If TIK TOK goes dark in 3 days...

https://pitchbook.com/news/articles/what-happens-if-tiktok-goes-dark

In their previous iterations, both firms invested heavily in consumer bets in China in order to capitalize on a growing, digital-friendly young population.

But both have since severed ties with their Chinese investment arms to minimize regulatory scrutiny.

The TikTok ban has put many VCs in an unusual situation: Firms are split on whether to hold onto their shares, currently holding high valuations on paper, and remain under government scrutiny, or sell them on the secondary market to shed the uncertainty of future returns and tensions with the White House. Though, president-elect Trump is considering an executive order to temporarily suspend the TikTok ban, according to The Washington Post..

Notable Capital, formerly known as GGV, said it sold its ByteDance shares in 2024.

On the other end of the spectrum, Lead Edge Capital founder Mitchell Green has been consistently bullish on ByteDance and has said that the firm has grown its position in the company. Sequoia is also still exposed to TikTok, according to The Information. Sequoia did not respond to PitchBook’s request for comment.

The fallout

The Supreme Court could still intervene to strike down the ban, and ByteDance could still make a last-minute sale of its US operations.

But it’s still a tipping point for the creator economy. ByteDance could even sell off the US app without its algorithm, said Sarah Kunst, managing director at Cleo Capital, a pre-seed and seed firm that invests in the space.

“I don’t know if creators will necessarily stay on TikTok and use it in the same way if it has the same name but the underlying product has massively changed,” Kunst said. “The algorithm has been a key to TikTok’s success in the US: It promotes user stickiness that also facilitates a more lucrative monetization flywheel for creators.”

ByteDance has invested significant resources into creator monetization and rewards on TikTok, which would effectively evaporate for creators if it shuts down the app on Sunday.

Creators and marketing agencies have been preparing for the possibility—but it’ll still be a gut punch for creators and startups whose marketing or revenue rely on the app’s success.

“There is a, call it, a ‘middle-class’ creator, who’s not this huge celebrity but who’s using it to really make a dent in their monthly expenses, where that is going to be a big hit,” Kunst said.