Premoney 45: Swapstack 'takeover'
We're growing! We're raising! We'd love to work with you!
Hi all! Welcome to the 45th issue of Premoney. As promised in the last article, I’m doing a short ‘takeover’ about Swapstack and what the status of the company & our pre-seed raise are.
This weeks company
Company: Swapstack
Founders: Jake Schonberger (YT) & Jake Singer (The Flywheel)
Raise Details:
Raising $750k
$200k committed by Erik Torenberg, David Booth & existing Swapstack users.
Accepting small checks (ideally from other creators!)
Using an Angellist RUV: reach out for more details.
Vertical: Creators, Marketing, AdTech
Business Model: Marketplace, SaaS
1-Liner: Empowering creator marketing.
Description: See below!
Traction Indicators:
$300k in GMV ($$ earned by creators) since Feb, $600k GMV projected by EOY.
400+ creators (starting with newsletter writers)
6 Million aggregate subscribers
120 brands spending
3 person team
Deck: Set up a meeting to chat in further detail, and we’ll shoot over the deck!
Background:
TLDR Repeat warning: The Premoney List was the muse for my current full-time venture, Swapstack. Swapstack is a creator monetization platform, currently focused on enabling all newsletter creators to monetize their work through paid sponsorships.
Jake Singer (from the Flywheel) and I have been building Swapstack for ~8 months, and have seen enough validation via our current product to triple-down and raise a small pre-seed round to support our large vision for the platform.
The whole story: We’ve had quite a rollercoaster of a start-up experience to date, including an acquisition, a spinout, a few freakouts, and a lot of growth! Jake (Singer) wrote about our founding story in detail here. If you’re interested in learning the nitty-gritty background of how we got Swapstack up and running, check it out!
The vision: Unlock creator marketing for all
Creator & influencer marketing are channels that have just recently started to become part of a given brands average Media Mix Model (MMM), and thus a significant part of their marketing spend. $14B will have been earned by creators & influencers this year from sponsorships and other brand partnerships, and that number will grow as more creator tools enable individuals to expand their audiences. This is due to a number of factors, including:
The 3x engagement rate of a sponsorship through creators vs. a programmatic and social ads (FB, IG, etc)
Rising CAC on social & programmatic
Privacy updates (like iOS14) obliterating attribution and measurement.
All brands & marketers desire higher engagement & more impactful media to drive their business results. Jake & I personally know from experience that “content creators” - a subset of creators which includes newsletters, blogs, tweet threads, discords etc - speak to their audiences in highly engaged and highly trusted ways.
The marketers issue(s): You might ask why brands don’t just shift a larger portion of their budget to creator marketing asap. Check out the Flywheel article for a deeper dive, but the main issue that marketers & brands face when trying to work with creators. is time. It takes a crap ton of time to identify, reach out to, negotiate and manage sponsorships with creators.
Swapstacks vision is to eliminate most of that time needed to work with content creators at scale. Brands & media agencies log into Swapstack, tell us about the audience they want to reach, a budget, provide creative & copy, and the platform identifies a group of creators who fit their needs. The brands are off to the races, growing via highly engaged media, and the creators are turning their audiences into a revenue stream.
How we’ll get there: Right now, Swapstack is a marketplace that connects brands to newsletter creators. As we grow and better understand the specifics of how those interactions work, we’ll be converting the marketplace into a more turn-key solution to enable quick, scalable sponsorship deals. Our goal by the end of 2022 is to be a scaled, enterprise platform that enables marketers of all sizes to work with creators of all types.
The raise & goals:
We’re raising $750k to support our growth over the next year, get closer to proper PMF, and hit the following milestones by EOY 2022 :
GMV: $10M runrate (~$1M revenue run-rate on current model)
Monthly Brand Spend: $50k average brand spend.
Enterprise: Onboard our first 10-15 enterprise SaaS customers (media agencies and large marketing teams).
If you’re interested in learning more shoot me an email or set up time below!
Thank you all!!
Jake