Latest / Influencer Marketing with Fexingo: Creators, Sponsorships, and Modern Endorsement Deals / How Influencer Deals Now Include Equity Ownership
Transcript
- Lucas: So here's a question I've been hearing a lot lately from brand managers and talent agents alike: should influencers get equity in the brands they promote? Not just a flat fee for a post, but an actual ownership stake. Luna: And it's not hypothetical. I've seen at least two deals this quarter where the creator walked away with equity. The most talked-about one is the beauty influencer who got a 5 percent stake in a direct to consumer skincare brand. Lucas: Right. That deal — which closed around March of this year — reportedly valued the brand at about 40 million dollars at the time of the agreement. So that 5 percent stake is worth roughly 2 million dollars on paper. But the real kicker is the structure. Luna: Which is? Because I assume it's not just a simple stock grant. Lucas: Exactly. It's modeled on how startups give equity to early employees. There's a four-year vesting schedule with a one-year cliff. So the influencer gets zero equity until she's been actively promoting the brand for twelve months. After that cliff, she gets 25 percent of the shares, and then the rest vests monthly over the following three years. Luna: That makes sense from the brand's perspective. They want to lock in long-term commitment, not a one-off post. But what happens if the brand gets acquired before the cliff? Does she get cashed out? Lucas: In this particular contract, there's a single-trigger acceleration clause. If the brand is acquired, all of her unvested shares become fully vested immediately. That's pretty creator-friendly. Not all deals have that. Some have double-trigger, which means the shares only accelerate if she's also terminated after the acquisition. Luna: So the brand is basically saying: we want you to be an owner, not just an employee. But I wonder how many influencers actually understand the dilution risk. If the brand raises more funding later, her percentage stake gets smaller. Lucas: That's the trade-off. Antidilution provisions are rare in these deals. Typically, the influencer gets a fixed percentage of the fully diluted cap table at signing. If the company issues more shares later, her ownership gets diluted unless she participates in the next round — which most influencers can't afford to do. Luna: So it's a bet on the brand growing fast enough that the absolute value of her stake rises even as the percentage shrinks. Lucas: Exactly. And that's the core tension. A flat fee is guaranteed cash today. Equity is a lottery ticket with a potentially huge payout — or zero. And we're seeing more influencers choose the lottery ticket, especially those who have built strong, loyal audiences. Luna: I talked to a talent agent last week who said that for top-tier creators — those with over a million followers — equity is becoming a standard ask. They're not even considering flat fee only deals anymore. Lucas: That's backed up by data from the talent agency I spoke with, Collab Creatives. They told me that in 2025, about 12 percent of their new influencer contracts included some form of equity. In the first five months of 2026, that number has already hit 18 percent. Luna: And it's not just direct to consumer beauty brands. I'm seeing it in fitness supplements, pet food, even a recent deal with a creator in the home organization space. Lucas: The fitness creator deal is interesting. A supplement startup called FitFuel gave a macro-level influencer a 3 percent equity stake plus a performance bonus tied to revenue generated through her unique discount code. So she gets both ownership and an immediate revenue share. Luna: That's a hybrid model that I think will become more common. It hedges the risk. If the brand takes off, she wins big on equity. If it doesn't, at least she got a cut of the sales she drove. Lucas: And some agencies are going a step further. There's a new fund called the Collab Equity Fund that pools equity stakes from multiple brand deals and distributes them across the agency's roster. So even a micro-influencer with 50,000 followers can get a piece of the upside from a few high-growth brands. Luna: That's clever from a diversification standpoint. Instead of betting on one brand, they're betting on a portfolio. But how do they value the equity? Is there a standard methodology? Lucas: Not really. Most of these brands are private, so there's no market price. Typically, the brand and the influencer agree on a valuation based on the most recent funding round or a 409A valuation done for tax purposes. But it's often a point of negotiation. Some brands try to lowball the valuation to make the equity seem less valuable, while the influencer's agent pushes for a higher valuation. Luna: And the SEC rules around accredited investors add another layer. Most influencers don't meet the income or net worth thresholds to invest in private companies, but receiving equity as compensation is generally exempt from those rules. Lucas: