Right now, [music] two different groups of investment bankers are evaluating one of my clients [music] YouTube channels. The valuation $100 million. Last year, we had an offer on the table for the same channel for $35 million.
This is life-changing money, but I told my client, "Let's wait. If we structure this right, and you build a technical app that we can spin off on its own, you'll be worth three times that [music] in 3 years. " I was wrong.
It took 1 year. Now, let's be clear. I didn't grow my client to $100 million.
He did that because he's a machine. My job was to protect the empire he was building. We bought out certain equity shares.
I pushed to end revenue splits that were bleeding him dry. I made the whole thing legally bulletproof. So, when he hit that number, he could actually sell it.
And that's the secret. He's not worth $100 million because of views. [music] He's worth $100 million because he built inventory, [music] courses, membership, a tech stack that runs without him.
And here's the hard truth. Most of you are building the opposite. [music] If you're new here, I'm Tyler Chow, the creator's attorney.
I represent some of the biggest YouTubers in the world. I left an 18-year career in Hollywood, working at places like Disney, Sky Dance, and BuzzFeed to come protect the new studio heads. you because I believe YouTube is the new Hollywood.
And because I sit at the negotiation tables, I see exactly what investors are buying and what they're ignoring. And for the last 2 years, I told you to be safe, you need 15 revenue streams. Diversify.
[music] Do the merch, the courses, the AdSense, the brand deals, the membership, the newsletter, the physical product, the technical product. But I was wrong. I take it back.
Building 15 revenue streams doesn't create a $100 million exit. It creates a trap. You [music] become the CEO of 15 tiny, fragile startups, all dependent on you showing up every day.
It's all dependent on your face. Investors can't buy a hamster wheel. They need assets.
And right now, the creator economy has an inventory crisis. Let me show you what I mean. I looked at a client recently, a massive gamer, 7 figureure brand deals, huge cash flow.
On paper, he's crushing it. But when we looked under the hood to sell his business, nothing. His entire income depends on his face, his energy, his upload schedule.
No IP, no software, no data. If he stops streaming, the money stops. [music] He actually had the right instinct.
He said to me, "Tyler, I want to build a platform to compete with [music] Twitch or maybe launch an energy drink. " And I said, "Yes, let's do that. " Exactly.
Because those are assets. Look at Mr Beast. If Jimmy stops filming tomorrow, the channel dies.
But Feastables, that's a standalone candy empire with its own supply chain in retail distribution. You can sell Fastables without selling, Jimmy. That's the difference between tier three and tier 1 creators.
My gamer client has a highpaying job. My $100 million client has a sellable enterprise. That is his empire.
So, what makes something sellable? What are investors actually looking for when they evaluate a creator business? I've been in these rooms.
I've seen the due diligence checklist. And it comes down to three things. Number one, recurring revenue.
Not brand deals, not AdSense. Those are unpredictable. Investors want to see money that shows up on the first of the month, whether you post or not.
I'm talking about app subscriptions, paid communities, or physical products with a subscribe and save model. [music] Think about Liquid IV or Magic Spoon cereal. They don't sell you a box once.
They get you on a monthly subscription for 20% off. That turns a $30 customer [music] into a $300 a year asset. That is bankable income.
What else do investors look for? Number two, transferable operations. Can someone else run this without you?
Do you have systems documented? SOPs? Do you have a team that knows how to execute?
Do you have a fractional COO or president? Or does everything live in your head? If you get hit by a bus tomorrow, does the business survive?
If the answer is no, you don't have a business. You have a job. And what is the third thing that investors look at?
Data ownership. Do you own your audience or [music] does YouTube own your audience? Do you have an email list, a customer database, a directory of verified professionals in your niche?
Data is the new oil and investors pay premium for proprietary data that platforms can't take away. If you get a copyright strike tomorrow or YouTube takes away your channel, do you have access to your audience? An email list is probably the most important thing you can own.
My $100 million client checks all three boxes. Most creators check zero. [music] And here's the painful part.
I realized I was checking zero as well. I haven't posted in 3 months. I burned out.
And I don't mean I was tired. I mean I hit a wall so hard I questioned everything. I built the creators attorney.
I built a law firm, Tyler Chow Law for creators serving the top YouTubers in the world. I was speaking at VidCon, VidSummit, Dubai, Can Lions, conferences all over the world. I had the team, the clients, the revenue, but I was working 18-hour days for almost 2 years straight.
That's more than 700 days. I had to make hard decisions. I exited team members who weren't right for the next stage.
I had to look at my calendar and realize that I had built myself a prison, not a business. I was doing for myself exactly what I was wanting my clients not to do. Trading time for money, running on a hamster wheel over and over again, just a more expensive hamster wheel.
And in that silence, those three months that I was gone, I realized something worse. The advice that I've been giving you on this channel was leading you into the same trap. Build the 15 revenue streams.
That's survival advice. [music] That's not wealth advice. So, I made a decision.
If I wanted to be the architect of 100 million empires and exits, if I wanted to help creators actually get free, I had to stop acting like a creator and start acting like an owner. I had to rebuild and I had to tell you the truth about what I got wrong. Now, you might be thinking, Tyler, I can't build a $100 million tech stack.
I don't have the capital. I don't have the team. But you know what?
