
More Than $1.5K for 52 Seconds: How Young Influencers Are Racking Up Deals and the Company Behind It
JP Mangalindan is a senior contributing writer to dot.LA. His work has appeared in numerous publications over the last 18 years, including Bloomberg Businessweek, Fortune Magazine, GQ Magazine, Protocol, Entertainment Weekly, Mashable and Yahoo Finance. JP earned a bachelor's degree in journalism from Fordham University.
One afternoon in late January, New Jersey high school sophomore Alisa Kotlyarenko was wrapping up a dance team rehearsal when she received a phone call from someone at Promotely, a startup that matches influencers with brands and advertisers. Could she post a promotional video to her TikTok: a giveaway to her followers for an iPhone 11, a pair of Air Jordan 1 sneakers, and $100 in cash?
"Sometimes, they [Promotely] will just jump in, call, and be like, 'Hey, you need to do this and post this,'" explains Kotlyarekno. "That time, they said, 'You need to post that giveaway.' I was like, 'I've got this, guys. Don't you worry.'"
Kotlyarenko, who had already written out a draft of what she would say in the TikTok post two days before, shot and uploaded the post in five minutes, the end result being a snappy 52-second clip in which she hit all the major talking points.
For that one brief clip, Kotylarenko earned well over $1,500. It's par for the course for the 16-year-old social media influencer with 1.5 million TikTok followers, who, some weeks, juggles at least six influencer deals across her social media channels. She typically earns between $1,000 and $3,000 per post — an arrangement that has generated enough income for her to purchase a new car and a trip to Florida to visit a friend.
Kotylarenko is one of more than 10,000 influencers now using Promotely, a Santa Monica-based online marketplace for influencers operated by Mammoth Media that officially launched in January. Using a mix of website automation and work by bonafide humans, Promotely acts as a talent agency, of sorts, matching influencers with brands and advertisers looking to employ those influencers' significant follower bases to promote their apps and products.
The Promotely allows influencers to search for marketing promotions on their own or work directly with the app's staff.
The company is one of dozens of competitors trying to cash in on the influencer market. It has exploded, particularly during the pandemic, which spurred an ecommerce boom: the influencer market industry is now expected to grow to $15 billion by 2022 — up from $8 billion in 2019, according to Insider Intelligence using data from Mediakix.
As influencers developed huge followings on their social media channels, proving their content could persuade followers to purchase goods and download apps, brands and advertisers have increasingly sought to leverage influencers' clout to promote their wares. Firms and agencies like Creator IQ, Viral Nation and Branded Entertainment Network (BEN) have rushed to meet that demand, offering self-service and full-service solutions, with Promotely employing a hybrid model where influencers can search for marketing promotions on their own or avail of the team's more hands-on approach.
"I think ultimately the biggest challenge in the industry is finding the right influencer who just embodies the persona of a brand and reaches their customer, and it's also really thinking about who your client is hiring as the influencer," explains Lorianne Lacey, an influencer market expert with over a decade of experience and vice president of client strategy at InfluenceCentral, a firm that specializes in matching brands with influencers.
With Promotely, influencers can search and secure brand deals themselves through the platform's website and app, which will serve up brand offers, alongside the amount they'll earn per deal. They can also opt into a more full-service approach, frequently engaging with Promotely's team through phone calls, video chats and texts to facilitate deals and promotions. To track how their promotional posts are performing and whether they're hitting certain metrics, influencers have access to an analytics dashboard.
As influencers' social media clout has grown, advertisers have increasingly sought them out.
Promotely doesn't charge influencers who are on the platform, however it does take a small cut of the cost per install, or CPI, of apps promoted by influencers. It also offers a feature called TikTok Organic Growth, which charges brands a flat monthly fee for Promotely to manage their brands' TikTok profile to increase engagement and build awareness. Clients include cereal maker OffLimits, personalized show and reading recommendations app Likewise, and beverage startup Liquid Death.
"My vision was to enable content creators to see monetization upside so they can be rewarded for high-level engagement rather than just be treated as actors-for-hire," explains Vatere. "It has to be a win-win — not one-sided."
Promotely's efforts so far are unequivocally paying off. According to Vatere, Promotely is on track to generate revenues in the low eight figures in 2021. More than 10,000 influencers have joined the Promotely platform, over 1,000 of them have one million-plus followers.
Much of the credit for Promotely's existence can also go to Ozzy Marriott, a senior at Palos Verdes Peninsula High School, who helped start the platform and acts as a middle man helping broker deals between brands and influencers. For Marriott, navigating the relationship between brand and influencer around promotions is a give and take process. Advertisers may come to Promotely with expectations and requirements, and Marriott may approach several creators to test out a brand promotion on their behalf. If the promotions perform well, mission accomplished. If not, Marriott will rework the promotional strategy to achieve the advertisers' goals.
