This is a really good point, and I wanna use it to explain why equity is so important.

@secondbest_2

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Why it worked

The video provides high-value, educational business analysis on a trending celebrity topic, satisfying audience curiosity about how celebrity brands are actually structured.

Summary

The creator explains the importance of equity in business by analyzing the ownership structure of Hailey Bieber's brand, Rhode. She details how founders, executives, and investors are compensated and how equity aligns their incentives with the company's success.

Structure

1Introduction to equity using Rhode as a case study
2Distinction between celebrity-founded vs. celebrity-partnered brands
3Explanation of how equity aligns incentives for founders and executives
4Analysis of Hailey Bieber's potential equity stake in Rhode
5Conclusion on how equity dictates control and involvement

On-screen text

Rhode's equity structure Replay to raayyz's comment Hailey is the founder and the executive creator not only the face of her brand We're gonna use Rhode as an example There are cases where the celebrity isn't the person who comes up with the idea Emma grede famously approached Khloe kardashian with the idea for good american because she thought Khloe was the perfect partner Hailey originated the concept and was very involved from the very beginning Now, coming up with the idea is actually not the most important part Building a company takes years, if not decades. But the person who has the idea usually has the leverage when it comes to deciding how the company is structured, especially when it comes to equity! In Rhode's case, Hailey co founded the brand with Michael and Lauren Ratner Lauren is a seasoned marketing exec from Reformation and Farrynheight and Michael is the producer behind justin bieber's movie They then brought in an experienced operator, Melanie Bender, to be the founding CEO along with 3 main investors So now you have 3 co-founders, a founding CEO, and a few venture investors All of them have equity in Rhode in some form Later, when Melanie Bender left the company, Nick Vlahos came in as a CEO At that level, execs are usually compensated in both salary and equity, because equity is what aligns incentives Now, this is where it gets interesting RHODE IS GETTING ACQUIRED BY E.L.F. FOR $1 BILLION Hailey likely owned 40 to 50 percent, if not more than 50 percent of Rhode caveat: her ownership is unconfirmed And that's a very meaningful equity stake Equity matters because it determines how much you make in an acquisition, how motivated you are to get up every morning to put in the work, and how much control you have And when ELF acquired Rhode, they made sure to keep her on as a chief creative officer, compensated in both cash and Elf stock And this was a really smart move because she's a very strong asset to the Elf portfolio and this stock is what keeps her financially aligned So when people ask how involved is a celebrity in their brand? it really comes down to how much equity they own in the company A cap table is just a piece of document that shows who owns what percentage of the company I would love to see their cap table, but in most cases, it's private But make no mistake, because equity controls everything.

Original caption

Replying to @rraayyz while hailey’s equity stake isn’t disclosed, I’m willing to bet that it was pretty significant #equity #captable #rhode #haileybieber #cpg

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Transcript

This is a really good point, and I wanna use it to explain why equity is so important. We're gonna use Rhode as an example. There are cases where the celebrity isn't the person who comes up with the idea. For example, Emma Grede famously approached Khloe Kardashian with the idea for Good American because she thought Khloe was the perfect partner. But with Rhode, Hailey originated the concept and was very involved from the very beginning. Now, coming up with the idea is actually not the most important part. Building a company takes years, if not decades. But the person who has the idea usually has the leverage when it comes to deciding how the company is structured, especially when it comes to equity! In Rhode's case, Hailey co-founded the brand with Michael and Lauren Ratner. Lauren is a seasoned marketing exec from Reformation and Farrynheight, and Michael is the producer behind Justin Bieber's movie. They then brought in an experienced operator, Melanie Bender, to be the founding CEO along with 3 main investors. So now you have 3 co-founders, a founding CEO, and a few venture investors. All of them have equity in Rhode in some form. Later, when Melanie Bender left the company, Nick Vlahos came in as a CEO. At that level, execs are usually compensated in both salary and equity, because equity is what aligns incentives. Now, this is where it gets interesting. Wiley reported that before Elf acquired Rhode, Hailey likely owned 40 to 50 percent, if not more than 50 percent of Rhode. And that's a very meaningful equity stake. Equity matters because it determines how much you make in an acquisition, how motivated you are to get up every morning to put in the work, and how much control you have. And when ELF acquired Rhode, they made sure to keep her on as a chief creative officer, compensated in both cash and Elf stock. And this was a really smart move because she's a very strong asset to the Elf portfolio and this stock is what keeps her financially aligned. So when people ask how involved is a celebrity in their brand? It really comes down to how much equity they own in the company. A cap table is just a piece of document that shows who owns what percentage of the company. I would love to see their cap table, but in most cases, it's private. But make no mistake, because equity controls everything.