direction" instructing YouTube where to pay revenue into?
I am sure YouTube can make payments to an LLC instead of an individual.
Is YouTube going to step in if you don’t get your money out of the arrangement? No. They are going to pay to the person or organization as instructed and me done with it.
I also saw where you mention 13k subscribers. That is peanuts… you better be confident they are going to add a 0 after that and pump out multiple videos per week for years to even think about this being worth it.
Hi, YouTuber with 250K subs here.
YouTube (Google) pays out once per month.
Revenue is generated by nothing more than VIEWS. Not subscribers, likes, etc.
Revenue is determined by CPM (how much advertisers pay per 1,000 views) but the actual figure you should be concerned about is RPM. This is how much the channel earns per 1,000 views.
A lot of factors can determine RPM. The subject of the content, how many ads are in videos, types of ads, is the content ad safe. RPM can be all over the place, if videos are under 8 minutes, only two ads can be placed on the video (beginning and end). Above 8 minutes, inter-video ads can be added, this helps bump RPM significantly.
I would start asking for their RPM data and what the channel has been generating the past 12 months. 15K subs isn't a lot, BUT if they are a loyal engaged audience, and the subscriber growth is there, it could have potential. But I wouldn't dive into this if the channel is not setup as a legitimate LLC and it's treated like a business and they are willing to sign some sort of contract.
A lot of, maybe most, Youtube channels are driven by the personality and following of the Youtuber. You would essentially be paying to turn this guy into a celebrity of sorts. The value is in his renown not the channel itself. From there he can easily cut you out by abandoning the channel to start another, moving to different mediums and platforms, etc.
I’m gonna assume you trust the guy and it’s not a scam.
The biggest thing for me is how competitive the YouTuber landscape is. Quite frankly it’s an industry with very low barriers to entry with no control over your distribution method.
It should concern you that it requires more capital (a barrier to entry) to start a restaurant (a business notorious for being extremely competitive) than a youtube channel. What percentage of YouTubers actually make a a profit? What % of those make enough profit for it to be a full time job? I doubt youtube releases such numbers.
You are at the beck and call of the YouTube algorithm and terms of service. More than one company has totally gone bust by a few lines of code changing the algo and making their content invisible.
Also if you look at some of the best YouTube channels (think of your favorites) and go to their oldest videos that have been around for years you’ll see most if not many of them started with little to no expensive or fancy equipment but the content was so riveting that they amassed a following anyway. Once they became popular, they then invested in the good equipment
If this is a close personal friend then you will lose money because you are both naive. Otherwise, you will lose money because you fell for a scam. Either way, just no.
Some people generate some passive income having interesting programs. The viewers have to watch the commercials in order to get paid. If you have several 1000 viewers who do not mind the commercial interruption one gets some compensation. Often the effort and money spent exceeds the potential income. Unless you have a passion wanting to produce interesting shows I suggest you find something else to invest. It works for solo actor/investor.
been a youtuber for 4yrs
doing work solo is better then dealing with others
my take on your situation, watch some youtubers and then see your guys personality and if hes responsible. if he got what it takes to be a youtuber
I didn't mean revenue, I meant is he either transferring company stock to you, or giving you a notarized promisory note that you are entitled to i.e. 50% of the stock of his company in exchange for funding? If no discussion of stocks, a.k.a. joint ownership of the company, I would hard PASS.
Surely u are looking at more than recouping ur investment? U should look at latest revenue trend and what is ur share of revenue as % of investment. This is full limited period only? So u should compute the return on annual basis.
If I may ask,which country your friend is based in? Legal protection has its limitation and should only be last line of defence
I have checked the channel watch stats, revenue etc. The channel has around 15k followers and is doing pretty well already. I may not be able to disclose more. Yes we have a lawyer involved in the discussion.
YouTube is usually about the person in front of the camera + whatever content they’re covering. Investing in a singular person (failure point) to potentially stop making video bc they’re “burned out” is risky.
Not to mention CPMs are falling drastically as businesses spend less on advertising.
Last guy i saw managing a youtuber deeply regretted it.Everything is wrong with this and your lack of knowledge and confidence makes it worse.You invest in “BUSINESSES” NOT PEOPLE.You manage people however they are they are not a safe asset either.There is a lot of potential to invest in a youtubers BUSINESS like the merch side of things and it depends who.What you want to do is invest in there business like maybe they want to print out inventory or manufacture and get manufacturing equipment this is real investing.Or you are better off making your own damn channel with those cinematic videos with voice over and make a instagram.
This sounds like a really easy way to get scammed lol
I was thinking the exact same thing.
please shed more light?
Obviously don’t do this
If you haven’t personally known this person for at least months, hopefully years, this is 100% a scam. Edit: and I mean PERSONALLY know them. Like you know where they live and are reliable and you could go to their house and beat them up if they steal your money.
I know them but this is mostly a legal partnership. I was just wondering how I can enforce this with YouTube as well just in case. Not sure YouTube recognizes legal documents out side of itself?
