A Former Facebook VP Thinks Investing in Humans Is the Future of VC

She gets $1.7 million. Sam Lessin’s venture firm gets 5% of her creator earnings for 30 years. “it's def not indentured servitude,” he says.
November 12, 2021, 2:00pm
Sam Lessin
Sam Lessin (Photo by C Flanigan/Getty Images

For decades now, Sam Lessin has been ruminating on an idea: What if instead of investing in companies, you could invest in people? What if Lessin could apply the venture capital model to human beings, allowing talented young thinkers to exchange traditional debt for freedom? 

When he first tried as a young man to create a company based around this idea near the turn of the century, he admits, the world was not ready for such a proposal. “People thought I was complete loony,” Lessin told Motherboard over Zoom. So in the intervening years, he worked at Bain and Company and co-founded two tech startups, one of which was acquired by Facebook in 2010, after which Lessin became vice president of product management at Mark Zuckerberg’s tech giant, and then a venture capitalist. 

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But he couldn’t entirely shake the idea. And as the creator economy began to evolve into a real industry in recent years, he saw his chance to put his idea into motion. Earlier this year, his venture firm, Slow Ventures, set aside $20 million to invest in creators themselves. Now the firm has gone and done it, joining a few individual investors in spending $1.7 million in the future of Marina Mogilko, a 31-year-old YouTube personality with multiple popular channels that touch on topics like life in Silicon Valley and learning new languages. (Slow Ventures is also investing in “serial entrepreneurs” like the Liberman siblings, at least two of whom are coincidentally individual investors in Mogilko.)

The decision to invest directly in humans brings about a host of legal, ethical, and moral questions that Lessin will surely need to confront head-on. The idea that someone might sign a 30-year employment contract and that society should explicitly value a human brings up questions of indentured servitude and worse—claims which Lessin sees as entirely ill-founded. (“it's def not indentured servitude,” he recently wrote in response to someone who said the legal issues seemed “daunting.”) He believes that he is setting society on a path where we are free to invest in our favorite humans through multiple venture rounds, providing young, brilliant people with the money to fund a path to success that doesn’t exist today.  

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Marina Mogilko, a 31-year-old YouTube personality, has agreed to give Slow Ventures 5 percent of her creator earnings for 30 years in exchange for $1.7. million now. (Credit: Marina Mogilko)

Mogilko is free to do whatever she wants with the money, which she received right away, she told me. “This is the Silicon Valley approach to investing in people,” Mogilko said. “Here in Silicon Valley,  people are just betting on you to become the next unicorn, and they don't want to control your journey.” In exchange, Mogilko enters into what Lessin described as a “career-long deal,” forking over 5 percent of her creator-related earnings for the next 30 years, plus a percentage from any IP she develops, even beyond that three-decade timeline. (As Mogilko explained it, “If I wrote a book in 2030, and it's still selling in 100 years or whatever, they're still getting 5 percent of that revenue.”)

Do you work in venture capital or private equity? Using a non-work phone or computer, you can contact Maxwell Strachan securely on Signal at 310-614-3752 or email maxwell.strachan@vice.com.

There are a few notable caveats. Slow Ventures and its fellow investors don’t start taking back a percentage unless she’s making good money—in the range of  “hundreds of thousands of dollars,” Lessin told me, adding that number will adjust with inflation as well.  (“We don't want to make this a burden to people who can't afford it,” Lessin said.) And the investors only get a percentage of the money she earns as a creator, which leads to some squishy definitional questions, best explained to me like this: If she decides to become a lawyer or flames out, she can take the $1.7 million with her, no questions asked. But if she gets a Netflix deal or a job with YouTube related to the creator economy, she still forks over 5 percent.

Evaluating the value of a single human sounds like a difficult—and at least somewhat morally questionable—task. I asked Mogilko if it felt odd to have a valuation on her. “It is weird. People are like, ‘What? You have a valuation now?’” she replied. But Lessin argues it’s not so different from valuing young startups, which often change early on so much and so often that “you’re primarily investing in the person or team anyway,” Lessin recently wrote on the tech website The Information, which is run by his wife Jessica Lessin. “All we’re doing is making that explicit.” 

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I wondered how such a negotiation works between a sophisticated venture firm and a single human. Mogilko told me she didn’t have an agent negotiate on her behalf, instead speaking directly with Slow Ventures. “I want my investors to be happy,” Mogilko told me. “They want me to succeed.” Lessin told me that “negotiation” wasn’t even the correct word to use when I asked him about the back and forth between the two of them. 

“It's more like collaboration and figuring out what's fair and what makes sense,” he told me. “We're all trying to solve for the same shit, right? Let's just call it a structure that we can use but then importantly, that's actually going to scale and like work for other people too.”

It’s not hard to understand why Slow Ventures would be interested in investing directly in humans, especially considering what’s taking place within the broader venture industry, which is overflowing with money and players competing to invest in the next hot startup. Some firms are struggling to figure out where to place bets, “racing to pay more to buy smaller pieces of startups that are less profitable than before,” as TechCrunch recently noted.   

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“I don't like competing for deals. I think that's stupid,” Lessin told me. “If there's a bunch of people willing to write the same check, then you're just a participant in an efficient market. Like, who cares? Real venture capital’s job right is to go find new opportunities for deploying capital, which, by the way, means new opportunities to aid people and help them grow.”

