How and How NOT to Use a Celebrity Investor
I think Leonard DiCaprio has invested in upwards of 10 consumer startups alone. Don’t quote me on that. However, his funding of Grizzly Man’s suicidal misadventures (Timothy Treadwell) should give you some pause for reflection.
What is the most influential role a celebrity can play in the life of an emerging brand, and when in the lifecycle of a brand should it happen?
Let’s first list the uses of celebrity affiliation…
- free PR
- mesmerizing buyers
- mesmerizing investors
- ‘influencing’ their fans
While free PR is nothing to sneeze at per se, gaining national PR in bursts doesn’t do much if you aren’t selling nationally yet. And, even then, it tends to act more like a TPR program. It produces a spike and hopefully a one-time baseline lift, but with increasingly diminishing returns unless you can have this person routinely plug you, which is highly unlikely in the massively busy schedule of a dynamic Hollywood celeb.
Mesmerizing buyers and investors is a clever use of a celebrity, and I know multiple companies that have exercised this magical power. The “OOOhhh, Brad Pitt” effect is perhaps the single most significant benefit of having a celebrity involved in your business. Not only is it irresistible to most neurotypical humans (not me), it keeps the celebrity backstage….
… This leads me to my next point. When celebrities occupy the front stage of your end consumers doing PR and ‘influencer’ campaigns, there is a significant risk for a new, unstable brand. That risk is that the celebrity over-determines the brand’s meaning early on AND also attracts a whole hell of a lot of curiosity trials that marketers would describe as ‘ultra-weak purchase intent.’ I call it a bullshit trial, to be brutally honest. These people will never return. They just want to tell someone they bought ‘Jennifer Anniston’s deodorant.
Capital, in my opinion, like mesmerizing back-stage stakeholders, is the only other valid use of a celebrity early on (Phases 1-4). Take their money, sure. Why not?
It creates social proof inside your industry. Money is money. The key is to treat them like dumb angels and keep them OFF your Board. If you give them voting rights, you introduce truly unhelpful white noise into your operations. They should be wealthy enough to bet on your innovation without voting rights. Take less money, if necessary. They’re rich. Come on. $500,000 is beer money to them.
I agree overall with Rohan Oza, who recently said the following in a podcast: “Celebrities are useful when you want to turbocharge a brand that’s already been built.” By implication, he is skeptical of them as founders or when founders bring them on super early as the brand’s face. Rohan is the operator who brought 50 Cent onboard formally as a celebrity investor in vitaminwater.
A brand doing this well right now is Partake Foods, which has raised celeb money from Jay Z and others but is not making them the face of the brand. They are equity angel investors as they should be. (Photo source: Eater.com)