Let’s be honest: startups love a good growth hack.
But then again, who doesn’t?
And Media for Equity (M4E) sounds like one. Instead of paying cash for ad space, you trade equity. The media company becomes a part-owner, and in return, they run your ads—TV, online, out-of-home.
It’s attractive. Especially when budgets are tight and visibility is everything.
But here’s the question: is Media for Equity always worth the trade?
From what we’ve seen at GLADTOBE, the answer depends on what kind of growth you want—and what you’re willing to give up.
What is Media for Equity?
It’s a funding model where a startup exchanges a percentage of ownership for advertising space.
Instead of writing a cheque, you hand over shares. The media company gets potential upside from your future success, while you get a boost in brand visibility without draining your cash reserves.
This model has helped several German startups get off the ground—Zalando, About You, Grover all gained early traction through M4E.
But others like Verivox or Flaconi have struggled to sustain growth through this model alone.
Why startups go for it
There are good reasons founders consider it:
- No upfront ad budget needed – Preserves runway for product and operations.
- Brand visibility – Great for consumer products needing reach.
- Speed to market – Especially when launching nationwide.
- Credibility boost – A media partner on your side can increase trust.
- Access to experienced media planners – Some media groups offer hands-on campaign support.
If you’re early-stage, this can sound like a dream. But dreams have trade-offs.
What you might not hear in the pitch
Here’s where things get trickier. These are the parts bands and us learned the hard way.
1. You’re Not in Control of the Media
We worked with a location-based tech brand that used M4E for an OOH campaign. They had a solid product, a clear message, and support from a national media partner.
The problem?
We couldn’t choose the placements. Most of what we could book was remnant—leftover slots, often last-minute. No ability to build consistent media pressure. No ability to sequence creative or time messaging. The result? A campaign that felt scattershot.
With another client in the auto industry, we face a similar issue. Even when we optimise a campaign based on performance, we often can’t get the same placement in the following week. Which means we’re flying blind. We don’t know if our optimisations ever take effect.
2. You’re Last in Line
Most M4E deals rely on what’s left after paying advertisers are done. So if a media slot is in high demand, the startup is out of luck. No exposure that day, that week—or longer.
For campaigns that rely on momentum and repeated impressions, this is a problem.
3. You Give Up Equity
Equity is permanent. When you give it away, you’re diluting your stake—and your early investors’. That has implications for control, decision-making, and future funding rounds.
4. Measuring Success is Murky
You might get a spike in traffic or awareness. But is that translating to revenue? Are you building sustainable acquisition channels—or just buying attention?
Unlike digital media with performance metrics, M4E often lacks direct attribution.
What to ask before you say yes
If you’re considering a Media for Equity deal, ask yourself:
- Can I afford the long-term cost of giving up equity?
- Is this media going to drive actual conversions, or just awareness?
- Will I have control over media placements and timing?
- Can I measure performance and adjust the campaign if needed?
What happens if the media doesn’t deliver? Do I have a backup plan?
Our take at GLADTOBE
We’re not against Media for Equity. In the right situation, it can be a valuable part of a startup’s growth playbook.
But we treat it like any other investment: does it help the brand grow sustainably? Can we track its impact? Will it strengthen the company—not just make it look bigger?
If those boxes aren’t ticked, we say pass.
Some shortcuts are worth it. Others cost more in the long run.
Thinking about a Media for Equity deal?
Make sure it’s working for your growth—not just the media partner’s.
We’re always happy to share what we’ve seen work (and not work) on the ground.
Summary: Pros and Cons at a Glance
Pros | Cons |
✅ No upfront cash needed for large-scale advertising | ❌ Founders and early investors give up equity |
✅ Helps build brand awareness quickly | ❌ Risk of media space being overvalued—or your equity undervalued |
✅ Can speed up growth and customer acquisition | ❌ You don’t get to choose placements; usually last-minute and leftover inventory |
✅ Media partners often bring useful expertise | ❌ Hard to track if ads lead directly to sales or growth |
✅ Being linked to a known media brand can add credibility | ❌ Media company on your cap table may complicate future fundraising |
