George Clooney and his association with Casamigos tequila, Kylie Jenner’s empire built through Kylie Cosmetics, and Jay-Z’s creation of Tidal have become emblematic of how fame can be transformed into formidable business ventures. These names serve as glittering examples that illuminate why celebrities and digital influencers often find the concept of brand building irresistible. The allure lies not only in creative control and personal legacy but also in the possibility of an extraordinary financial windfall. At its most successful, the journey concludes with a celebratory moment marked by a colossal payout—sometimes reaching nine-figure sums—and, for a select few, the coveted status of billionaire entrepreneur.
However, those who aspire to follow a similar trajectory should approach with caution. The so-called founder mindset, though enticing, carries substantial risk. The same fame that amplifies a product’s exposure can also camouflage the structural weaknesses of a business built more on personality than on long-term market strategy. Many creators who embark on the entrepreneurial path discover, often to their dismay, that fame alone does not guarantee financial stability. Some ultimately walk away empty-handed, a stark contrast to the success stories often spotlighted in headlines.
Scott Van den Berg, founder of the venture capital firm HotStart VC—which specializes in investing in influencer-driven brands—articulated this reality succinctly in an interview with Business Insider. In his estimation, an overwhelming ninety-seven percent of celebrities and creators should refrain from launching their own companies because they lack the depth of audience engagement necessary to sustain or scale a billion-dollar enterprise. In other words, fame is not synonymous with influence powerful enough to command consumer loyalty.
Nonetheless, the trend persists. Influential digital figures such as MrBeast and Emma Chamberlain have entered the entrepreneurial arena, each attempting to transform personal brand power into tangible products. The formula they typically follow is relatively straightforward: unveil a brand, leverage their massive online followings to generate buzz, watch the product soar in popularity, and ultimately aim to profit through a sale or initial public offering. This cycle reflects not only ambition but also a desire for autonomy—the craving to possess rather than merely promote, to be an owner instead of a temporary partner in someone else’s success story.
Eric Bogard, CEO of UnderCurrent Management, a talent agency representing digital creators, attributes this phenomenon to what he calls “creator anxiety.” Many influencers, dependent on advertising revenue and short-lived brand deals, grow uneasy about the volatility of such income streams. Establishing an independent business feels like the antidote—an opportunity to control their destiny rather than rely on shifting corporate sponsorships. Yet, self-reliance in business can reveal its own complications.
For instance, consider Logan Paul and KSI, two of YouTube’s most recognizable personalities, who co-founded Prime Hydration. Within its inaugural year, the beverage experienced a meteoric rise, achieving extraordinary sales and near-cult status among younger audiences. However, its trajectory also illustrates how swiftly public fascination can fade. After early triumphs, the brand began to falter in various markets, becoming a cautionary tale for other creators tempted by entrepreneurial glamour. Prime’s rapid ascent was spectacular, but maintaining that momentum proved far more difficult.
Through years of reporting on both flourishing and failed influencer enterprises, a clear insight has surfaced: entering “founder mode” is not always the wisest choice. Many industry veterans now recommend that creators focus on securing immediate and predictable returns—such as royalties or commission-based arrangements—rather than wagering their careers on uncertain equity holdings. Bogard succinctly frames this calculation as an equation every creator should run: is the potential value of equity realistically ten times greater than what could be earned from a straightforward paid endorsement? His advice promotes balance—a thoughtful mixture of ownership stakes and performance-based royalties that safeguard income while keeping some upside potential.
He offers the example of Landon Bridges, a comedic food influencer who introduced Lava Sauce, a hot sauce brand launched in collaboration with Bogard’s own product incubator, Viral Goods. While Bridges held a partial equity position, his primary income derived from per-unit royalties, ensuring he benefited directly from every purchase. When the influencer later announced that six hundred bottles sold within forty-eight hours—propelling Lava Sauce into Amazon’s top ten hottest condiments—the achievement translated not only to social media bragging rights but also to genuine financial reward.
Prime Hydration, on the other hand, highlights the pitfalls of relying solely on equity. According to court documents, the drink generated approximately $1.2 billion in sales during its first full operational year in 2023. For a time, it was nearly impossible to find on store shelves, and even an informal resale market emerged among school-aged consumers eager to trade colorful bottles for profit. Yet, as impressive as this commercial explosion seemed, co-founders Paul and KSI reportedly received no royalties, instead holding equity stakes. KSI’s team, Proper Loud, is said to have controlled about twenty-five percent of the company. Such a structure holds enormous potential if the company goes public or is acquired, but until that uncertain day arrives, liquidity remains elusive. The founders might have received some financial relief if they privately sold a portion of their shares, but such details are unconfirmed.
Over time, the once unrelenting momentum behind Prime began to lose its intensity. Sales figures from 2024 suggest a steep decline of about seventy percent in the United Kingdom—a cornerstone market representing more than a tenth of total sales the previous year. Court filings attribute the downturn to waning social media enthusiasm and a series of legal entanglements that dimmed consumer confidence. This downturn underlines a well-known industry truth: when an influencer-driven brand loses cultural traction, its decay accelerates. As Van den Berg observes, once the novelty fades, creators often divert their attention toward more immediately profitable ventures, allowing their brands to wither. The history of failed celebrity endeavors—from Arielle Charnas’ defunct fashion line Something Navy to Addison Rae’s discontinued Item Beauty—demonstrates the ephemeral nature of public enthusiasm.
Standing in contrast to founder ventures are traditional sponsorship arrangements—the backbone of the influencer economy. These partnerships operate on a simpler premise: a creator promotes a brand via social media platforms such as Instagram or TikTok in return for a predetermined fee. Though this model lacks the thrill of ownership or the potential for exponential profit, it provides steadiness and has proven resilient over time. In fact, data from marketing firm Linqia indicates that a vast majority of marketers, roughly eighty-four percent, prefer collaborating with influencers through paid content rather than joint product creation.
Historically, another hybrid approach predates today’s influencer culture and has yielded legendary commercial success stories. Icons such as Michael Jordan and George Foreman leveraged endorsement deals that blended compensation with profit participation. Rather than simply collecting a one-time paycheck, they earned a share of product sales—the Air Jordan sneakers or the iconic grill—transforming endorsement into enduring wealth. This middle path offers creators the best of both worlds: consistency from paid deals and upside potential through performance-based arrangements.
Bogard advises modern influencers to emulate such balance. Guaranteed payments from traditional sponsorships, he notes, sustain one’s business operations and “keep the lights on,” but when an influencer becomes financially secure and selective, they can judiciously pursue partial ownership in ventures they genuinely believe in.
A particularly illustrative example is TikTok star Alix Earle’s collaboration with Poppi, a soda brand. Earle was compensated not only with immediate payment for her promotional content and commercial appearances but also granted equity. When Pepsi later acquired Poppi for nearly two billion dollars, her stake converted into significant financial gain. Crucially, even if the acquisition had never occurred, her upfront pay ensured that her work was rewarded. This dual-structured agreement encapsulates a mature approach to influencer entrepreneurship—one that values both immediate earnings and long-term potential without succumbing to the all-or-nothing gamble of total equity dependency.
Sourse: https://www.businessinsider.com/why-influencers-celebrities-shouldnt-launch-products-prime-logan-paul-ksi-2025-10
