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Starfund

The Starfund Deal

Tuesday, May 5, 2020
The Starfund Deal
5
May

What does a typical Starfund deal look like?

We support companies that have an impressive product that has shown signs of finding initial market fit - that can benefit from increased visibility and credibility. In order for us to partner with a startup, we need to have a very clear vision of how they can significantly benefit from working with a celebrity.

Your specific deal may look differently but this is the basic template.

Deal Description

As a Starfund company you will be matched with a celebrity partner to promote your product.

Our services continue for a period that lasts 30-60 days following the signing of a deal with the celebrity. Typical deals with celebrities last 30-60 days as well but can be customized. During this time we manage the relationship and continue to support your marketing efforts.

The celebrity services you receive are priced as a reference, but you are never expected to pay cash for them. A typical deal comes with celebrity contributions that exceed $1M in value.

Both you and the celebrities must agree to work together for a deal to take place. Our deal is triggered once you close with your first celebrity.

In certain scenarios we request a revenue share option.

Sample Celebrity Services

The celebrity will typically commit to some of the following (which may vary by your specific agreement):

  • Allow you to disclose the nature of your relationship and their involvement with your company and product.
  • Provide you with rights to use their images, appearance, voice, name and other likenesses in certain areas such as digital, TV, physical marketing and etc.
  • Assign rights to created content to your company.
  • Attend a certain number of events.
  • Create pre-agreed content on a regular basis to promote your company and your product.
  • Participate in production sessions.
  • Personally use your product or service in a visible fashion that provides credibility.
  • Provide autographed versions of the product if relevant.
  • Use your product in a way that enables fans to interact with the celebrity.
  • Leverage their social presence to increase visibility for your company, product or service.
  • Maintain confidentiality where needed.
  • Avoid directly competing products for the term of the deal.
  • Collaborate with your company on creative ways to help achieve company goals.
  • Cooperate strictly with obtaining any celebrity approvals required in the agreement.
  • Where required (erring on the side of caution), the celebrity will always include a disclosure of the nature of your relationship while working together.
Starfund Returns

In exchange for our services and the services provided by celebrities and influencers we receive the following:

Pre-series A Companies

  • We estimate pre-series A companies to be valued at less than $10M. Deal terms may change if there is an external signal for a higher valuation.
  • Starfund and the celebrity partners share in warrants that are derived from the value of the services provided.
  • Starfund receives an option (which we usually exercise) to invest up to 25% in your Company's upcoming round as well as participation rights for future rounds. We do not lead rounds but our goal is to participate in every upcoming round so long as we are satisfied with basic requirements such as lead investor identity.

Post Series A companies

If there is a clear market signal that values your company at above $10M (usually, a round that values it as such), we create a custom deal for you that is based on that valuation.

Celebrity Compensation

Celebrity compensation varies and may include equity, financial benefits and / or revenue share or other.

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