“The effect of influencers and celebrities on startup investing has only increased, and as technology eats more of the world, I don’t see that changing. Influencers and celebrities can be useful for your company, but they aren’t going to make the business succeed or fail and need to used thoughtfully.”– Lee Jacobs of AngelList
Long gone are the days where celebrities made their fortune solely from their musical acts, big-screen movies, and sportsmanship. Today’s celebrities are becoming entrepreneurial influences, and putting investment dollars into startups that can take their capital far beyond their front-street performances. And in today’s social business world, traditional celebrities aren’t the only ones getting all the attention. A new kind of celebrity–social celebrities–are also paving the way.
Rather than blowing their millions on another high-end vehicle, yacht, or mansion, these entre-celebs are siphoning their cash into startups that demonstrate tremendous potential in exchange for equity. And rather than cashing out on product endorsements they aren’t themselves invested in, they’re doling out funds to businesses they believe in.
The following three individuals demonstrate the versatility of the funding landscape, as well as the potential to use “fame” as a springboard for a different type of money generation. They include a rapper, a social media maven, and an actor. Here’s how they’re investing in tech:
Rapper Nas launched his investment firm QueensBridge Venture Partners firm in 2013, and since then, has invested in many major companies, including Lfyt, DropBox, and Rap Genius. One of his more popular investments was in home security product, Ring. Ring is a video doorbell product that allows you to open the door remotely and let others enter, while monitoring their activity.
Founder of the product, Jamie Siminoff, touted the company as a “caller ID for your front door” and pitched it on Shark Tank, where he sought $700,000 for a 10% stake. None of the sharks took the bait, but Nas’s QueensBridge Venture partners invested a fine sum during a funding round, and are reaping the benefits.
The company was recently sold to Amazon for $1.2 billion. According to some sources, Ring would work well with the company’s Amazon Key, a smart lock and camera system that allows delivery personnel to safely place packages in a consumer’s home without it resulting in a theft.
Jake Paul is a mega social media influencer during one of the best times to be one. Today, influencers are very powerful in the business world, prompting billion-dollar brands and small businesses alike to invest huge portions of their budgets into influencer marketing. One Forbes article declared, “Influencers are the new brand.” According to Google, 70% of teenage YouTube subscribers trust influencer opinions over traditional celebrities. Even more, roughly 86% of women turn to social media before making a purchase.
This is the kind of influencer power that social celebs like Jake Paul possess. One of his more prominent investments was 123Wish.com, a platform that raises money for charity by providing unique experiences with other influencers. 123Wish.com serves as a testament to Paul’s own social influence, and is an ideal demonstration of how that influence can power brands, generate sales, and make a difference.
The premise for 123Wish is simple enough: each experience is paired with a different charity, and users can enter to win the experience and support the corresponding charity in the process. Winners are then chosen at random. Participants can sort experiences by category (like Beauty, Music, and Travel), or by value. Some of the current experiences include:
- Spend the day Go-Kart racing with Nickelodeon superstar Jace Norman
- Win a sneaker shopping spree with Fat Joe in NYC
- Hit the batting cages with Boston Red Sox’s Hanley Ramirez
- Star in Amanda Cerny’s next YouTube video and be seen by millions of subscribers
- Swim with sea otters alongside Nick Bateman
Ashton Kutcher is one of the most oft-cited examples of celebrities who have turned to startup investment to diversify their portfolios. You most likely recognize him from TV shows like “That 70s Show” and movies like “The Butterfly Effect.” But today, his on-screen appearances are somewhat different. He’s even guest-starred on the show Shark Tank, where he’s made deals with promising tech companies and continues to diversify his portfolio. Alongside Guy Oseary and billionaire Ron Burkle, Kutcher founded A Grade Investments, which was able to turn an initial fund of $30 million into $250 million.
Ashton Kutcher says of his transition to tech, “I spend a lot of time thinking about new and simpler ways to do things, but don’t have enough time to execute on all those ideas. So I found people who were executing on them and invested in their success.” Some of Ashton Kutcher’s investments include Uber, Spotify, Airbnb, Fab, and Path, and he’s known for frequenting conferences like SXSW in search of new talent.