You don't need to start there. You just need one standalone asset. Let me give you two examples.
And the first one is a real conversation I had with a creator. I recently met with a potential new client who is a big pet trainer on YouTube. He came to me recently.
He has a huge audience, millions of views in the pet space. But they didn't come to me for legal work. They came to me because they wanted to build real revenue streams.
They wanted to know what an exit could look like. That's the M&A advisory work I do through my business, Creator Arc. Retainer clients pay between $5,000 and $10,000 a month for that type of strategic access.
But on our very first call, before they'd sign anything, I gave them a $20 million idea for free, I told them, "Your audience keeps asking you the same question over and over again. Where can I find a good dog trainer in my city? Stop answering that question in videos.
Build the answer. A national directory of certified dog trainers. Trainers pay monthly to be listed and verified on your directory.
Dog owners from your audience search by zip code for free. This is recurring revenue, proprietary data, an asset that runs whether they post videos or not. That directory could spin off completely separate from the channel.
A private equity firm could buy it, roll it up with a pet food brand and a vet network and flip the whole thing for $20 million or probably more. That's the kind of thinking I give away on first calls because I want to prove what's possible. the execution, the legal structure, the deal architecture, the buyer introductions.
That's what the retainer is for. I have access to billiondoll funds who want to buy into the creator space, but we just have to build the inventory for them. Let's look at example number two, the fitness creator.
One of my favorite fitness creators on YouTube is someone named Carolyn Garvan. For years during co, she gave away free content. She built a massive following doing free workout videos on YouTube during co tier three approach would be to keep grinding, making more videos, brand deals with supplement companies, maybe sell a PDF program.
Instead, she disappeared. Everyone thought she quit. I thought she quit.
But in the back of my mind, I thought she's building something. And sure enough, she came back with an app, a fitness app. Now, she sells yearly subscriptions for a couple hundred.
And based on her audience size, she probably sold thousands in that first week. I was watching her launch. And I literally saw, I believe, 5,000 people who bought it.
Just do the math. That's potentially millions of dollars in recurring revenue from one launch. I bought one because I love her and wanted to support her.
Here's what's genius about it. The app works whether she posts a new video or not. And she has actually stopped posting YouTube videos.
The subscribers are locked in for a year. The content lives live inside the app, not on a platform she doesn't control. That app is an asset, probably worth $10 million or more.
A fitness company or a private equity firm could buy that app, plug it in with other trainers, and scale it way beyond Caroline. They can't buy her face, but they can buy her tech stack. And this is what investors call a rollup.
They acquire your directory or your app, combine it with other assets in the same space, and flip the whole thing for $50 or $100 million. They can't roll up your face, but they can roll up your platform. And this is why I'm launching Creator Arc.
Creator Arc is an M&A advisory firm for creators. I've actually been running it for the past 6 months. I've just never publicly announced it until today.
We prepare creator businesses for acquisition, legal structure, financial packaging, and buyer introductions. But here's what makes us different. We don't just show up at the end when you're ready to sell.
We come in early. We help you build the assets in the first place. Think of us as the architect building the empire for your exit.
We look at your business, identify what's missing, and help you build the inventory that investors actually want to buy. for my $100 million client. I've been in that role for two years, structuring deals, protecting IP, putting in proper employee contracts, doing the corporate structuring properly, giving out equity, making sure that when the bankers show up, there was something real to sell.
And I wanted to do that for more creators because right now there are billions of dollars sitting on the sideline waiting to invest in the creator economy and almost nothing to buy. I've talked to private equity funds like Electrify and Lunar X who bought Matt Pat with Game Theorist and Veritassium and they have both told me that inventory is their biggest issue right now. So, here's what I'm doing next.
I'm producing a documentary series on my channel called Creator Exits. I want to break down real businesses on camera and show exactly how to move from tier three to tier [music] 1. I'm selecting a handful of creators to feature.
If you're doing seven figures or more and you're serious about building something sellable, there's an application link [music] below. This isn't charity, it's curation. I'm looking for case studies that will define the next era of the creator economy and hopefully help the new creators coming up learn what to avoid and what to focus on.
And if you're not there yet, if you're still building, I've put together a tier 1 asset checklist. It's a simple diagnostic tool to see if your business is currently sellable or if you're stuck in the trap. Link in the description.
Download it. Be honest with yourself about where you are. And yes, I built an amazing law firm helping you deal with copyright strikes, demonetization, figuring out how to get your channel back, going after IP thieves, [music] and I am not stopping that.
My law firm and my amazing team will be here when you need it. But for the next year, I will be focused on growing out Creator Arc. [music] Because my 100 million dollar client didn't get there by accident.
He got there by structure, by building the right assets, by having someone in his corner who understood what investors actually want. I'll be speaking more about this at the 1 billion follower summit in Dubai in a few weeks in January. But you're hearing it here first.
[music] Stop building a job. start building inventory. Subscribe if you want the blueprint.
I'll see you in the next video where I will actually break down the directory for you if that's what you're interested. Write directory in the comments below. Or if you want to hear about how to build a technical app, write app in the comments below.
I'm Tyler Child, the creators attorney. It is my life's mission to protect creators and build out their empires because content is king, but IP is queen. I want you guys to own the entire board.
I'll see you guys next time.