A significant portion of the job for Marriott also involves simply building and managing relationships with influencers so they use the Promotely platform regularly. With one influencer, Marriott spent more than six hours on FaceTime getting to know them, forming a rapport, and talking promotions and rates.
"I honestly don't remember what we were talking about exactly," recalls Marriott. "I just remember that we ended up talking for hours while I was in the hot tub about promos, rates and numbers. I really wanted to see how the influencer felt."
Ozzy Marriott, a senior at Palos Verdes Peninsula High School, helped start Promotely.Photo courtesy of Promotely
In influencers' money-laden wake, firms and Hollywood talent agencies like CAA, WME and UTA have all raced to sign or work with influencers. That includes stars like Dunkin' ambassador Charli D'Amelio, an influencer with 100 million TikTok followers who earns roughly $5 million annually and poached Greg Goodfried, UTA's former co-head of digital talent, to lead the family's influencer marketing efforts. Earlier this month, SAG-AFTRA announced it would also extend union protections to influencers, further legitimizing the notion of influencers as bonafide creators in their own right.
All of this bodes well for other influencers like Jeff Skinner, a junior in college and influencer in Dallas, Texas, who, with the aid of Promotely's wheeling and dealing, now earns $3,000 a month to regularly dole out financial advice through the TikTok account of advertiser Acre Gold — one of at least 15 or so different partnerships Skinner currently works on across different media channels. The income from Skinner's work has become so lucrative, his father is actually pressuring him to take a year off from college or drop out entirely to focus full-time on his influencer marketing efforts.
"I've been thinking hard about it — I have mixed feelings," says Skinner. "I have three semesters left until I graduate, so it's really hard for me to decide right now."
Skinner certainly doesn't have to make a decision any time soon, but it's an enviable position to be in, nonetheless.
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JP Mangalindan is a senior contributing writer to dot.LA. His work has appeared in numerous publications over the last 18 years, including Bloomberg Businessweek, Fortune Magazine, GQ Magazine, Protocol, Entertainment Weekly, Mashable and Yahoo Finance. JP earned a bachelor's degree in journalism from Fordham University.
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Though Silicon Valley is still very much the capital of venture capital, Los Angeles is home to plenty of VCs who have made their mark – investing in successful startups early and reaping colossal returns for their limited partners.
Who stands out? We thought there may be no better judge than their peers, so we asked 28 of L.A.'s top VCs who impresses them the most.
The list includes many familiar names. Dana Settle, founding partner of Greycroft, and Mark Mullen, founding partner of Bonfire Ventures, garnered the most votes.
Settle manages West Coast operations for Greycroft, a New York firm with $1.8 billion in assets under management. She is one of only nine of the top 100 VCs nationally who are women, according to CB Insights.
Mullen is a founding partner of Bonfire Ventures, which closed a $100 million second fund in September to continue funding seed stage business-to-business (B2B) software startups. Mullen has also been an angel investor and is an LP in other funds focusing on other sectors, including MaC VC and BAM Ventures.
Below is the list of the top ranked investors by how many votes each received from their peers. When there was a tie, they appear in alphabetical order according to their last name:
Mark Mullen, Bonfire Ventures
Mark Mullen is a founding partner of Bonfire Ventures. He is also founder and the largest investor in Mull Capital and Double M Partners, LP I and II. A common theme in these funds is a focus on business-to-business media and communications infrastructures.
In the past, Mullen has served as the chief operating officer at the city of Los Angeles' Economic Office and a senior advisor to former Mayor Villaraigosa, overseeing several of the city's assets including Los Angeles International Airport and the Los Angeles Convention Center. Prior to that, he was a partner at Daniels & Associates, a senior banker when the firm sold to RBC Capital Markets in 2007.
Dana Settle, Greycroft
Dana Settle is a founding partner of Greycroft, heading the West Coast office in Los Angeles. She currently manages the firm's stakes in Anine Bing, AppAnnie, Bird, Clique, Comparably, Goop, Happiest Baby, Seed, Thrive Market, Versed and WideOrbit, and is known for backing female-founded companies.
"The real change takes place when female founders build bigger, independent companies, like Stitchfix, TheRealReal," she said this time last year in an interview with Business Insider. "They're creating more wealth across their cap tables and the cap tables tend to be more diverse, so that gives more people opportunity to become an angel investor." Prior to founding Greycroft, she was a venture capitalist and startup advisor in the Bay Area.
Erik Rannala, Mucker Capital
Erik Rannala is a founding partner at Mucker Capital, which he created with William Hsu in 2011. Before founding Mucker, Rannala was vice president of global product strategy and development at TripAdvisor and a group manager at eBay, overseeing its premium features business.
