3.Talent’s ability to change the trajectory of the company: Talent’s ability to help build the brand, market the product, expand retail distribution, etc. is a huge competitive advantage in CPG. In many tech deals, the product really needs to stand on its own two feet. I have seen marketplaces or social networks try to “load the supply side” with talent or content, which doesn’t typically work if the product wasn’t going to win on its own. The best tech x talent partnerships tend to be a bit more narrow and defined vs CPG partnerships. This often leads to a wide range of potential equity offers. There’s so much more to breakdown and I am sure I left off some big ones! Definitely fun to think about and happy to discuss with any founders.

2.Potential dilution: the earlier stage tech deals typically require more capital to get to an exit vs CPG deals e.g hundreds of millions or billions vs tens of millions or hundreds of millions. It’s not about what ownership you have today, but what ownership you may have at an exit.

However, a few general differences between tech and CPG: 1.Range of outcomes: broadly speaking there are more “grand slams” in tech deals, but also more “zeros” whereas the distribution of CPG outcomes is a bit “more narrow” and thereby more “singles and doubles”. Important for all parties to understand the risk/return of what they are getting into and impact on potential deal terms.

It’s certainly a function of a few variables on the talent side e.g. “size” of the talent, intensity of their involvement, how interested the talent is in the product or problem that you are solving, etc. It’s also a function of a few variables on the company side e.g. pre or post product market fit, quality of management team, investors, secular tailwinds, etc. There are also some category specific variables e.g “opportunity cost” of an endorsement opp in the category, category saturation with other celebrity brands, etc.

I often get asked about the rising trend of celebrity/creator involvement in ”equity deals.” This can take a number of forms, ranging from a celebrity co-founding a business to a celebrity’s passive investment as part of a fundraise. One of the most common framings that I get asked about is tech companies vs CPG. The big question is: How much does it cost for Celebrity X to get involved in my business?