Sandwich, known for its commercials, looks to help younger startups in exchange for equity

Sandwich, an L.A.-based, 17-person outfit, has produced many commercials on behalf of tech companies over its 14-year history, including Square, Slack and Figma. Sometimes, it has taken equity in exchange for some of its work, too. For example, nine years ago, Sandwich founder Adam Lisagor starred in an ad that Sandwich made for a then-nascent Robinhood. The concept centered around an ’80s style Wall Street office; the equity in the brokerage outfit would later prove Sandwich’s biggest exit to date.

More so-called liquidity events could be coming. Lisagor says Sandwich has amassed 60 stakes altogether. Still, the outfit is looking to amass even more. Indeed, its newest pitch centers on working with undiscovered startups via what it describes as a new fellowship program where Sandwich plans to offer know-how about storytelling and production muscle in exchange for (in part) equity.

Certainly, it’s a clever way to drum up business in a downturn. We caught up with Lisagor over the weekend to learn more. You can also learn a bit more about the fellowship in the video embedded below.

TC: We haven’t talked in a while; catch us up on your client base.

AL: Our client base has been really interesting over these past couple of years because we always kind of adapt to where the tech trends are. There were a few years where D2C was king, and that was not my favorite, to be honest, because we weren’t telling stories of innovation and helping people understand brand new revolutionary ideas that will change how the world works. We were telling people about consumer products they can buy on the internet instead of in stores.

My favorite part of what I do is talking to founders of revolutionary companies, because I see them light up when they convey their vision . . . and I don’t imagine it’s every day that these founders get to talk to filmmakers who understand what they’re building on a technical and strategic level like I do. I work with some serial founders, Andrew Mason and Suhail Doshi, for instance, who I can get on calls with and just talk for days about what they’re building, and they trust me to tell the stories. That means the world to me.

It’s easy to imagine that Sandwich is aided by generative AI but also threatened by it as companies look to scale back their expenses in this downturn. Is that the case?

The simple fact of the matter, as you know, is that the tech world is very different right now than it was a year ago, and everybody is in build mode, which means that there aren’t enormous marketing budgets floating around late-stage companies. And yes, there’s something scary about that because those big marketing budgets pay our bills. But I’m cognizant enough, and at this point prescient enough, to know that build mode is when the most value is built.

Are we using generative AI tools in our own work? Hell yes, every day many times a day, in all possible modes, in secret and in public. I’ve jumped in with all hands and feet and I obsess about the tech every single day. I try everything that comes out, I’ve moved half my cognitive process to LLMs, I use every mode in creating assets for Sandwich work and encourage my team to do so as well. Generative video is still very early, so that’s the one area we haven’t incorporated into the practice yet. But when it comes, I imagine that we’ll be using it to generate assets that get used in our work, rather than whole videos. That’s the thing I don’t think people outside our field get quite yet: these tools don’t just make the work for you. They make pieces of the work, and we as the storytellers get to editorially decide what pieces to use and how to use them.

Has anyone told you yet that they are going to attempt to create their own campaign with generative AI?

No, not yet. And they may very well be trying, but I think when they do, we’ll know about it and we’ll pop the cork with them, because if they figure out how to scale great, that’s a net positive for culture.

Was it harder to get shares instead of cash as things grew more frothy between 2020 through the second quarter of 2022? 

The equity model definitely slowed down during the Era of Froth, but mostly because we were filling our calendar with clients with those hefty marketing budgets I mentioned. And I have to prioritize what goes on the calendar, because great creative isn’t scalable yet.

During that froth, I think we had 8 equity clients, which was definitely a smaller proportion than pre-froth. But now that tech is in build mode again, I think the number is going to go up considerably. I just signed an equity deal with an awesome seed-stage AI company in the video space.

You are launching what you describe as a fellowship program. Compared with the way you’ve been doing things for years, what is the biggest twist here?

Yeah, I think the twist here is that we’re taking our previous version of the equity model, where we’d sort of wait for the coolest early-stage companies to come to us and say “Hey, we don’t have a ton of money but can we work out some equity?” and we’re being proactive about it, going out to the tech public and saying, “We’re Sandwich. You may be in build mode on something you think is going to make a huge impact, and you need to be able to tell the story right in order to make that impact, so get in touch with us so we can try and help figure out whether there’s a fit here.” It’s basically an incubator but instead of capital, we’re providing creative, strategy, and story [through video], which is something that most VCs can’t provide.

What percentage of your pay are you willing to take in equity?

It depends on the opportunity. For something that feels like it’s in the perfect sweet spot of a clearly revolutionary product with a great founding team, where we get each other on a fundamental human level and they trust us to tell the story well, plus the story can be told with a modest amount of resources — say low six-figures or even sometimes high-five figures — and Sandwich isn’t losing its shirt to go out of pocket on hard costs, we’re probably willing to go up to a 25/75 split where we’ll get 25% of the budget in cash and we’ll put in the 75% in sweat equity and out-of-pocket costs. That’s not every project though.

Are you still starring in some of these videos? Also, when we last talked ages ago, it could cost a client $100K for a video. Has that cost gone up or down and why?

I’ll still show up on-camera every once in a while, but I think I got kind of burned out on being a spokesman during the 2015-2019 period when I was on TV all the time, telling people to use TrueCar and, for a short time, CenturyLink. I feel like I kind of lost something getting that much exposure for something that wasn’t the reason I was on-camera in the first place. I was on-camera in my earlier videos because I genuinely love telling people why a piece of tech is cool, and how they might get value from it. So the modern version of that is I hired a TikTok creator for Sandwich, and he and I work together to make videos where I get to be that original persona again, on a new platform for a new audience, with the same exact goal as before. I love tech and I want to tell you why something that’s coming to the world will be meaningful to you.

As for our budget, our FAQ says we’re most comfortable in the $250,000 to $400,000 range for our work. The market expands and contracts around that comfort zone, and obviously we’re in a bit of a funding downturn right now, but we still have clients paying for good work in that range. $100,000 projects are much more rare and harder to pull off these days, unless a lot changes about the methods of production, which, watch this space, haha.