The ad-funded site is offering a $1m annual prize for the best talent videos submitted and voted on by the public.
ClipStar is aiming to have 18 million video clips uploaded by the public and generate 25 billion ad impressions in the first 12 months of operation.
Asda, BSkyB and Virgin Media are among the advertisers to have signed up, with ClipStar intending to open up the sponsorship opportunities beyond banner, button and skyscraper advertising.
The site has nine channels including video, news, leader board and community, which ClipStar intends to sell sponsorship around.
Plans are afoot for the site to develop quickly to offer new features such as live lounge, where people can book a five-minute slot and perform live to users on the website. Meanwhile, a mobile version of clipstar.com will go live early next year.
The site features a range of tools for communicating and a forum section, with the aim of creating a community on the site.
Advertising industry veterans Paul Barnes and Nigel Latham are behind the venture.
Barnes’s career history includes being a senior creative at Euro RSCG, while Latham set up B2B agency Air 10 years ago.
Former Orange e-commerce manager Tony Jeje has been appointed as commercial director and former Saatchi executive Eren Ozagir has been hired as sales director.
ClipStar is set to launch with a glitzy PR campaign and celebrity endorsement. The site has been undergoing private beta testing in order to fine tune features and eliminate problems, said Barnes.
ClipStar is the latest online outfit to seek to make money of user- generated content.
Earlier this year, Sony relaunched video-sharing site Grouper.com as a site for budding filmmakers to post short and long-form content that the Hollywood studio could look to develop.