Ian Shepherd On Securing $50 Million To Amplify YouTube Creators’ Success

Ian Shepherd’s journey from a car enthusiast growing up in the UK to the co-founder of Electrify, a company that invests in and scales established YouTube channels, is nothing short of remarkable.

His passion for media and the evolving creator economy has led him to venture into unique territories, creating opportunities for content creators and shaping the future of media consumption. His venture has attracted funding from top-tier investors.

In this episode, you will learn:

• Ian’s journey from engineering student to media entrepreneur
• His experiences at large media companies and his shift to entrepreneurship
• The creation of The Social Store and Electrify
• How Electrify works and their approach to investing in content creators
• The future of Electrify and its impact on the creator economy

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About Ian Shepherd:

Ian Shepherd is the Co-Founder at Electrify Video Partners. He invests in and scales established YouTube channels, enabling content creators to maximize their full potential. He has raised $50m in funding and is keen to speak with ambitious channel owners who want to scale and diversify their businesses.

Ian also hosts the Business of Creators, a leading podcast for the Creator Economy, featuring creators, managers, investors, and unicorn entrepreneurs.

Ian has previously founded The Social Store, a pioneering consumer products and events business working in partnership with globally renowned social media stars. As part of this, he founded and sold a successful Amazon FBA business.

Ian has more than 20 years of commercial experience at the world’s leading media companies, including Disney, Universal Music, WarnerMedia, British Telecom, and King.

Ian is also a keynote speaker presenting at events such as Social Day, Brand Licensing Europe, Spring Fair, and the Influencer Marketing Expo, and is a regular guest speaker at London Business School and London College of Fashion.

Connect with Ian Shepherd:

• Crunchbase
• LinkedIn
• Bloomberg
• Twitter

Read the Full Transcription of the Interview:

Alejandro Cremades: Um, alrighty hello everyone and welcome to the dealmakerr show. So super excited with you know today’s guest because we’re going to be talking quite a bit about investing in content creators. You know how you value those companies what they think about. You know all of that good stuff and you know it’s definitely you know a bunch of different ways you know in which our guest has been raising money. You know for this very unique. You know, but again a really unique, um, you know business that they have in establish I’m very inspiring. You know journey host that he has so without farther ado let’s welcome our guest today. Yeah, shepherd welcome to to the dealmaker show. So originally british you grew up in the u k so give us a little a walkthrough memory lane. How was life growing up there.

Ian Shepherd:Thank you so much. It’s a pleasure to be here.

Ian Shepherd:Yeah, absolutely so I grew up in a small town in Kent in the Uk at the time I was really passionate about cars and so I was guided towards doing an engineering degree. Um, it was interesting. But after the first year or so I knew it wasn’t for me. I did a year in industry working for a big car manufacturer of voxel motors I was based in a factory in um, in one of the towns in the Uk and I was just so uninspired by this very traditional manufacturing environment and this was at the end of the 90 s so it was during the dotcom boom. And there was so much going on around that I wanted to get involved in that and so I completed my degree um in engineering but knew that engineering as a job wasn’t for me and um set my site and doing something a lot more commercial. Yeah.

Alejandro Cremades: Um, so then what happened what happened next.

Ian Shepherd:I yeah, so there were a couple of things that happened during my last year at university I started experimenting with websites and building websites using front page and I built a business called student madness which promoted club nights um student dance nights um in the local area. And had a bit of success with that and it was it was great fun and building an audience online and and monetizing it and gave me a sort of a paste of of commerce. So I completed my degree and then started work as a strategy consultant. And um, I worked for Deloitte consulting and I was lucky to work for a real host of different clients from investment banks to the government to public sector companies and um, but it was my time in the media industry. Um in a couple of roles I had in consulting that really inspired me um and ultimately led me to a career. Ah, working with media companies.

Alejandro Cremades: Um, I mean you’ve definitely you know, like been around the vlog when it comes to media companies. I mean you’ve worked with some of the biggest ones. Ah and you know the last one you know being Disney right? where you were the head of a new business development. You know there especially here very active in Europe. I guess you know as part of being you know part of of of those companies I mean some of those you know just to name a few you know we can say here warner music universal music british telecombola phone and then lastly Disney how was that the experience of being because now you’re a founder you’re able to really. Move super fast. You know during your time on these big companies I’m sure that you were able to secure any meeting that you wanted to secure but they perhaps a little bit tougher when he when he came to decisions because you know things go a little bit slower. You know when you have all that red tape and all the and say people that you need to approve. So. How was that like for you.

