Tim Bursch

Have you noticed the recent celebrity rush into investing in startups? Ashton, Leo, Biebs. Are startups selling out? Or are celebrities renting their name? I think it’s something in the middle.

If I was a startup today and I needed to raise money (that debate is another blog post), I could try to borrow from a bank or seek investors. Now, if I was really connected and venture capital made the most sense, funding from a well known celebrity would have a huge added benefit: recognition and advocacy from a pop culture name.

But is that selling out? Maybe it’s hacking the system. Most startups don’t make it for a lot of reasons. You would certainly increase your odds of survival by jumping on a celebrity coattail.

So, what about the celebrity? Are they just selling their name by investing in companies?

Picture this: you starred in some movies or hit it big in music and now have more money than you know what to do with. Perhaps you think about doing something smart with your resources. Do you invest in the stock market? Probably. Real estate? Sure. Those are basic building blocks in your massive portfolio. Now you have some speculative funds. Why wouldn’t you try venture capital?

In all seriousness, I think high net-worth investors are looking for non-traditional opportunities and see the attractive potential returns of venture investment. The reality is some businesses need funding and investors, even rockstars, want some of their money in alternative investments. But you better have a good product, because even Bieber can’t turn your idea into gold.

Image credit: covilha

Tags: investing, startup, venture capital.