Many firms have already moved toward investing in “creator-focused start-ups,” as the New York Times put it in July, which do everything from help influencers build out product lines to manage their money.  But Slow Ventures is betting that by applying the venture model directly to hundreds of humans, they will be increasing their odds of betting on the next Jeff Bezos before he or she gets rich. “Doing Marina as a single deal doesn't make a lot of sense. She knows that. And we know that,” Lessin said. “What does make sense is working with people early to get the template right, so that we can do thousands of people.”

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When Mogilko first heard about the idea, she wasn’t sure it would be right for her, but she realized she could use the funds to “focus on something bigger” than brand deals. (Credit: Marina Mogilko)

When Mogilko first heard about Lessin’s idea, she said, she wasn’t sure it would be right for her. She was already doing well for herself, making money through her YouTube videos, language-learning companies, and a $475 course on how to start a YouTube channel. Lessin could understand the hesitation. “It's tough to be first,” he told me. “It's new and novel and weird. So it's hard to get people across the line understanding not only is it a good idea but it practically is quite doable.”

Lessin said creators should ask themselves if his firm’s money could help them raise their earnings by more than 5 percent over their career. To make a decision, Mogilko created a model in which different scenarios played out: one in which she stopped producing content; a second in which she continued to grow at the same pace; and a third where she became a huge success—Netflix deals, books, the whole shebang. “We gave probabilities to every scenario. And then based on that, we projected cash flow, and just came up with a number,” Mogilko said. 

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She realized that she could use the upfront venture funds to “focus on something bigger” than the next slate of brand deals. Mogilko wasn’t exactly sure how she’d use the money, and she admits she’s figuring it out as she goes along, but she has already started to use the cash to invest in five startups related to the creator economy and would love to invest directly in other creators, just like Slow Ventures invested in her. (She knows there’s a lot of “work to be done” before she can do that, but she told Motherboard she’s working with people who hope to make it “possible with crypto.”)

Along the way, Mogilko realized that investing in humans was something she believed in morally as well.

 “I also wanted to be one of the first people in this movement, because I truly believe that, in the future, we'll be able to invest in our favorite people, creators, entrepreneurs, and back them before they become big,” Mogilko said. 

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Mogilko sees herself as part of a movement. "I just believe in this new world, and I want to prove that it should exist," she said. (Credit: Marina Mogilko)

Should Mogilko’s deal be the start of a movement, Lessin knows he can probably expect some opposition down the line. Even in the comments of his own post on The Information, Lessin found himself needing to defend his idea. When a self-described “former lawyer” said he was reminded of “something about ‘badges and incidents of slavery’ and the Anti-Peonage Act,” Lessin replied, “this is the very opposite of slavery.” 

“I’ve been told by people that this is slavery for literally 20 years. I'm not actually exaggerating on that, and it's just not,” he told me. “I mean, the U.S. obviously has a very particularly terrible history with this, which I think [makes] people particularly sensitive to it, but at the end of the day … a deal where I give you capital, where you don’t have to pay me back at all, unless you crush it, and I helped you contribute to that—I don't control what you do, I don't control anything—is the opposite of indentured servitude or slavery.”

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Lessin said the 30-year length of the contract was a result of him trying to create the best deal for the creator, in that a longer contract allows Slow Ventures to give them the most money possible upfront without needing to take a larger percentage of future earnings. “Now, in my honest perspective,” he added, “I would rather the deals be forever.” The reason is what he called “the Jeff Bezos problem.”  “The only thing that really fucks this up is if you end up investing in Jeff Bezos, but then instead of ever selling his stock, Jeff Bezos just borrows forever, so there's never a return. And because there's never a return, you are right, but you still don't get paid. And that's the only thing you have to avoid as an investor,” Lessin explained. 

By applying the venture model to humanity, Lessin believes he might have stumbled into the solution to one of society’s longest-standing and most burdensome issues: debt. “It's so fucked that young people have all the equity value—because they’re the ones that are gonna do the work, provide for the future, they have all the future potential—but they don't have any of the cash,” Lessin said. “They’re totally disadvantaged versus the boomers who are old and increasingly doing nothing but have all the money. It's completely socially imbalanced.”

Lessin thinks applying the venture model is a “super powerful” idea, allowing talented young people to obtain upfront venture financing and grow their careers and invest in one another instead of operating off of their cash flow or entering into contracts to take on debt.  “Debt, you need to get repaid. Because the model is predicated on really getting repaid,” Lessin said. “VC, the model really is … 80 percent of things are write-offs, 20 percent work, and then 5 percent drive everything.” He envisions a world where there will be a “full capital ecosystem for this type of investing for sure,” complete with multiple rounds for the next hot human. 

“It's just so obvious that you need effectively what we're providing to make this ecosystem work,” Lessin said. He knows he’ll sound crazy to some people, but he doesn’t seem to care. “Honestly, if you don't start with the majority of people thinking you're crazy, [what you’re working on is] probably not very important,” Lessin said. “This is not for everyone. If you don't like it, then don't participate. No one's forcing you to do this.”

Lessin said Slow Ventures is close to finishing up the paperwork with more people it will be investing in, hoping one of them becomes the next Jeff Bezos or Elon Musk or Kim Kardashian. I couldn’t help but wonder if Bezos would have regretted signing away a percentage of his earnings back in 1995, before Amazon became the economic powerhouse it is today. (“Maybe, but probably not," Lessin said, somewhat unprompted.)

I asked Mogilko if she was at all concerned that she will become the next Bezos and regret signing over 5 percent of her income to a venture capital firm. “For me, this will be the proof that the model works,” she replied. “And it means we can invest more and more in people as well. I just believe in this new world, and I want to prove that it should exist.”