Ian Shepherd: Yeah that’s exactly right? So I was very fortunate. Um, as an example, universal music to work with some of the biggest artists in the world and as you say most recently at Disney working on amazing brands like star wars and Marvel and my role was very commercial. It was business development. It was identifying and building new revenue streams across the business and anybody would want a business with a meeting with Disney to to discuss and pitch their ideas to us and we were overwhelmed with with opportunities. Um, and I really loved meeting entrepreneurs and business owners to explore new ideas. Um, but what I would say is that 20% of my time is doing that really fun. New innovative work and 80% of the time working for a big global corporate business. Um, was selling that into the into that business and dealing with the legal team dealing with the finance team dealing with other sectors within the business and actually there’s just being so many roadblocks and because of um other agreements or. Politics of um, the way the businesses were run and it was just as an entrepreneur wanting to do things do new things really ground me down. So um, it. It came to a point where I recognized that having worked for a number of these different businesses. It was um, it was the same pattern reemerging and i.

Ian Shepherd: Had this sort of real entrepreneurial streak in me and wanted to to leave and do something new.

Alejandro Cremades: Um, so then what was that a new thing that came knocking.

Ian Shepherd: Yeah, so through my career I was very lucky to work with um, great brands and great musicians and great artists and what I could see happening was that there was this emerging creator economy where there was lots of talent on Youtube. In particular who in a similar way to a musician had assembled a very large audience around their craft. But unlike the music industry that had the record labels around it. There wasn’t that same structure around. Um these creators and I found it fascinating how they um, they operated their business. Um, but also saw a real opportunity to support them and help them in what they did and um when I was at Disney I wanted to learn more about the industry and how it was organized at that time and I reached out to a number of people and what became very clear was that it was a very new industry. Um. And there wasn’t much of a sort of a network or knowledge across it and so I I created ah a network inspired by by a very good friend who did something similar in a different industry I created something called the business of influencers and the business of influencers connected people in influencer marketing. Whether it was um, an agency or a brand or a content creator or their manager and I brought them together for the first time. Um, starting with dinners and then moving on to bigger events and through that I was able to see and understand what was happening and where some of the opportunities were.

Ian Shepherd: And that led me to launching a business called the social store and the social store took everything that I’d learned from universal museum and Disney and applied that to content creators in in particular focusing on consumer products and so we worked with some of the biggest creators. In the u k predominantly to sell consumer products and we had a number of different business models from drop shipping to licensed consumer consumer products to um retail. Um, and we had had a lot of success um launching products. Hosting events hosting retail events. The biggest event we hosted 20000 people turned up over one weekend to meet one of the celebrity creators we had working um and it was just really rewarding to be working with these creators and and a massive. Step change from where I’d been at big big traditional media organizations and and to give you just a sense of a couple of things that happened to me and really how I could see this evolution of media consumption changing the first was why I worked with um. Ah, very popular um child on Youtube celebrity child um in a uk and I brought my daughter along to the event to meet her. Um, and um to film some content and when my daughter went to school the next day everyone in her class had seen the video that she was in.

Ian Shepherd: And she was um, overwhelmed and and surprised that um everybody knew that she’d been with this content creator. But for me, it really told me and indicated to me that actually kids aren’t watching Disney and they aren’t watching Nickelodeon. They’re watching Youtube channels and these creators and and that story and presenting that to the retailers. Um, really um, changed their minds to understand okay and the tide has changed the second thing that really jumps out is being quite a memorable. Um, event um and reflective of the new media industry was in the the pop-up retail event I described where we had 20000 people on one weekend when I was at Disney um, we had a similar idea for a a Disney branded. Star wars store that we wanted to launch in the yeah uk and through the course of probably eighteen months there were various different proposals and and locations for this store. But ultimately the concept and the idea was rejected and the star wars store never happened. But the store I created with a content creator that whole process of having the idea finding the venue announcing the event and and having the event happened in the space of two weeks and it really showed to me. Um, just the difference in how.

