Stars bringing clout to tech startups
Robert Deniro co-owns restaurants and Jennifer Lopez sells perfume and clothes, but the most coveted job for multihyphenate celebrities these days is something a bit less glitzy and a lot more geeky — tech entrepreneur.
Thanks in large part to the success of Ashton Kutcher, a prolific angel investor who has funded dozens of startups and plugs them to his nearly 10 million Twitter followers, stars are looking beyond Hollywood for business opportunities.
Now A-listers are leveraging their considerable celebrity clout and finances to form their own startups, launch mobile applications, fund companies or serve as creative directors to major tech brands.
The Internet “is becoming increasingly mainstream and a bigger part of our daily lives, and as capitalists I think a lot of celebrities are looking for ways to make money there,” said Sean Rad, founder of Ad.ly, a marketing platform that helps “influencers” including Mariah Carey, Snoop Dogg and Charlie Sheen get paid for endorsing brands and products on Twitter and other sites.
Kutcher’s startup investments include Foursquare, Airbnb, Chegg, Fashism and Fab.com; the Two and a Half Men actor also co-founded a tech investment fund and a digital media studio.
Justin Timberlake last year joined a group of investors to buy Myspace from News Corp. for $35 million and has been working to revive the once-dominant social networking site.
Jessica Alba recently started Honest Co., an online-only membership website for baby products, and One Tree Hill actor Sophia Bush announced this month that she’d invested in Styleseat, a website that enables clients to search and book beauty services online.
In the music business, LL Cool J unveiled a virtual recording studio platform in January that enables users to record tracks over the Internet, and Dr. Dre, 50 Cent and Ludacris have their own lines of high-end headphones. 50 Cent also runs his audio products company, SMS Audio, which plans to expand its offerings to home audio systems, professional audio equipment and speakers.
Although the entertainment and tech industries are becoming more closely linked, it wasn’t always an easy pairing. Buttoned-up investors were wary of the glamour of Hollywood stars, while techies didn’t want to appear to be selling out.
“For the first four or five meetings, I couldn’t take Ashton seriously,” said David Lee, a Silicon Valley investor at SV Angel who has worked with Kutcher on more than 25 tech deals. “He has overcome that skepticism by leaps and bounds.”
So much so that Kutcher has become one of the most sought-after tech gurus and investors around, with hundreds of fledgling entrepreneurs vying to score time with him. A-grade, his investment fund with L.A. billionaire Ron Burkle and Madonna’s manager Guy Oseary, regularly invests $50,000 to millions of dollars in startups.
Tech companies say Kutcher’s fanboy interest in the latest tech gadgets and websites boosts his credibility, as does his commitment to helping the firms he invests in.
Dan Rosensweig, chief executive of textbook rental service Chegg, said Kutcher occasionally visits the startup’s Santa Clara, Calif., headquarters, recently meeting with the product team for four hours.
One Friday, Kutcher sent an e-mail saying he had spent a couple of hours on the site and had put together a lengthy “series of notes” on his ideas for improvements.
“Just associating with a celebrity for celebrity’s sake is not going to help the value of a company. It has to be authentic,” Rosensweig said. “I would put Ashton in a very unique camp because he’s actually made this a business. He’s got a fund, he invests in startups, he has a very specific view on companies, and his value proposition isn’t Ashton Kutcher the Celebrity.” For other firms, celebrity sells. “It works fantastically for us in terms of getting our name out there, instant recognition and credibility with the consumers, and tons of television and press interviews,” said serial entrepreneur Brian Lee, who co-founded e-commerce site Shoedazzle with Kim Kardashian in 2009. The Santa Monica, Calif., company has raised $60 million from investors, including a $40-million round in May led by venture capital firm Andreessen Horowitz.
“If you work with a celebrity with 25 million fans, you’re going to get traction,” Lee said. “To pay for that kind of media exposure — I don’t think most startups can afford that.”