That's right. As long as it's compensation for services — not an investment — it falls under Rule 701 of the Securities Act. So the influencer doesn't need to be accredited. But the brand still has to provide certain disclosures, like a summary of the plan and the risk factors. Luna: So the regulatory framework is workable, but it adds legal costs. A brand might spend $10,000 to $20,000 on legal fees just to set up an equity grant for one influencer. That's prohibitive for smaller brands. Lucas: But for a brand that's raising millions in venture funding, that legal cost is a drop in the bucket. And the upside of having an influencer who's truly incentivized to grow the company can be enormous. Some brands are even making the influencer a board observer or giving them a say in product development. Luna: That's a whole new level of partnership. It's not just marketing anymore — it's operational integration. The influencer becomes a de facto co-founder in some cases. Lucas: And that's where it gets tricky. If the influencer has equity and a board seat, they have fiduciary duties to the company. That means they can't just promote any product — they have to act in the best interest of the company. It changes the nature of the relationship. Luna: And it also raises questions about exclusivity. If an influencer owns equity in a skincare brand, can they also promote a competitor's product? Most equity contracts include a non-compete clause, but the scope and duration vary widely. Lucas: I've seen one contract that prohibited the influencer from promoting any other brand in the same category for the entire vesting period — four years. That's a huge commitment. But in exchange, she got a 7 percent equity stake and a guaranteed minimum annual fee of $500,000. Luna: So the cash component is still there. I think the pure equity-only deal is rare. Most of these are cash plus equity. The cash covers the influencer's immediate needs, and the equity is the upside play. Lucas: And I think that hybrid model is going to become the industry standard for top influencers within the next 18 to 24 months. We're already seeing it in the contract templates that major talent agencies are using. Luna: If today's episode gave you a useful framework for thinking about your own brand partnerships or your career, one way to keep these conversations ad-free and independent is through listener support. We don't run ads on Fexingo Business — it's funded directly by people who find value in it. Lucas: Yeah, it's a pretty simple model. If you've gotten something out of shows like this, you can contribute at buy me a coffee dot com slash fexingo. That's buy me a coffee dot com slash fexingo. Even a small one-time contribution helps us stay focused on the substance rather than chasing sponsors. Luna: And we genuinely appreciate it. It's what allows us to dig into niche topics like equity structures without worrying about ad revenue. Okay, back to the trend — I'm curious, Lucas: do you think equity deals will ever trickle down to nano-influencers with, say, 10,000 followers? Lucas: I think it's unlikely in the near term. The legal and administrative costs are too high for a deal that small. But the Collab Equity Fund model I mentioned earlier could be a workaround. If an agency pools the equity from multiple brand deals and distributes it to all their influencers — including nano-influencers — then the individual grant size is small, but the aggregate is meaningful. Luna: So the agency becomes a kind of equity aggregator. That's an interesting business model in itself. They take a percentage of the equity as their fee, and the rest goes to the creators. Lucas: Exactly. And some agencies are already doing that. They're essentially becoming venture capital funds that invest their talent's promotional power in exchange for equity. It's a shift from a service model to an investment model. Luna: That's a big structural change for the influencer marketing industry. It's moving from transactions to long-term partnerships with real ownership. Lucas: And it means that the best creators are no longer just marketing channels — they're de facto shareholders. That changes how brands think about their marketing spend. A dollar spent on an influencer with equity isn't just a cost — it's potentially building an asset. Luna: So the big question is: will the top 100 influencers in the U.S. have equity in at least one brand they promote by the end of 2027? I think the answer is yes. Lucas: I'd take that bet. And I think the ripple effects will be huge — from how agencies are structured to how brands raise funding. If a brand can get a creator with 10 million followers to take equity instead of a $2 million cash fee, that's a huge saving on the income statement. But it's a big bet on the balance sheet. Luna: It's a fascinating evolution. And we'll be watching closely to see how these contracts perform as the brands mature — or fail. Lucas: For now, it's one of the most dynamic areas in influencer marketing. And we'll keep you updated as the numbers come in.