Ian Shepherd: Quick and adaptable. This new media industry is okay.

Alejandro Cremades: Um, so for the social store. What what ended up being the outcome with the social store.

Ian Shepherd: Yeah, so it was ah it was a business that I learned so much through particularly working with content creators every day but it also being a product business was somewhat constrained and challenged by covid and disrupted by that some of that. Obvious revenue streams fell away which was disappointing and but we were able to create a very successful Amazon business. Um, that thrived during covid and and we ultimately sold that business. Um, after covid and um. It was a great journey to go on. It taught me a lot about working with some of the biggest content creators. Um and has guided me to where I am now.

Alejandro Cremades: Um, so then let’s talk about electrifying So how has the idea of electrify come knocking like because obviously you know it sounds like the creators you know like where you know your your your passion right? I mean the whole media thing something that you had been really involved with you know for quite a while.

Ian Shepherd: Yet.

Alejandro Cremades: But why electrify out of all things.

Ian Shepherd: Yeah, so electrify video partners as a business invests in and scales established Youtube channels and 1 thing I’d seen in working with these content creators every day was that they are entrepreneurs and business owners. And many of them had established these really profitable Youtube channels. Um, but they were 1 ne-man solopreneur businesses and many of these creators didn’t know how to scale their business. They didn’t know how to hire a team. They didn’t know how to diversify different revenue streams they didn’t know how to de-risk the business from themselves. Um, and that what I’d learned at Disney and what I’d learned at universal music was the whole idea of a three sixty degree business where you’re building not just a Youtube channel but a global media property and I saw this real opportunity in in. Um. As did my business partners in investing into content creators and so two and a half years ago I met with Owen and Justin who are the other two cofounders in electrify with me. Um, and we we saw this opportunity to invest and my business partners. Their background is private equity. And both of them have spent many years working at Kkr and so we have these very complementary skills that we believe come together to invest in and scale Youtube channels.

Alejandro Cremades: Um, and and and basically for for this for the business model of electrify. How do you guys make money.

Ian Shepherd: Yeah, great question. So it may surprise some listeners to know that Youtube channels are typically very profitable businesses and most Youtube channels in the first instance make money and make their income from the adsense revenue. Which is that advertising um the video advertising before the video or the video advertising in the video and um, there are hundreds of thousands of channels on Youtube making serious money. We believe that there are more than 50000 channels that are making more than $100000 in revenue and so the first revenue stream for any channel is um that adsense revenue. But then in addition to that there are many other incremental revenue streams. So in addition to the advertising that Google puts around a video. A Youtube channel owner is also able to do their own brand partnerships. They’re able to negotiate their own rates and so there’s almost like a double bite at the cherry where they have these 2 different advertising revenue streams and then in addition to that. Ah, channel owner can think about well how do I distribute the same content onto other platforms. Whether it’s Tiktok or Facebook or snapchat there are ways to monetize that content and then furthermore there are other opportunities around courses and podcasts and consumer products and um, we.

Ian Shepherd: As ah as a business invest into these channels and we either own the channel and and have those revenue streams or we are joint business owners with some of the channels. Um, and we share those. We share the profit in those channels.

Alejandro Cremades: So then I guess say for this, you know when it comes to content creators. What do they think about every day and and how do they organize themselves.

Ian Shepherd: Yeah I mean it is fascinating I am lucky to speak with content creators every day I’ve spoken to hundreds over the last couple of years with electrify and and there’s some really common themes that I see where typically ah these creators are obviously very proud of what they’ve built. Um, and they should be. They’re they’re very profitable businesses but the algorithms of the social media platforms typically encourage as much content as possible and so what I often see are these channel owners that are overwhelmed with opportunity. Um and the real. Bottleneck to the growth of their business and what so many of them really need is a team to help them grow their business and um, it’s really fascinating to learn where they are on their journeys the ambitions of what they’re trying to achieve and then what we really tried to do is marry up. Our strategy and align that with their ultimate goals and that could be a business partner um to grow the channel. It could be an exit of the business and an exit of the channel or it could be somewhere in between.

