Inside Celebrity Tech Investor Trends - Forbes

WSJ DLIVE — Actor Jared Leto speaks during the Wall Street Journal D.Luxe conference in Laguna Beach, California, U.S., on Wednesday, Oct. 18, 2017. WSJ D.Live conference brings together CEOs, founders, investors, and luminaries to discuss the global technology
© 2017 Bloomberg Finance LP

Celebrities. They’re just like us, goes the tongue-in-cheek adage. Of course, in some cases they are and some cases they definitely are not. But when it comes to an interest in tech investing, we can say that just like a number of “regular people,” celebrities are drawn to the tech world when it comes to considering areas for best returns on their money. This behavior is nothing new as celebrities such as Ashton Kutcher were, not long ago, nearly the poster children for investing in apps. However, now there are new tech investment trends among the luminary crowd that are intriguing and invite a bit of analysis given the larger impact on the industry.

Some clearly follow tech investing patterns based on deeper philosophies like Leonardo DiCaprio who even recently signed on to advise a climate technology firm owned by venture capital firm Princeville Capital. Professional athletes such as Carmelo Anthony started his oven fund Melo 7 Tech Partners, a few years ago which has a specific interest in technology startups. JayZ got in on a relatively ground floor with Uber and Airbnb.

But now we’re starting to see some actual, early patterns of interest within the space. First up, fintech. For example, Jennifer Lopez and fiance Alex Rodriguez recently invested in Acorns, a savings app that positions itself as a bank alternative. Apparently the offered looked so good that U2 front man Bono jumped in as well as basketball star Kevin Durant.

At about the same time, superstar boxer Manny Pacquiao decided that they best fintech investment is investment is in oneself, literally. The fighter decided to launch his own digital currency called the “Pac” that offers to let fans do everything from buy merchandise to engage directly with him and engage in the cryptocurrency space. The pac offers a token that can be traded digitally and will reportedly be listed on a Singapore exchange called Global Crypto Offering (GCOX) whose speciality is celebrity tokens.

Tennis star Venus Williams is also all about the intersection of money management and tech as demonstrated by her investment in Ellevest which is an automated investment platform tailored to women.

And if the new sub-pattern continues to build that of the larger, overarching one of tech investments we should see this trend grow and carry with it significant numbers given the estimated $2 billion collective investment in technology by celebrities to an amount which is several times more in 2020 and beyond.

President of Nati Celebrity Services and Host of The Domenick Nati Show on iHeart Radio provides some insights behind this burgeoning trend. He says, “ Celebrities have learned that investing in technology is a higher risk but a much higher and faster reward.” He continues, “And celebrities are investing more and more in fintech because they feel it is proven and is now safe to risk their money and reputation to invest in it. The biggest thing you have to take in consideration with celebrity investors is that they they have much more to lose when it comes to reputation and public appearance. So much is weighed, and now we’re starting to see much more movement in this particular space.”

Michael Yanover, Head of Business Development at the legendary talent firm Creative Artists Agency and the man responsible for the inception of company’s first tech incubator offers additional thought-leadership, particularly as it intersects with consumer interplay. Says Yanover, “There has been a real and meaningful shift in the last few years by consumers who are moving away from incumbent brands and moving towards start-ups, which bring authenticity and transparency to the table, many of which deliver their message through celebrities.”

He continues, “Some actors, musicians or athletes, like George Clooney (through Casamigos) or Lady Gaga (through Haus Laboratories), have been able to create companies of their own, while others have just been investors in third-party startups. By being methodical, selective and authentic, celebrities who are best at this not only enhance that company’s brand through their association, but also enhance their own overall personal brand. None of this goes un-noticed by the consumer.”

The 2019 US Open Women's Finals — QUEENS, NY- SEPTEMBER 7: Serena Williams Vs Bianca Andreescu during the women's finals at the 2019 US Open on Arthur Ashe Stadium at USTA Billie Jean King National Tennis Center on September 7, 2019 in Queens, New York City. Credit: John Palmer /
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However, there are a few current missed opportunities which should be on the celebrity horizon as a near-future trend. Though, for example, tennis icon Serena Williams’ venture capital firm focuses on early-stage investments in companies led by women and people of color, there are not many others to speak of who have either as firms or have specific interests as individual investors in this area.

And even Williams’ firm is not heavily into emerging tech but rather overall health, wellness and ecommerce. As a demographic that is fastest growing group of entrepreneurs in this country and projected to be so for some time, women of color as the hot, new founder is a key area high-profile group to watch. However, this is a hurdle to overcome because if access to prominent angels and venture firms has been historically challenging for this demo to penetrate, imagine adding celebrity to that mix. The intersection would be extremely rare and, therefore, that which the celebrity him or herself needs to make a priority and create a real strategy to obtain intel on new opportunities from these founders so as to remain relevant and profitable. It’s all about new radars when talking tech opportunities.

Another area that seems to be rather dormant right now on the celebrity investor scanner is that of artificial intelligence. While tech giants have reportedly spent a combined $8.6 billion AI startups, this massive element leading the fourth industrial revolution seems to be an area of mystery for most notables save actors Jared Leto (see Nest Labs) and Will Smith (see BioBeats). And it’s a current pattern that is maybe not serve the celeb community’s best interest.

Nati has a few theories about this void. He says, “A big factor of being a successful investor is who you surround yourself with. Top investors have multiple people tipping them on emerging trends and all of their focus is on investing early before a boom.” He adds, “It's difficult for celebrity investors because their time, focus, and circle of contacts are not centered around investing. Celebrities typically have a staff that is focused more their public image less on private investments, and that is how they miss opportunities to grow their wealth, especially in AI.”

For now, Nati says that he sees more celebs gravitating toward the fintech space before they embrace AI, given that with the former it is relatively easy to understand and the analytics are easily accessible. But the great thing is that once celebrities make discoveries about which they are passionate, moves happen like wildfire so watch for shifts to occur.

And if you happen to be a tech founder looking to align with such prestigious investors? Says Nati, “Celebrities rely on word-of-mouth and endorsements from trusted celebrity friends and reps to make the best investments, so any business that wants a celebrity investor needs to realize that it will be difficult to get in the circle, but if your product is strong enough it's not impossible. The dividends on both sides could be endless.”