Quick answer: Paying an influencer in equity can work, but only if the deal is fully papered before anyone posts: exactly what the creator receives (shares or options), how much, when it vests, what happens if the relationship ends, and what counts as promoting a competitor. A September 2026 lawsuit filed by the LaBrant family against a snack startup shows what can happen when those terms are left open.

Key takeaways: Put equity terms in a signed influencer agreement and the company's own equity documents, define exclusivity narrowly and clearly, spell out termination rights and what happens to unvested equity, and remember that issuing shares in Canada has corporate and securities law steps of its own.

What happened in the LaBrant Fam lawsuit?

According to Bloomberg Law, Cole and Savannah LaBrant, the parents behind the "LaBrant Fam" family channels, sued Jams Frozen PB&J Inc., a crustless sandwich startup, in Delaware's Court of Chancery in September 2026. They allege the company agreed to an endorsement deal paid in equity, then held the paperwork for months while changing the terms, including moving from an outright share grant to options and reducing the size of the equity payment. They also allege the company backed out after a video posted by another brand the family works with briefly showed a rival product.

These are allegations in a newly filed U.S. case. They have not been proven, and U.S. law governs that dispute. The contract lessons apply to Canadian founders and creators all the same.

Can a Canadian startup pay an influencer in equity?

Yes, but it is not as simple as promising "1%." The company must actually issue the shares or grant the options through a board resolution, record them on the cap table and in the minute book, and rely on an exemption under provincial securities law. Options are usually granted under an option plan, which may need to allow grants to consultants. Tax treatment also differs between shares and options, so both sides should get advice before signing.

What should an influencer equity deal include?

The exact form and amount of equity

Shares or options, the number or percentage on a defined (often fully diluted) basis, the exercise price for options, and the class of shares. "We'll give you equity" is how disputes start.

Vesting tied to deliverables

Equity can vest over time or as content milestones are met, with a cliff if appropriate. This protects the company if the relationship ends early and protects the creator by making the trigger objective.

Exclusivity that is actually defined

Say which product categories are off-limits, for how long, and whether a competitor's product appearing in another brand's content counts. Vague exclusivity clauses are the most common trigger for creator disputes.

Termination and what happens to the equity

When can either side end the deal, with what notice, and what happens to vested and unvested equity and any cash already paid.

Disclosure and compliance

Owning equity is a material connection. Canadian advertising law and Ad Standards guidance require clear disclosure in sponsored posts, and an equity stake makes that even more important.

Content rights

Who owns the content, how long the brand can reuse it in ads, and whether the brand can run ads through the creator's handle (whitelisting).

What should creators ask before accepting equity?

Ask for the cap table summary, how many shares are outstanding on a fully diluted basis, the latest valuation or SAFE cap, whether you are getting shares or options, and whether you can sell or must hold. Equity in an early startup can be worth a lot or nothing, so many creators pair it with a cash fee.

FAQ

Is a verbal influencer deal enforceable in Canada?

Some verbal agreements can be enforceable, but proving the terms is hard, and equity grants need corporate approvals and documents to be effective. Put it in writing.

Do influencers with equity still need to disclose sponsored posts?

Yes. An ownership stake is a material connection that should be disclosed clearly in the post itself, not buried in hashtags.

Should a brand use shares or options for an influencer?

Options are common because they can vest and only become valuable if the company grows. Shares are simpler to understand but harder to claw back. The right choice depends on tax, control and how long the partnership will run.

Structuring a creator partnership, ambassador deal or equity grant? For Founders Law drafts influencer and creator agreements, equity and startup documents, and advertising compliance reviews at a fixed fee. Book a free consultation. Related reading: Influencer Agreements 101 and who is legally responsible when influencer campaigns go wrong.

Sources: Bloomberg Law (September 14, 2026); Ad Standards influencer marketing resources.

By Brooke Ash, BA, JD, founder of For Founders Law PC, licensed by the Law Society of Ontario. Last reviewed October 26, 2026. General information only, not legal advice. See also our startup, AI and tech law glossary.