Alejandro Cremades: Um, now when it comes to for example, the um, you know, really evaluation of investing in those in those channels I mean how do you evaluate one of those channels. How do you price that you know that. 1 of those companies that you’re looking to to invest in which is one of those channels. Essentially.

Ian Shepherd: Yeah, so it’s it’s it’s a relatively new thing. The idea of investing into content creators and into channels and we take a very sort of standard approach. We look at the last twelve months revenue um and costs for the channel and which obviously leads to the profitability. Um, and we’re looking at. Valuing the business at a multiple of the profitability and this is sometimes a new concept for channel owners depending on how sophisticated they are um and just how they think about their business but we believe that this is a very consistent and fair approach that gives us um, an opportunity to. You know, invest in the channels at our fair market value and help them to grow the business. Yeah.

Alejandro Cremades: Um, so then in this case, you know I gave for for you guys when it comes to doing the diligence. What does the diligence look like when you’re looking at 1 of those companies and finally you price the deal and you know you’re ready to raw I mean what? what does that? What does that look like how do you What kind of diligence. What? what are you looking for? How do you verify things and make sure that you’re investing you know in something meaningful versus a black hole.

Ian Shepherd: Yeah that’s really important so we we trust that and believe that the Youtube adsense model um is a very fair and transparent way to pay creators and what we’ve observed over the last and two years in running this business and with creators running channels. More than 10 years is this very fair and consistent model in the performance of Youtube channels 1 of the first pieces of information that we request from channel owners is access to the data on their channels. So this enables us to understand how the channels are performing. Um, and how the channel has evolved and performed over time if there were any ah urbannoralities in that. So for example, were spike in views that could potentially trigger us to um, believe that something um, wasn’t quite correct. But um. Typically that that viewpoint of the channel gives us a really good understanding of how the business has grown from from nowhere and I think it’s it’s amazing to have access to the history of the data of a business at such a granular level and that’s the first thing that we think about. And then the second piece of information that we look at is really the p and l of the business so understanding the other revenues understanding the costs and being able to have a good clear picture of what the business looks like and for some channel owners. They’re meticulous and super well organized.

Ian Shepherd: For others. It’s It’s very poorly organized and um, often we’re having to help them piece together. What is an accurate reflection of the business Once we agree on um, the framework for a deal and evaluation. There is then um, a more complex and detailed level of due diligence. That’s done. Really understanding each of the different revenue streams and and feeling confident that everything is above board and has been um, managed accordingly.

Alejandro Cremades: Um, and day how much capital have you guys raised to date for this for electrify.

Ian Shepherd: Yeah, so we um, use both debt and equity to fund the different channels that we invest in and we’ve raised more than $50000000 to date um to invest into channels over a number of different rounds.

Alejandro Cremades: Um, so talk to us about debt versus equity for something like this. How does that work.

Ian Shepherd: Yeah, so I mean for the type of business that we have the debt providers are really trying to understand the consistency of the income and so as I’ve described the ah the performance of the channels on Youtube is relatively consistent. Um, and what we also see is that um the the library of content. The historical content does um have a real future value and so that helps us paint a picture um to the debt finances just in terms of. How we look at the channel and what we believe the future opportunities and revenue to be um and then that’s married with some equity um alongside it and I guess depending on the different. Um the the status of the channel and the business we’re investing in and the opportunities will. Depend on the exact mixed um that our partners um support us with.

Alejandro Cremades: Um, so when when now you know when when you have the money in hand and you’re ready to deploy I mean this is this a little bit different. You know than the typical investorors looking to investing in companies right? like going to the mldays going to the end so you know reading blocks for people. How. How do you find? you know those channels I mean and and and and what does a channel with the key Ingredients. You know that meets all the boxes for you guys. What does that look like.

