By Alvin Mak
The past and present of Hollywood’s place in entrepreneurship
Few people think of legendary actor Paul Newman when they crack open a jar of Newman’s Own pasta sauce, when in fact, the well established non-profit F&B provider was founded by the Hollywood star in 1982.
Newman was the trailblazer for a handful of stars who pursued entrepreneurial careers outside of the glamor and flashiness of Los Angeles.
His talents were not limited to the big screen, even though he’s an Oscar-winner for the 1987 film “The Color of Money” – Newman had an avid interest in motorsport, and finished second in the famed Le Mans race in France in 1979.
It was his work in philanthropy however, that led him to found Newman’s Own: a food and beverage company which donates 100% of its profits towards charity. Newman’s Own’s wide range of products fill the shelves of America’s supermarkets. Over its lifetime so far, it has donated a collective $550 million towards charity.
The realm of celebrity entrepreneurs doesn’t end there. One of the world’s most iconically Canadian brands also originated from the entrepreneurial spirit of a famous figure of the past: Tim Horton.
The National Hockey League Hall of Famer not only guided the Toronto Maple Leafs to four Stanley Cup victories, but also founded his donut and coffee franchise—Tim Hortons—in Hamilton, Ontario.
The conglomerate, founded in 1964, grew to be a multi-million franchise in a mere four years. It has now exploded to a $4.5 billion valuation. With over 80% of Canadians visiting its 3,500 stores, “Timmies” has evidently cemented its quintessentially Canadian identity.
“We’re as Canadian as you get,” said Tanya Doucette, owner of 8 Tim Hortons restaurants in Alberta. Timmies has seen its store fundamentally define life in Canada.
These were some of the first cases of celebrities using their well-garnered fame to launch their own companies. They were the entrepreneurs, and they were good at it. Contemporary celebrities have now taken up this baton, but they’re kicking it up one notch higher – to the investor level.
While there are more founders defining themselves outside of Hollywood, such as Gwyneth Paltrow with her lifestyle startup Goop, there has been a fundamental shift in the way these stars interact with the world of entrepreneurship.
Actor Ashton Kutcher is best known artistically for his role as Michael Kelso in sitcom “That 70’s Show”, in addition to his founding of film studio Katalyst. However, he is also frequently regarded as “Patient Zero” of the “startup bug”; many have cited him as the ringleader behind Hollywood’s new turn towards the startups of Silicon Valley.
For over a decade, Kutcher has been actively supporting startup companies either as an angel investor or, more prominently, through his venture capital firms. He is the Co-founder of A-Grade Investments and Sound Ventures along with entertainment manager Guy Oseary, and the two have developed quite the high-profile portfolio.
In fact, their investments include Spotify, Soundcloud, Genius, Robinhood, Bird, Warby Parker, and more. To put Kutcher and Oseary’s investment successes into perspective, their contributions to Uber and Airbnb are now worth $60 million and $90 million respectively, but outside of the startup ecosystem, few people realize the scope of Kutcher’s influence in Silicon Valley.
Kutcher is often grouped along with other celebrity investors such as Justin Bieber and Lady Gaga. However, what sets him apart is his decision to support these startups via his VC firms as opposed to a more common and arguably more self-interested brand endorsement approach. It signals a genuine commitment toward the advancement of startup companies.
Kutcher’s involvement in this community has inspired others to dip their toes into startup investments, with Brooklyn-born rapper and artist Jay-Z among them.
Born as Shawn Carter, he is an undisputed key player in the world of hip-hop. Yet, he is no stranger to the world of entrepreneurship, either. Aside from founding his own music production label Roc-A-Fellas Records and clothing line Rocawear, which was acquired for $204 million in 2007, he has also invested in the New Jersey Nets.
While these entrepreneurial and investment decisions set Carter up as one with a savvy understanding of business and investments, he took these interests further when he founded Marcy Venture Partners in 2018.
Named after the Brooklyn apartment complex where Carter grew up, the firm focuses on supporting consumer-service-based startups. It was established in 2018 and has since grown to include 54 investor partners in addition to $85 million raised in funds. MVP invested in 6 startups in 2019, including camping experience platform Hipcamp. He had previously also launched Arrive, another VC firm offering branding and business development resources to startups, in 2017.
It is thus unsurprising that parallels between Kutcher and Carter have been drawn – yet, the two of them are hardly alone in this space.
Hollywood and Bollywood actress Priyanka Chopra has also been actively contributing to and supporting startup companies. Chopra set herself apart from other celebrity investors by building a reputable portfolio with her manager, Anjula Ancharia.
Ancharia has experience as an entrepreneur-in-residence and partner at Trinity Ventures from Silicon Valley. She was the person who originally introduced tech startups to Chopra and thus sees her partnership with Chopra as a link between the star’s Hollywood community and the startup ecosystem of Silicon Valley.
With Ancharia’s industry knowledge, Chopra was prompted to secure an investment in dating and social media app Bumble, a move which would enable her to promote and launch the app in India.
The pair more importantly noticed a distinct lack of gender and ethnic diversity in Silicon Valley. Motivated to make change, they consequently decided to be a part of the $8 million funding road for Holberton School: an coding academy for software engineering.
The school is well recognized for its new-age culture, as exemplified by its coworking-space-like learning facilities across the world. It is also well regarded for its ability to find its students employment opportunities post-graduation.
As a result of their investment in Holberton School, the institution saw an increase in underrepresented minorities within its student demographic, with two-thirds of students now people of colour and 30% now women.
Chopra and Ancharia are making efforts, through their investment in minority-conscious tech startups, to break Silicon Valley out of its stereotypically male-dominated mould. They have emphasized that the end goal is not to jump on the tech bandwagon and make money, but rather to inject more diversity into the world of tech and innovation.
Chopra and Ancharia’s motivations echo Kutcher and Guy Oseary’s philosophy – that investing is less about getting a slice of the startup “pie”, but rather to help in making tangible change in the way we live.
The place of mainstream celebrities in startup economies continues to evolve with the changing startup ecosystem. It seems that these influencers will no longer be entrepreneurs themselves, but prefer to be founders of VC funds instead. One thing is for sure—the presence of the startup community has deeply penetrated into mainstream entertainment.
Hollywood will hopefully continue using its global audience to spread the word about startups and legitimize them further. With any luck, it will broadcast the disruptive efforts of Silicon Valley’s innovators, encourage the abandonment of outdated paradigms, and further foster meaningful technological change to all aspects of our lives.