Celebrities are everywhere in the news, but it is perhaps surprising to see pop-culture icons filling the headlines of the business news.

We previously covered Jay-Z and Oprah’s backing of Oatly – though these celebrities are by no means the only ones active in the investment world. Other celebrity investors include Ashton Kutcher, George Clooney, Tyra Banks, Jared Leto, and Justin Bieber – to name only a few. For some this is a new venture, others carry vast portfolios.

Though startup investing may seem like a sidestep from their existing careers it may in fact be the next logical step. Once you have worked for the money it is time to make your money work for you, as the saying goes.

With money to play with and the time to make careful investment choices, celebrities are backing companies in a wide variety of industries – they have a hand in everything from tech and commerce to food and beauty.

A consistent theme across the board is a diverse portfolio, focusing more on the ethical and moral goals of the companies than the industries they operate in.

Value in Values

Jay-Z co-founded Marcy Venture Partners, a firm whose investment portfolio focuses on the key values of ‘sustainability, empowerment, inclusivity, accessibility, convenience, health & wellness and personal expression.’

This kind of values-based investing is popular among celebrity investors and involves choosing to invest only if the goals and values of the company or startup align with your own. Selective investment choices like these improve their public image, have the potential to increase their wealth, and champion good causes all in one careful move.

Jared Leto, Ryan Seacrest, and Jessica Alba all invested in popular meditation app Headspace back in 2015. Investing in a company with such a positive social impact will have been an excellent PR move, painting them in a compassionate light and endearing them to fans. It wasn’t just great for publicity though – Headspace now has over 30 million users and its paid subscription model will have earnt them good returns on their investment.

For those living in the spotlight startup investment is an excellent opportunity to make a public statement about their values. Investing in socially conscious startups is also a smart long-term play as it paves the way towards a positive and sustainable future.

This seems to be a common goal for those who begin investing after already achieving fame, but it may not be entirely altruistic; sustainability is obviously good for the planet, but it’s also good for business. Sustainable business practices can lead to more stability in the worth of a company, making them a sensible place to place your bets. Regardless of the motives though it is good to see socially conscious startups receiving this funding.

Hip-hop voices

Celebrities such as Jay-Z and Snoop Dogg aren’t the typical image of the venture capitalist and their presence is opening the world of investing up to a wider audience.

With early investments in companies such as Uber and plant-based Impossible Foods, Jay-Z has stepped from one massively successful career into another.

Snoop Dogg’s investments in Klarna and Robinhood have raised his already high profile even higher as the value of the companies soar to new heights. Crunchbase data shows his portfolio ranges from the likes of Reddit (the home of the GameStop frenzy) to coffee suppliers. His portfolio, it turns out, is as wide-ranging as his career.

Hip-hop artists are prominent in the startup investment scene. This is perhaps owed to the emphasis on self-made careers in both worlds. The early stages of startups resemble the beginnings of music careers with lots of hard work and self-motivation playing key roles in both. The strong emphasis on community in the hip-hop scene also deeply resonates with the close-knit teams of startup culture.

Celebrities as startups

Celebrities are arguably startups themselves – they’re self-built and need to stand up against competitors, proving themselves above the rest. Both are ambitious career tracks that rely on determined self-promotion. You need a solid grasp of the market and of what sells in order to succeed in either the world of celebrity or in the world of investing.

Celebrity investment portfolios are not entirely full of successes though. Some of the startups they backed have since folded, but the risks are not so great when your investment is a comparatively small percentage of your net worth.

They have more money to play with, meaning that potential losses that would cripple smaller firms are less of a concern. They can afford the risks and, with larger sums at their disposal, are able to earn the biggest pay-outs.

Familiarity with unpredictability

Following a life of exposure to the rapid changes in the music charts and ever-changing media opinions, celebrities are geared up for the unpredictable nature of the stock market.

There is a risk posed by the existence of celebrity investors, however. Investors may be tempted to invest in a company simply due to the fact a celebrity they like has invested in it. Or they may take the successes of the celebrity’s portfolio to mean that they have had a record of consistent wins.

This risk is not unique to novice investors; the buzz surrounding Special Purpose Acquisition Companies (SPACs), driven by celebrity endorsements, is reaching investors at all experience levels.

Celebrities have always held large public influence though, and their choices in the startups they invest in shows an awareness of the impacts their choices have on their audience.

Conclusion

These celebrities have continued to play well to their audience, adapting to that audience now being made up of fans and investors alike. At first glance the jump from celebrity to investor seems like a massive change in career, but there are a remarkable amount of similarities between the two.

There are many success stories of celebrities who have gone on to have highly profitable investment careers – suggesting that, though it may be unexpected to some, investor is the next logical career move for a celebrity.

About the Author: Leo Hynett

Leo Hynett is a contributing Features Writer, with a particular interest in Culture, the Arts and LGBTQ+ Politics.