Ian Shepherd: Yeah, great question. So there’s a couple of things we do. The first thing is really um, a lot of careful analysis in terms of the different channels on Youtube and how they’re performing and um, there’s some sort of key characteristics that we look for. In channels that are really attractive to us and so the first part is sort of some desk research using some tools that we pay for um and some additional data science that we layer on top of it to understand. Um the lay of the land and some channels that um look particularly attractive. And then the majority of the the discussions we have are outbound and proprietary source conversations where we’re we’re talking to creators. We’re reaching out to them and we’re explaining our business and how we can support them what I imagine to happen as the industry evolves is. You know, inevitably there will be more players in this space. Um, and there will be probably a bigger industry around what we do and as we as a business build our reputation um and invest into more channels then I would expect to see. More channel owners and approaching us about investment. Um and um, wanting to be part of the electrified business.

Alejandro Cremades: Um, and there’s now you know all types of of things and and I like to ask you about trends because I mean obviously Tiktok you know is now in the picture too. So where do you see things evolving and how do you see also electrify evolving when it comes to investing in content creators.

Ian Shepherd: Yeah, so what we like about Youtube is that the adsense revenue is a very transparent and fair way that the platform pays the creators for the content. What we’ve seen with these other platforms. Instagram Tiktok snap is that some of them. Have made some payments to creators typically as part of a fund um and they can be quite sporadic. Um and unreliable and unpredictable. However, there is this intense rivalry amongst the main platforms as we’re seeing with threads and Twitter at the moment and I believe that. So much. Um, advertising spend on the platforms. It’s inevitable that they’ll need to pay the platforms will need to pay the content creators. Um a fairer share for for bringing the audience and the advertising revenue to the platform and therefore we’ll see the likes of Instagram and Tiktok. Paying creators in a more logical and systematic way much like Youtube what that will mean is that there will be more creators earning more revenue and for us with our existing channels. It will be a way to monetize them and it will also open up the door for in the future electrify. To invest into creators on other platforms as well. So.

Alejandro Cremades: Um, so then in this case, you know imagine I mean incredible. The journey that you’ve had and and all these different companies that you’ve been able to set up and and the investments that you’ve been able to see because at the end of the day you develop pattern recognition too. No. You have the opportunity of getting into a time machine I put you into this time machine right now I bring you back in time I bring you back in time to that moment where maybe you were working at Disney still and you were wondering about a world in which you could branch out and become an entrepreneur imagine I put you into that Disney office. And give you the opportunity of having that discussion getting that ear whispering something to yourself and you’re able to give that younger self that younger Ian one piece of advice before launching a business. What would that be and why give me what you know now.

Ian Shepherd: Yeah, it’s a great question I think that the piece of advice that I would give myself is just to be more patient. So um, the journey of an entrepreneur is a real rollercoaster and um I’ve lived that for the last seven years um running

Ian Shepherd: Um, and co-founding a business and you can have some great wind and some real highs. But there’s also some real challenges and I think for me covid was a real challenge um in adapting and responding to something beyond the control of the business. Um. And and new opportunities and new deals come and go and in a deal-making scenario where we are now it can be quite frustrating when you think that there’s a great opportunity and it ultimately falls away. But if you kind of take a step back and reflect on how far we’ve come as a business and and I’ve come as an entrepreneur. Um, I’ve grown so much and the the toughest lessons and or the hardest times have been the toughest but the greatest lessons and um, a younger Ian you know is is running as fast as he can trying to make things happen but ah, a more experienced. Ian has has been more patient and um, thinking about the bigger picture and the long-term game that we’re playing here and there are so many um tailwinds of the creator economy new platforms supporting creators new ways of monetizing. Um. Creators that we’re working with new creators coming onto the platform I’m I’m so excited about where this industry is going and I know that and personally I just need to be very patient with what we’re building. Um and knowing that I’m going to learn a lot along the way and.

Ian Shepherd: And it it is um, it’s a roller coaster. But um, it’s it’s for me the the best roller coaster to be on.

Alejandro Cremades: Um, amazing So Ian for the people that are listening that will love to reach out and say hi where is the best way for the doing. So.

Ian Shepherd: Yeah, so I’m pretty active on Linkedin you can find me on there Ian Shepherd I’m also on Twitter I shepherd and check out our website electrify dot video.

Alejandro Cremades: Amazing, well easy novel Ian thank you so much for being on the deal maker show today. It has been an honor to have you with us.

Ian Shepherd: Excellent. Thank you so much for having me.

*****

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