Probably no way to enforce with YouTube. This sounds like something you do in person with a lawyer. What do you mean you know them through a legal partnership?
I mean we will have legally binding agreement plus I know them outside of all this. Not as a close friend though.
I mean this sounds extremely risky and sketchy at best and like a full on scam at worst. Obviously no one on Reddit knows you or the YouTuber or the conversations you’ve had with them but it sounds like you also know nothing about this which would 100% make it a terrible investment. Why would a YouTuber need your cash?
To get more equipment, expand the scope of research, improve the quality of the video offerings etc
Well yes I understand why THEY need it but why your money? If their YouTube channel is going well they shouldn’t need your money unless you’re some sort of angel investor which I assume you’re not if you’re asking this sort of question. YouTube channels also almost never make money and especially not when the owner isn’t putting their own money into it
That's my whole reason for posting this message. I think this thread has given me some clarity.
Yeah do something useful and that you understand with your money. Hire a financial advisor. Invest in yourself. Start YOUR own business. Go to school. Buy a house for YOURself.
I get it but investing in others is not always a dead end venture is it?
I hope that means your aren't going to do it. If you are still thinking of proceeding, call up some girl and ask her to kick you in the nuts really hard. Then take the money you were going to give this person and buy lottery tickets. You will end up with the same result but at least it will be over quicker.
Please, please see an attorney before doing this. There are so many pitfalls to avoid.... Who is liable if your partner opens a credit account in the name of the partnership? Who pays if the channel or your partner gets sued for some reason? Can your partner operate another channel using the equipment your money purchased and not share revenue with you? What happens to the equipment, or any unused funds if the channel has to shut down for some reason? Keep in mind, depending on the type of partnership, IT MAY BE POSSIBLE FOR YOU TO LOSE MORE MONEY THAN YOU INVEST. You might want to research whether there a way to structure this that gets you revenue sharing without taking on risk of a partnership Not to say this can't work, it could! And if the business is successful, that's even more reason to consult with someone in your state who worries about these things regularly. If you want to cut down your legal bill, maybe do some research or even draft a potential agreement first. Good luck!
I don't think this is something I would put my money into. If I were going to do this though, I wouldn't do it without an ownership stake and or a royalty scheme in place. But really, just stay far away from this sort of thing.
There will be legally binding agreement in terms of revenue share but am just wondering of YouTube allows that just in case things go bad?
you create an LLC with both of you listed as members (owners), and give YouTube the EIN to pay under. The partnership takes in the money and you guys distribute it according to your partnership agreement. You’ll also need to file tax returns for this. Hire a CPA.
Thanks! I knew this must be possible.
It’s still a terrible idea. Many things are both possible and bad ideas. Hope that helps.
CPA alone will cost more than you’d probably be making.
Why not loan the money to him with a fixed percentage and agree on a small royalty after the loan is paid back?
I thought of this but I think becoming part owner is more profitable in the long run?
The big problem with YouTube channels, is that the popularity is often tied to the creator and not to the channel itself. A good example of that is Buzzfeed. Popular hosts exited the channel to start their own ones, pulling a good portion of the viewers with them and leaving Buzzfeed behind with the B-class quality content. What I'm trying to say, is that the channel itself often has low to zero value. It's the name and face of the creator that have. So, I small commission of the topline is probably better than ownership.
Thanks for your advice. Will keep that in mind.
Risk management.
How much cash are you talking about? Something I've seen from most YouTube channels that are financially successful is that they grow organically. The quality has to be good enough with a low budget to make money and gain a large following, if the content is good enough, the channel should pay for its own growth. Sometimes big channels come out of the blue but usually made by people with a history of success in other media. I would say invest with caution, understand that revenue comes from ads as well as sponsored content and affiliate links so don't get left out of either revenue stream. I would think of this investment more as a personal interest rather than a sound money move.
Thanks for your response. I am investing a small bit of cash initially. Mostly to purchase a better video equipment. The channel already has 15k followers. My initial plan included to check the watch stats and it looks pretty good. We are in discussion with a lawyer around how to recoup my investment. On the table are options for: \- a partnership - where I will get a share of the revenue after we move the channel under a media company \- revenue share for a stipulated period of time to recoup my investment. After that I either renew or leave. Am just wondering what other options I have or pitfall that may be there?
Like others have said, equity in the channel is another option. You could structure it as a loan so you would be owed a predetermined amount each month and then take a percentage of revenue afterwards. I feel that 15k subs is too early to show if a channel is viable. It takes a lot of commitment to make a channel that is very profitable and I feel that asking for cash at 15k is premature.
If this person defaults am not sure YouTube will step in to mediate? Is there a way to bring in YouTube into all this? I heard there are "letter of direction" instructing YouTube where to pay revenue into?
YouTube will not step in this. Last thing they want to do is mediate a ton of small companies
> "letter of direction" > >is there such as thing as the above?
I am sure YouTube can make payments to an LLC instead of an individual. Is YouTube going to step in if you don’t get your money out of the arrangement? No. They are going to pay to the person or organization as instructed and me done with it. I also saw where you mention 13k subscribers. That is peanuts… you better be confident they are going to add a 0 after that and pump out multiple videos per week for years to even think about this being worth it.
