Exercises: Acquisitions, Partnerships, and Creator M&A

Exercise 36.1: Business Valuation Modeling

Objective: Apply revenue multiple valuation methods to a real or hypothetical creator business.

Instructions:

Choose a creator business — either your own, a hypothetical one you design, or a publicly known creator whose revenue has been reported.

Build a valuation model using the following table format:

| Revenue Stream | Annual Revenue ($) | Multiple | Implied Value ($) | |---|---|---|---| | Ad/sponsorship revenue | | 2–4x | | | Subscription/membership | | 3–6x | | | Digital product sales | | 2–4x | | | Merchandise | | 1.5–3x | | | Total blended valuation | | | |

Then adjust your valuation with the following qualitative factors: - Growth rate premium/discount: +/- 20% based on whether the business is growing faster or slower than 30%/year - Creator dependency discount: -15% to -40% based on how dependent the business is on one person - Audience ownership premium: +10% to +25% based on owned email list size relative to social following

Write a 300-word memo explaining your valuation conclusions and what the seller would need to demonstrate to command the higher end of the range.

Exercise 36.2: Due Diligence Role Play

Objective: Practice both sides of a creator acquisition negotiation.

Instructions (pair or group exercise):

One person plays the seller (a creator who has built a $300,000/year YouTube channel and course business over four years). One person plays the acquirer (a media company making an initial offer of $750,000).

Seller receives this information package: - 4 years of revenue data (years 1–4: $40K, $110K, $220K, $300K) - 180,000 YouTube subscribers, 22,000 email subscribers - Email list open rate: 34%, click rate: 6% - Course business: $150K revenue, 80% from annual launch events - No contracts with contractors; everything done verbally - No trademark on the brand name

Acquirer must run through a 20-question due diligence checklist, identify three risk factors, and either adjust their offer or propose deal terms that mitigate each risk.

After the exercise, both parties write a reflection: What leverage did each side have? What information most significantly shifted the negotiation?

Exercise 36.3: Partnership Agreement Design

Objective: Draft a basic term sheet for a strategic content partnership.

Scenario:

A sustainable fashion creator (250,000 YouTube subscribers, growing) wants to partner with a secondhand fashion marketplace (500,000 email subscribers, not a content producer). They're considering a distribution partnership: the marketplace promotes the creator's videos to their email list; in exchange, the creator produces two exclusive unboxing/review videos per month featuring the marketplace's inventory.

Draft a partnership term sheet that covers: 1. Content deliverables (what each party provides, on what schedule) 2. Revenue arrangements (if any revenue sharing, define the split and payment terms) 3. Attribution and credit (how each party is credited in shared content) 4. Exclusivity provisions (is the creator restricted from similar partnerships with competitors?) 5. IP ownership (who owns the content produced specifically for this partnership?) 6. Duration and exit terms (how long does the agreement run? What does exit look like?)

Compare your term sheet with a classmate and identify the top three differences. Which version better protects the creator? Which better protects the marketplace?

Exercise 36.4: The Meridian Collective Decision

Objective: Apply M&A valuation and negotiation concepts to a complex, multi-stakeholder scenario.

Instructions:

Review the Meridian Collective's acquisition offer described in the chapter: $2.1 million from EsportsVault, with employment provisions that pay the four members differently ($80K Alejandro, $50K Priya, $40K Theo, $30K Destiny over 12 months).

Answer the following:

  1. The LLC agreement gives all four members equal ownership. The employment provisions pay them differently. Identify at least three specific negotiating points the Meridian Collective should raise before accepting.

  2. Priya wants to accept but Destiny wants to decline. The LLC agreement requires unanimous consent for major business decisions. What are the legal and relational dynamics at play? What are three possible resolutions?

  3. Design an alternative deal structure — not a full acquisition, but a strategic partnership — that would give EsportsVault significant access to the Meridian audience while allowing the collective to retain majority ownership. What are the terms? What does EsportsVault get? What does the Collective protect?

  4. If the Collective rejects this offer and attempts to improve their valuation over 18 months before going back to market, what three specific changes to the business would produce the largest valuation increase?

Exercise 36.5: Creator Acquisition Case Study Analysis

Objective: Research and analyze a real-world creator acquisition to extract generalizable lessons.

Instructions:

Research one of the following acquisitions (or find a comparable recent creator acquisition in your area of interest): - The Athletic (sports media) — acquired by The New York Times for $550 million in 2022 - Rooster Teeth — acquired by and eventually shut down by Warner Bros. Discovery - Morning Brew — acquired by Business Insider/Axel Springer - Tastemade — long-running creator-funded media company, various partnership/investment rounds

Write a 500–700 word analysis covering: 1. What the acquirer paid and what they were buying (distribution? Content? Team? Audience data?) 2. What the creators received and what they gave up (control, creative freedom, brand identity) 3. What happened to the audience post-acquisition — did engagement hold? Change? 4. What you would do differently if you were the seller in this deal

Exercise 36.6: Exit-Ready Audit

Objective: Assess how "exit-ready" your current or hypothetical creator business is.

Instructions:

Using the following 20-item checklist, score your business on each item from 0 (completely absent) to 3 (fully in place):

Financial readiness: - [ ] 24 months of documented, categorized revenue records - [ ] Clear separation of personal and business finances - [ ] All contractor and employee relationships documented in writing - [ ] Tax filings current and clean

IP readiness: - [ ] Brand name trademarked (or in process) - [ ] Clear ownership of all content in the library - [ ] Licensing agreements for any third-party content used - [ ] Written IP assignment agreements with any collaborators

Operational readiness: - [ ] Written SOPs for all recurring tasks - [ ] Business can operate for 30 days without founder involvement - [ ] All client/partner relationships documented in writing - [ ] Revenue not dependent on a single channel or platform

Audience readiness: - [ ] Owned email list with documented size and engagement metrics - [ ] Audience relationship partially transferable to brand (not only personal) - [ ] Community infrastructure (Discord, forum) that persists beyond any single post

Legal readiness: - [ ] Business entity properly formed and in good standing - [ ] All major agreements reviewed by an attorney - [ ] Non-compete exposure assessed (what's yours vs. employers/partners) - [ ] Succession or key-person plan in place

Calculate your score out of 60. Write a plan for the three lowest-scoring areas: what specific steps would you take in the next 90 days to improve those scores?