Chess streamer Alexandra Botez generates seven-figure annual revenue from her content creation business. Her audience spans millions of views across multiple platforms. She’s a professional competitor, an entrepreneur, and by conventional standards, the definition of business success. Yet, when Botez applied for a business credit card, traditional banks repeatedly rejected her application.

She is just one example of the gap at the heart of the creator economy: content creators can build thriving businesses that traditional financial institutions simply don’t understand. Fintech company Karat Financial, founded in 2019, exists precisely to address this problem by building financial products specifically for creators like Botez.

“Many top creators today are businesses, but they struggle to access credit, set up banking, and pay taxes,” explains Eric Wei, co-founder of Karat Financial. “In 2025, everyone’s making content, building businesses from it, yet banks make it harder than it needs to be.”

The Payment Conundrum in the Creator Economy

The creator economy has developed through two distinct phases, according to Eric, who witnessed this transformation during his time at Instagram where he helped build Instagram Live before co-founding Karat with Will Kim. The first wave began when hobbyists and passion-driven content creators suddenly realized they could monetize their work.

“Many creators I met at Instagram started from passion before money was even part of it,” Eric explains. “While their peers got nine-to-five jobs, they uploaded videos of themselves talking, dancing, and making skits.”

The COVID-19 pandemic accelerated this change as audience engagement with digital content soared. “Suddenly the entire creator industry blew up. People realized they could make money from advertising and launching their own products,” Eric says.

This shift, he said, revealed a critical problem: creators who had started as artists now found themselves running businesses without proper financial guidance. “They feel alone and have to figure out everything transitioning from ‘I’m an artist’ to ‘I’m making revenue,'” Eric explains. “I saw creators who hadn’t paid taxes for years, and it got in the way of their creativity.”

The second phase is more recent, with younger creators approaching content creation as entrepreneurs from day one. “The new generation, the 20-year-olds, they think, ‘Of course I’ll build a business, and of course I’ll make content about it too,'” Eric says.

He cites Cluely, an AI note-taking product that went from “$0 to over $7 million in annualized revenue in just three months profitably.” This example illustrates Eric’s point about the new generation of creator-entrepreneurs, where the line between founder and creator is increasingly blurred.

Despite this change, traditional financial institutions remain stuck in outdated models of evaluating businesses. “Banks look at someone like Alex Botez and think she’s a bakery or restaurant. They don’t understand what she does,” Eric explains.

Karat’s Approach to Creator Finance

Eric’s experience at Instagram, combined with his background in finance at McKinsey & Company and The Blackstone Group, helps him understand both the creative and financial aspects of the equation. Along with Kim, who also comes from a financial background, Eric launched Karat’s first product: a business credit card designed specifically for creators.

“The first product was simple: a business credit card with higher limits for creators because we actually understand what they do,” Eric says. “We partnered with Visa and built a unique underwriting model.”

The company has since grown, having raised more than $100 million in funding from SignalFire, Union Square Ventures, Y Combinator, and prominent creators such as Graham Stephan, 3LAU, Nas Daily, and Josh Richards. They’ve also received backing from former founders and CEOs of major platforms, including Twitch, Twitter, YouTube, TikTok, and Wealthfront.

What makes Karat different from traditional financial institutions is their deep understanding of the creator business model, which Eric breaks down into three key differentiators:

1. Creator-Specific Underwriting – “The better you understand a creator, the better terms you can give – lower fees, higher limits,” Eric explains. “We know how followers translate into revenue because we’ve underwritten over a billion dollars in credit.”

This unique approach allows Karat to evaluate creators based on metrics traditional banks don’t understand – such as follower counts, engagement rates, and platform diversity – alongside traditional financial data.

“When creators use Karat, they connect their financials with us. We see exactly how much they make, how many followers they have, and how they earn,” Eric says, adding that this approach enables Karat to offer higher credit limits than traditional banks would provide to the same creators.

2. Trusted Brand Within the Creator Community – Eric experienced firsthand how difficult it can be to build trust with creators, even when offering valuable financial assistance. “In 2020 the government gave out PPP loans [Paycheck Protection Program]; free money,” he recalls. “I told the creators I could get them access. Not one said yes because they didn’t trust it.”

This experience solidified Eric’s understanding that trust is as important as the financial product itself. “The problem isn’t just building a good product with good underwriting. You need a trusted brand,” he says.

Karat has built this trust organically rather than through paid partnerships. The company hosts regular community events, including weekly pickleball games that bring together influential creators like Stephan, Zach Justice, Alex Botez, Saikuno, Miskif, and members of the Try Guys. They also produce “The Karat Podcast,” where Eric interviews successful creators.

“Every creator worries, ‘What if this goes away?'” Eric says. The podcast addresses key questions: “What happens when the algorithm changes? How do I make money? How do I keep creating?”

3. Products Designed for Creator Workflows – Beyond credit cards, Karat has expanded to offer business banking with higher interest rates and AI-powered bookkeeping. Their products reflect a deep understanding of creators’ actual needs and workflows.

“Have you ever seen a banking dashboard that shows both your income and your social followers?” Eric asks. “We know creators want to see finances, social metrics, and account details in one place so brands can pay them.”

Their AI-powered bookkeeping feature automatically categorizes transactions and prepares creators for tax season. “Push a button and it shows everything you made and spent, broken down by AI,” Eric says.

Karat also offers unique perks tailored to creators, including Times Square billboards for qualifying users. “If you’re a creator with a minimum deposit, we’ll give you a billboard,” Eric says.

Common Financial Pitfalls

Through his work with creators, Eric has identified three critical financial issues that consistently undermine their long-term success and stability.

The first is tax compliance. Many creators either don’t pay taxes or overpay by attempting complicated loopholes. 

The second is credit building, which impacts their ability to achieve milestones like homeownership regardless of income. “If you don’t build credit, no matter how much you make, you can’t buy a house,” Eric says.

The third issue is failing to separate business and personal finances. “At first, it’s all personal. Eventually, you need an LLC [Limited Liability Company] and a bank account. Until then, you can’t plan for the business’s future,” Eric explains.

These challenges often lead to the familiar pattern of creators who achieve initial success but later face financial ruin. “Famous creators, actors, athletes – they do well, then a few years later, they’re broke,” Eric says.

By addressing these needs, Karat enables creators to focus on content creation rather than financial stress. “It’s hard to make art or videos when you’re worried the numbers don’t add up,” Eric says.

Building Community and Looking Forward

Beyond financial products, Karat has invested in building community among creators. Their regular events provide opportunities for creators to connect with peers who understand their unique challenges. “We give them social events to meet each other,” Eric says. They also offer educational resources, including guides and talks about financial management specifically tailored to creators.

Karat has also recently added AI-powered tools designed to automate tedious financial tasks. “You don’t want AI to replace creative work. You want it to replace boring work so you can stay creative,” Eric emphasizes.

This philosophy aligns with Eric’s broader vision for society. “A society where more people can be creative is a better one,” he says. “John Adams once said we wage war so our children may study sciences, so their children may study arts. A great society lets people focus on what they want to create, not just survival.”

Eric sees the creator economy eventually becoming indistinguishable from the economy at large. “Twenty years ago, companies called themselves Internet companies,” he says. “Today, that’s redundant. Soon, every business will need to make content.”

By building the financial infrastructure to support this transition, Karat aims to enable more people to make a living through creative work. As Eric summarizes their mission: “We focus on the business side so you can focus on the creative.”