Alternative Investment

MrBeast Wants to IPO MrBeast Burger and Feastables to Let the Little Guy Share in the Upside — This Alternative Might Be the Perfect Solution

Jimmy Donaldson, more prominently known as MrBeast, is a prolific YouTube philanthropist known for giving away millions of dollars. 

He has over 127 million subscribers, giving him one of the largest YouTube audiences in the world. 

His claim to fame, among other outlandish antics, is giving away large amounts of money — sometimes ranging in the millions. This is an expensive endeavor, so he has branched out into building companies like Feastables and MrBeast Burger to fund it.

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Donaldson started the Feastables brand primarily as a chocolate company, but it has since expanded into cookies, merchandise and more. MrBeast Burger is a ghost kitchen falling under the MrBeast umbrella that has since opened its first physical store in the American Dream Mall in New Jersey. 

According to some recent tweets, MrBeast laid out a brief plan for these businesses. 

The YouTube star noted he wants to build these brands “and eventually be able to sell parts of them for billions of dollars so [he] can give away billions in future videos.” 

The full tweet reads “I want to build Feastables, Beast Burger, etc. and eventually be able to sell parts of them for billions of dollars so I can give away billions in future videos. These next few years will be an interesting experiment haha”

But in a follow-up tweet, the star noted something potentially more interesting. 

He said he should launch an initial public offering (IPO) for the brands so everyday investors can “share in the growth” but held reservations it might “make life 2 stressful.” 

The full tweet saying “Maybe I should ipo Feastables and Beast Burger while they’re relatively small so you guys can share in the growth. Feel pretty confident we can easily 100x the rev we are doing But idk if that’d make my life 2 stressful or not haha”

Fortunately, an IPO is no longer the only way for everyday investors to invest in startups like Feastables and MrBeast Burger. The Jumpstart Our Business Startups (JOBS) Act went into effect on May 16, 2016, effectively allowing small businesses to raise investment funds from everyday investors and allowing everyday investors to invest in startups and share in the upside. 

These offerings take place through broker-dealers or equity crowdfunding portals like StartEngine and Wefunder, which generally helps ensure compliance with relevant securities laws and other regulatory requirements. StartEngine and Wefunder are the leaders in the space, each with hundreds of startups on their platforms. StartEngine also is accepting investments. 

This presents a massive opportunity for everyday investors. For example, MrBeast’s brands, along with MrBeast’s own YouTube channels have grown quickly. According to Social Blade, MrBeast had less than 30 million subscribers in February 2020. MrBeast was both the fastest-growing TikTok and YouTube channel of 2022, according to recent tweets posted on his channel. 

Once it becomes a $1 billion company, a lot of the upside might be gone. While McDonald’s Corp. has only grown 50% in the last five years, many venture capital funds try to invest in startups that will go from a Series A investment round to an exit in those same five years. The average startup valuation at Series A tends to hover around $20 million, so if a startup scaled to $1 billion exit from a Series A, that would be a 5,000% return.

Startup investing isn’t without its risks. Startups are illiquid so you can’t sell for a while and risky because they are traditionally smaller businesses and can go bankrupt easier. Wefunder describes these startup investments as “socially good lottery tickets” because you invest in companies you are passionate about or think support a good cause, so while many will be losers, you can still invest in ideas you support. But once you get one right, the upside can be huge.

On the founder side, this might be the perfect solution for MrBeast. While equity crowdfunding is still subject to heavy regulation, he could launch a Regulation A round and raise up to $75 million from his followers. This would allow his followers to share in the upside without the stresses of dealing with an ever-changing stock price five days a week and many of the regulations of being an insider in a public company.

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