Creators want equity, not just fees, but the sector has no playbook to price it

Creators are "wanting to do more than just earn money, they're wanting to build wealth," said Kate McAndrew, co-founder of the $100 million pre-seed fund Baukunst. At the same time, founders of startup companies "want creators on their cap tables. They understand the value of creators."

But the fledgling sector of the creator economy lacks a playbook.

The Washington Post reported on the missing infrastructure around creator equity deals, highlighting the gap between demand on both sides and the absence of standardised deal structures. Creators who built audiences are asking why they should cap their earnings at a one-time cheque if they're driving enterprise value. Brands, especially early-stage startups, see equity as a way to stretch budgets and secure long-term commitment. Neither side has a rulebook.

The Poppi deal made equity impossible to ignore

In March 2025, PepsiCo announced it would acquire Poppi for $1.95 billion. The deal was completed on May 19, 2025. Alix Earle has been an investor with the brand since 2024. Her resume includes an equity stake in the soda brand Poppi as part of her endorsement fee, which meant she benefitted from its $1.95 billion sale to PepsiCo.

The exact size of Earle's stake has not been publicly disclosed, but industry observers estimate her payout in the tens of millions. That single data point has shifted the calculus for creators who have been offered flat fees for work that drives measurable revenue growth.

PepsiCo bought Poppi for $1.95 billion, and buried in that story was a detail most business media barely touched: Alix Earle had equity in Poppi, not a paid partnership, a stake. When the acquisition closed, she was on the winning side of something that no flat fee could have put her on. That story traveled and it shifted something because it gave a name, a face, and a $1.95 billion reason to a question creators had been circling for years.

What equity deals look like in practice (when they exist at all)

Deal structures include vesting schedules of 12 to 36 months, almost always with a cliff at month three or six, content deliverable minimums tied to each vesting tranche, performance triggers layered on top of time-based vesting, such as engagement thresholds or affiliate revenue targets, buyback or clawback clauses that let the brand repurchase unvested equity if the creator violates morality or exclusivity terms, and advisory or board-observer rights in roughly a third of larger deals.

Most advisory-style creator equity grants range from 0.25% to 2%, depending on the creator's audience size, engagement quality, and expected content commitment. Founder-hybrid arrangements can run higher, sometimes 3% to 5%, when the creator's role extends beyond content into product or strategy involvement.

Common structures include pure equity swap (no cash changes hands, the creator receives shares or options valued against an agreed deliverable schedule), hybrid cash-plus-equity (a reduced cash fee, often 30% to 60% of standard rate, paired with equity to bridge the gap, the most common structure for mid-tier creators who still have bills to pay), and performance-vesting equity, where shares vest based on measurable outcomes such as units sold, affiliate revenue, or subscriber growth, tying the equity directly to the same metrics brands already track for social commerce performance.

Why brands are suddenly interested

Creators are making real money, so they have money to invest now. A few years ago, the industry wasn't minting 20-something-year-old millionaires at the rate it is now with these creator businesses.

Paid marketing is not always super efficient, and for a pre-seed startup it's super inefficient. Bringing creators on the cap table helped instill trust, because if a creator is investing their time or their money, they obviously believe in what the company is doing.

Creator marketing spend continues to climb even as overall marketing budgets tighten, which means brands are hunting for structures that stretch dollars further. Equity swaps let a startup access a creator with a six-figure rate card without a six-figure cash outlay.

But the financial logic only holds if the creator's contribution can be valued accurately. That's where the playbook falls apart.

The missing infrastructure

McAndrew said brands should only consider creators who can provide real strategic leverage, not just ones who can post about the company. "It's about insights and strategy. People think that the creators are getting paid to post, and are getting equity to post. They're not. If they're getting equity, it's because they're teaching the startup how to market itself, because a lot of founders are not experts in creator go-to-market."

Traditional influencer marketing ROI models (cost-per-acquisition, engagement rate, conversion lift) don't cleanly map onto equity compensation. Brands need a blended framework that accounts for both marketing value and cap table dilution.

Every percentage point granted to a creator is a percentage point not available to future employees, investors, or founders. At scale, a handful of 1% to 2% creator grants can meaningfully impact a startup's later fundraising math.

Legal and compliance issues compound the problem. Equity compensation triggers securities law considerations that flat fees don't. Depending on jurisdiction and structure, creator equity grants may need to comply with securities exemptions, vesting schedules documented for tax purposes, and 409A valuation requirements in the US.

The FTC's endorsement guidelines already require clear disclosure when a financial relationship exists between a brand and a creator. An equity stake is arguably the clearest financial relationship there is, which means disclosure requirements aren't optional, they're existential to the arrangement's credibility.

Equity deals are trickling down to mid-tier creators

The Poppi-Earle deal sits at the top of the market. But the shift is already moving beyond mega-influencers. These arrangements are trickling down from mega-influencers to creators with 50,000 to 500,000 followers, the exact tier most brands rely on for scaled programmes.

The Gen Alpha skincare brand Evereden granted equity stakes to three creators aged fourteen, fifteen, and seventeen, and brought them into product development and brand strategy rather than paying them per post. It also opens questions nobody has settled, about minors holding stakes in the brands they promote, and about what authenticity is worth once it sits on a cap table.

Creator ownership platform OWM is being built explicitly to match creators with brands based on equity deals rather than one-off fees, moving influencer marketing onto the cap table.

What this means for social media marketers

If you're negotiating with a creator who has real reach and a track record of conversion, expect equity to come up. The conversation is no longer niche.

Before offering equity, run the full scenario: what the stake is worth at your current valuation, what it dilutes, what it could cost at exit, and whether your cap table structure can legally accommodate it. If your company doesn't have a cap table process built for non-employee equity grants, don't improvise one for a creator deal. Get a securities lawyer and a compensation consultant involved before the first term sheet goes out.

For brands exploring creator equity for the first time, the question isn't whether the model works. Poppi proved it can. The question is whether your business has the infrastructure to do it properly, and whether the creator you're negotiating with brings strategic value beyond the post count.

As the broader creator economy scales toward half a trillion dollars, expect equity-for-content structures to move from novelty to standard toolkit, particularly for venture-backed direct-to-consumer and challenger brands that can't compete on cash media spend against category incumbents. Platforms and agencies are already building infrastructure to support this: cap table management tools adapted for creator equity, valuation services specifically for influencer stakes, and legal templates built for this exact use case.

The playbook is being written in real time. The brands that document what works, and what breaks, will own the next version of influencer marketing.