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What’s Ahead For Celebrity Businesses in 2015
It is clear that celebrities are capitalizing on the opportunity to leverage their social brands into successful businesses ventures, using their names and followings to attract both customers as well as funding. Expect that the trend will continue, given that companies like Beats by Dre are getting acquired for billions of dollars and the Honest Company and JustFab looking to IPO in 2015.
Celebrities have already been using rewards-based crowdfunding to pre-sell products on sites like Kickstarter & Indiegogo. With the existing JOBS Act rulings that allow startups to publicly advertise to raise equity funding, expect a growing number of celebrities to also leverage the power of equity crowdfunding as a means of leveraging their audience to more formally capitalize their startups.
“Celebrities are increasingly moving from endorsing products to being the product,” said John Demsey, group president of Estée Lauder. “This is only going to get more common.” (New York Times, November 14, 2014) The fact that celebrities can turn their millions of fans into loyal customers, or even investors in the case of equity crowdfunding, more and more red-carpet dwellers are jumping into the startup fray.
Now we’re also seeing celebrities lead their own multi-million dollar venture funds- most often investing in startups at Seed and Series A rounds. A few of the more active celebrity-led funds include Ashton Kutcher with A-Grade Investments, Bono with Elevation Partners, and Nas with Queensbridge Venture Partners. Many of these funds have been raised on the heels of a string of successful individual angel investments in deals like Facebook, Skype, Foursquare, Yelp, Dropbox and others.
In 2014 and 2015 there’s also a growing number of startups that have actually been co-founded by celebrities themselves, with the celebrity taking an active role in the founding and operations and promotion of the company towards it’s long term growth.
It’s clear that celebrities can bring valuable attention, momentum, and even make attracting large funding rounds for a startup a lot easier.
Celebrity Brands listed on ESE under the symbol CBI-ESE matches brands with Ambassadors and says 2015 is going to be a blockbuster year. If you will pardon the pun.