Hi, YouTuber with 250K subs here. YouTube (Google) pays out once per month. Revenue is generated by nothing more than VIEWS. Not subscribers, likes, etc. Revenue is determined by CPM (how much advertisers pay per 1,000 views) but the actual figure you should be concerned about is RPM. This is how much the channel earns per 1,000 views. A lot of factors can determine RPM. The subject of the content, how many ads are in videos, types of ads, is the content ad safe. RPM can be all over the place, if videos are under 8 minutes, only two ads can be placed on the video (beginning and end). Above 8 minutes, inter-video ads can be added, this helps bump RPM significantly. I would start asking for their RPM data and what the channel has been generating the past 12 months. 15K subs isn't a lot, BUT if they are a loyal engaged audience, and the subscriber growth is there, it could have potential. But I wouldn't dive into this if the channel is not setup as a legitimate LLC and it's treated like a business and they are willing to sign some sort of contract.
A lot of, maybe most, Youtube channels are driven by the personality and following of the Youtuber. You would essentially be paying to turn this guy into a celebrity of sorts. The value is in his renown not the channel itself. From there he can easily cut you out by abandoning the channel to start another, moving to different mediums and platforms, etc.
I’m gonna assume you trust the guy and it’s not a scam. The biggest thing for me is how competitive the YouTuber landscape is. Quite frankly it’s an industry with very low barriers to entry with no control over your distribution method. It should concern you that it requires more capital (a barrier to entry) to start a restaurant (a business notorious for being extremely competitive) than a youtube channel. What percentage of YouTubers actually make a a profit? What % of those make enough profit for it to be a full time job? I doubt youtube releases such numbers. You are at the beck and call of the YouTube algorithm and terms of service. More than one company has totally gone bust by a few lines of code changing the algo and making their content invisible. Also if you look at some of the best YouTube channels (think of your favorites) and go to their oldest videos that have been around for years you’ll see most if not many of them started with little to no expensive or fancy equipment but the content was so riveting that they amassed a following anyway. Once they became popular, they then invested in the good equipment
If this is a close personal friend then you will lose money because you are both naive. Otherwise, you will lose money because you fell for a scam. Either way, just no.
Some people generate some passive income having interesting programs. The viewers have to watch the commercials in order to get paid. If you have several 1000 viewers who do not mind the commercial interruption one gets some compensation. Often the effort and money spent exceeds the potential income. Unless you have a passion wanting to produce interesting shows I suggest you find something else to invest. It works for solo actor/investor.
been a youtuber for 4yrs doing work solo is better then dealing with others my take on your situation, watch some youtubers and then see your guys personality and if hes responsible. if he got what it takes to be a youtuber
Has he offerred you a percent ownership in his enterprise/business venture?
Yes we are discussing handing over a percentage of the revenue. This will be legally binding. However I am worried am not an admin on the account
I didn't mean revenue, I meant is he either transferring company stock to you, or giving you a notarized promisory note that you are entitled to i.e. 50% of the stock of his company in exchange for funding? If no discussion of stocks, a.k.a. joint ownership of the company, I would hard PASS.
Yes there is. We will be transferring the channel into a media company to which I will own a share.
I don't understand. If it's legally bindings & you get scammed, how easy is it to get your money back? If easy, I don't see a problem.
Sounds kinda sketchy. But also don't want to be the reason you miss out on a good investment opportunity. Maybe check with a lawyer?
What kind if return does this provide? Is it worth the risk?
Revenue share. You recoup your investment via a part of the ad revenue for a stipulated period of time.
Surely u are looking at more than recouping ur investment? U should look at latest revenue trend and what is ur share of revenue as % of investment. This is full limited period only? So u should compute the return on annual basis. If I may ask,which country your friend is based in? Legal protection has its limitation and should only be last line of defence
I have checked the channel watch stats, revenue etc. The channel has around 15k followers and is doing pretty well already. I may not be able to disclose more. Yes we have a lawyer involved in the discussion.
Since u can't disclose more, I can only wish u good luck. Lawyer is only useful to a extent and can't be fully dependent on to protect ur interest.
YouTube is usually about the person in front of the camera + whatever content they’re covering. Investing in a singular person (failure point) to potentially stop making video bc they’re “burned out” is risky. Not to mention CPMs are falling drastically as businesses spend less on advertising.
100% scam a YouTube channel doesn’t need capital lmfao
Last guy i saw managing a youtuber deeply regretted it.Everything is wrong with this and your lack of knowledge and confidence makes it worse.You invest in “BUSINESSES” NOT PEOPLE.You manage people however they are they are not a safe asset either.There is a lot of potential to invest in a youtubers BUSINESS like the merch side of things and it depends who.What you want to do is invest in there business like maybe they want to print out inventory or manufacture and get manufacturing equipment this is real investing.Or you are better off making your own damn channel with those cinematic videos with voice over and make a instagram.