"As an investor, I root for startups. It pains me to see great teams and ideas collapse under the pressure that sometimes follows fundraising. If you've raised money and you're not sure what comes next, that's fine – I don't always know either," Rannala wrote in a blog post for Mucker.
Mucker has a portfolio of 61 companies, including Los Angeles-based Honey and Santa Monica-based HMBradley.
William Hsu, Mucker Capital
William Hsu is a founding partner at the Santa Monica-based fund Mucker Capital. He started his career as a founder, creating BuildPoint, a provider of workflow management solutions for the commercial construction industry not long after graduating from Stanford.
In an interview with Fast Company, he shared what he learned in the years following, as he led product teams at eBay, Green Dot and Spot Runner, eventually becoming the SVP and Chief Product Officer of At&T Interactive: "Building a company is about hiring correctly, adhering to a timeline, and rigorously valuing opportunity. It's turning something from inspiration and creative movement into process and rigor."
These are the values he looks for in founders in addition to creativity. "I like to see the possibility of each and every idea, and being imaginative makes me a passionate investor."
Jim Andelman, Bonfire Ventures
Jim Andelman is a founding partner of Bonfire Ventures, a fund that focuses on seed rounds for business software founders. Andelman has been in venture capital for 20 years, previously founding Rincon Venture Partners and leading software investing at Broadview Capital Partners.
He's no stranger to enterprise software — he also was a member of the Technology Investment Banking Group at Alex. Brown & Sons and worked at Symmetrix, a consulting firm focusing on technology application for businesses.
In a podcast with LA Venture's Minnie Ingersoll earlier this year, he spoke on the hesitations people have about choosing to start a company.
"It's two very different things: Should I coach someone to be a VC or should I coach someone to enter the startup ecosystem? On the latter question, my answer is 'hell yeah!'"Josh Diamond, Walkabout Ventures
Josh Diamond founded Walkabout Ventures, a seed fund that primarily focuses on financial service startups. The firm raised a $10 million fund in 2019 and is preparing for its second fund. Among its 19 portfolio companies is HMBradley, which Diamond helped seed and recently raised $18 in a Series A round.
"The whole reason I started this is that I saw there was a gap in the funding for early stage, financial service startups," he said. As consumers demand more digital access and transparency, he said the market for financial services is transforming — and Los Angeles is quickly becoming a hub for fintech companies. Before founding Walkabout, he was a principal for Clocktower Technology Ventures, another Los Angeles-based fund with a similar focus.
Kara Nortman, Upfront Ventures
Kara Nortman was recently promoted to managing partner at Upfront Ventures, making her one of the few women – along with Settle – to ascend to the highest ranks of a major VC firm.
Though Upfront had attempted to recruit her before she joined in 2014, she had declined in order to start her own company, Moonfrye, a children's ecommerce company that rebranded to P.S. XO and merged with Seedling. Upfront invested in the combination, and shortly after, Nortman joined the Upfront team.
Before founding Moonfrye, she was the SVP and General Manager of Urbanspoon and Citysearch at IAC after co-heading IAC's M&A group.
In an interview with dot.LA earlier this year, she spoke on how a focus for her as a VC is to continue to open doors for founders and funders of diverse backgrounds.
"Once you're a woman or a person of color in a VC firm, it is making sure other talented people like you get hired, but also hiring people who are not totally like you. You have to make room for different kinds of people. And how do you empower those people?"
Brett Brewer, Crosscut Ventures
Brett Brewer is a co-founder and managing director of Crosscut Ventures. He has a long history in entrepreneurship, starting a "pencil selling business in 4th grade." In 1998, he co-founded Intermix Media. Under their umbrella were online businesses like Myspace.com and Skilljam.com. After selling Intermix in 2005, he became president of Adknowledge.com.
Brewer founded Santa Monica-based Crosscut in 2008 alongside Rick Smith and Brian Garrett. His advice to founders on Crosscut's website reflects his experience: "Founders have to be prepared to pivot, restart, expect the unexpected, and make tough choices quickly... all in the same week! It's not for the faint of heart, but after doing this for 20 years, you can spot the fire (and desire) from a mile away (or not)."
Eva Ho, Fika Ventures
Eva Ho is a founding partner of Fika Ventures, a boutique seed fund, which focuses on data and artificial intelligence-enabled technologies. Prior to founding Fika, she was a founding partner at San Francisco-based Susa Ventures, another seed-stage fund with a similar focus. She is also a serial entrepreneur, most recently co-founding an L.A. location data provider, Factual. She also co-founded Navigating Cancer, a health startup, and is a founding member of All Raise, a nonprofit that supports and provides resources to female founders and funders.
