Ric Elias: The Secretive Media Billionaire
GM! It's Tuesday, March 14th - Today, we're covering how SVB was the fastest banking collapse in history, the rise of Red Ventures - the biggest digital media company that you've never heard of, and strategies to extend your startup's runway.
Ric Elias: The Secretive Media Billionaire
After a close brush with death in 2009, Ric Elias found a new lease on life and transitioned his traditional marketing agency into the largest digital media company in the United States.
What's The Business?
Red Ventures (RV) owns 100+ of the most recognized brands on the internet. They pull in 750 million+ monthly site visits and generate ~$2 billion in annual revenue.
If you've heard of Bankrate, CreditCards.com, The Points Guy, Reviews.com, or CNET - then you're familiar with just a few of their brands.
In fact, a shocking 60% of Americans interacted with a Red Ventures brand every month.
How Do They Make Money?
In short, they're really good at selling other people's stuff. Take a look at their evolution:
Red Ventures 1.0: It started by partnering with old-school companies like DirectTV, ADT Security, and Sirius Satelite Radio.
They'd use their digital advertising know-how to create high-converting ads and send millions of leads to their team of hundreds of inside sales experts who would close them. In return, RV would get a commission on the sale.
In 2008, the company generated over $250m in revenue from this strategy.
Red Ventures 2.0: RV realized that if they owned the media sites, they could work in coordination to track and move consumers down a purchase funnel and into a buying decision. Take a look at one way that could work:
- While reading a CNET article, a consumer sees an ad on how to get a free vacation by signing up for a credit card.
- After clicking through to The Points Guy website, the consumer wants to check that the advertised credit card is legit.
- This consumer then goes to Bankrate for a credit card comparison and feels validated.
Unknowingly, this consumer has clicked through to various websites, all owned by Red Ventures, and flowed down its purchase funnel.
If they purchase a credit card, Red Ventures could make ~$300-$900 in affiliate fees from the credit card companies.
1) Find High-Ticket Affiliates: RV started by partnering with high-ticket affiliate companies like credit card providers and energy services that would pay them a small commission for any incremental sales they could generate.
Over time, the company developed proprietary technology that enabled them to customize advertisements to the specific end user. This dramatically increased conversion rates.
2) Buy The Distribution: Because they could convert buyers better than anyone else, a lead was now worth more to them than anyone else.
Because of this, it made sense to start acquiring undervalued digital media properties to drive millions of visitors into their sales funnel.
This is why they acquired Bankrate for $1.24 billion.
3) Rinse, Repeat, and Evolve: RV continues to run this playbook and acquires some of the largest digital media properties across their high-ticket verticals like consumer finance, energy, and education.
TOGETHER WITH ETHICSTREAM
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Why is the carbon market so important?
On top of major brands, 190 countries have made similar commitments to lowering carbon emissions, and they’ve backed it up with legislation.
- SEC is pushing for all public companies to publicly disclose their emissions
- Canada implemented a tax on carbon emissions
- California plans to ban sale of gas-powered cars by 2035
- Congress has been pushing $400B toward slashing emissions
- EU is putting 30% of its overall budget towards climate change
The entire world is in on this and they all need carbon credits that actually remove carbon from the atmosphere. Most credits do not perform as advertised.
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NEED TO KNOW
The Fastest Collapse In History
On Monday, bank stocks globally plummeted despite President Joe Biden's assurance to guarantee the safety of the U.S. banking system. This occurred after the collapse of Silicon Valley Bank and Signature Bank - two of the largest banks in the country.
You Need To Know:
- The fall of Silicon Valley Bank was the fastest in history, largely due to Twitter-induced panic.
- Many VCs and founders stoked panic on the platform, later deciding to delete their posts.
- "Tech is obsoleting the current regulatory structure," a former regulator said.
Get the full story here.
How To Slow Down Your Burn Rate
You should know:
Leo Polovets, the co-founder and general partner of Susa Ventures, recently published a blog post detailing cash management lessons that he’s learned from working with 200+ startups.
Polovets’ lessons fall under what he calls the ARGO framework: Acquire More Cash, Reduce Costs, Grow Revenue, and Optimize Operations. For each of these four categories, Polovets provides some in-depth insight.
- Acquire more cash: Take full advantage of all startup tax credits with services like MainStreet or Neo.tax.
- Reduce costs: Eliminate dead time; don’t hire a front-end engineer months before one is needed
- Grow revenue: Bring revenue forward by prioritizing clients who can pay you sooner
- Optimize operations: Optimizing operations is all about experimentation; invest small amounts in different advertisement campaigns to learn which works best.