In an interview with John Livesay shortly before founding Fika, Ho spoke to how her experience at Factual helped focus what she looks for in founders. "I always look for the why. A lot of people have the skills and the confidence and the experience, but they can't convince me that they're truly passionate about this. That's the hard part — you can't fake passion."
Brian Lee, BAM Ventures
Brian Lee is a co-founder and managing director of BAM Ventures, an early-stage consumer-focused fund. In an interview with dot.LA earlier this year, Lee shared that he ended up being the first investor in Honey, which was bought by PayPal for $4 billion, through investing in founders and understanding their "vibe."
"There's certain criteria that we look for in founders, a proprietary kind of checklist that we go through to determine whether or not these are the founders that we want to back…. [Honey's founders] knew exactly what they were building, and how they were going to get there."
His eye for the right vibe in a founder is one gleaned from experience. Lee is a serial entrepreneur, founding LegalZoom.com, ShoeDazzle.com and The Honest Company.
Alex Rubalcava, Stage Venture Partners
Alex Rubalcava is a founding partner of Stage Venture Partners, a seed venture capital firm that invests in emerging software technology for B2B markets. Prior to joining, he was an analyst at Santa Monica-based Anthem Venture Partners, an investor in early stage technology companies. It was his first job after graduating from Harvard, and during his time at Anthem the fund was part of Series A in companies like MySpace, TrueCar and Android.
He has served as a board member in several Los Angeles nonprofits and organizations like KIPP LA Schools and South Central Scholars.
"Warren Buffett says that he's a better businessman because he's an investor, and he's a better investor because he's a businessman. I feel the same way about VC and value investing. Being good at value investing can make you good at venture capital, and vice versa," Rubalcava said in an interview with Shai Dardashti of MOI Global.
Mark Suster, Upfront Ventures
Mark Suster, managing partner at Upfront Ventures, is arguably L.A.'s most visible VC, frequently posting on Twitter and on his blog, not only about investing but also more personal topics like weight loss. In more normal years, he presides over LA's biggest gathering of tech titans, the Upfront Summit. Before Upfront, he was the founder and chief executive officer of two software companies, BuildOnline and Koral, which was acquired by Salesforce. Upfront backed both of his companies, and eventually he joined their team in 2007.
In a piece for his blog, "Both Sides of the Table," Suster wrote about the importance of passion — not just for entrepreneurs and their businesses, but for the VCs that fund them as well.
"On reflection of the role that I want to play as a VC it is clearly in the camp of passion. I really want to start my journeys only with people with whom I want to work closely with for the next 5–7 years or more. I only want to work on projects in which I believe can produce truly amazing change in an industry or in the world."
Lead art by Candice Navi.
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Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.
On this week's episode of the L.A. Venture podcast, hear from Chang Xu, partner at Basis Set Ventures, a $140 million fund focused on AI and automation - technology that transforms the way people work.
Basis Set Ventures focuses on four pieces: infrastructure, collaboration, automation and autonomy. Chang spends a lot of time on infrastructure, and she breaks it down into four themes: raise the ceiling, lower the floor, open space and data privacy.
By raise the ceiling, Chang says there's "always going to be better and more secure and faster fundamental building blocks for infrastructure to the tune of database systems and streaming data and...infrastructure as code."
Lower the floor is about no code and low code, which, for example, could allow for not-trained people to build their own apps without relying on software developers. Chang predicts a proliferation of tools that she says will enable "people to create regardless of their technical abilities and their starting point."
When I heard "open source" I figured she meant "free." But, Chang says, open source "is almost table stakes for how infrastructure is discovered, bought and sold today."
Lastly, Chang says they see "data privacy as a really large tailwind and emerging space" because it is tackling the challenge of adhering to privacy regulations, but at the same time innovating fast, while taking advantage of the growing amounts of data companies are amassing.
Chang and her partners aren't just stuck on tech, they're also keenly interested in what makes a lasting and impactful founder. She says her firm's research has revealed that "successful founders are humble operators, agile visionaries and seasoned executives. And the less successful founders...are passionate outsiders, overconfident storytellers and stubborn individuals."
This interview goes deep into machine learning optimization (ML Ops), what Chang learned from her many years at Upfront, like how to craft a good narrative and practical advice for startups on how to form a board.
Not incidentally, Chang is L.A.-based, though the Basis Set operates out of San Francisco.
Chang Xu is a partner at Basis Set Ventures. Previously, she was a principal at Upfront Ventures, the oldest and largest SoCal-based early stage venture capital firm. Prior to joining Upfront, she was a founder and operator. She was the first product manager at the Minerva Project. She co-founded and was the COO of Onion Math, an edtech startup in China that has raised $90 million to date. She started her career at BCG where she advised clients across technology, retail, healthcare and private equity. She holds an MBA and AB in Applied Math and Computer Science, both from Harvard. (bio from Basis Set).
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