Why do Celebrity Investors and Influencers Invest in Startups?
Are you looking to raise capital for your startup? Would you like to accelerate the growth of your business and become the product that everybody talks about? Celebrity investors might be an option to fund your food startup and boost its popularity.
Celebrities are Looking to Make Money Too
Celebrity influencers typically have significant capital, and those who invest know they must diversify their income streams beyond their career earnings. As celebrity investors look for ways to expand their assets, startups offer them an opportunity to leverage their brand identity and build their wealth.
Pitch Investors on Shark Tank
Celebrities Investing in Startups
In this guide, we’ll explore how other food companies raise capital through celebrity investors. You’ll learn how to identify and find the right celebrity investor for your food business. And lastly, we’ll inform you on how to pitch these celebrity investors and influencers.
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Why Celebrity Investors are Good Angel Investors?
When it comes to raising capital, entrepreneurs often consider business loans, crowdfunding, venture capital firms, lines of credit, and bootstrapping. But celebrity investors are not a category that is generally brought up.
One might think that you need lots of money to even get to contact or reach out to a celebrity. Or you might think that you don’t have the network to meet people with influence. However, more and more news headlines are featuring how X celebrity is launching or collaborating with X brand.
It’s no secret that in the world of Hollywood your career can start and end at any moment. On top of their career, celebrities may not have experience in the business field. With those risks and limits in mind, their current capital available, and the desire for passive income, many celebrities opt to look for startups to invest in.
Celebrities Can Help Raise Capital
One key difference celebrity investors have from other funding alternatives is that they are already influential. Their popularity and their brand come with an audience that might be ready to try your product just because their preferred celebrity funds or endorses it.
This key distinction might be one of the reasons why celebrity investors are a great opportunity for startups to explore. After all, as Eran Nizri discusses for Forbes, when celebrity influencers share a post or story about a business, they have an “impact quality …it can take on a viral effect.”
With a celebrity as an investor or partner, the scope and the vision for your food startup may expand to horizons you did not expect.
If you want to learn about other capital funding options, or how to pitch investors, contact our team at Crowdcreate.
How do celebrities invest their money?
Because investing is not the celebrity’s full-time job, they usually have a third party to oversee and manage their investments. Some celebrities take less proactive roles and choose wealth management and brokerage services or they opt for real estate investment trusts.
Others are more entrepreneurial and support startups through their businesses like Kevin Hart does through his company Heartbeat Productions. Similarly, other celebrities like to diversify their portfolio and invest in different industries like Ashton Kutcher and they create their capital firms like A-Grade Investments.
Celebrity Investment Firms Are Looking for Deals
Typically, celebrity private funds companies are co-led by other experienced CEOs and their teams, while the celebrities may assess the startups after their management has identified a business opportunity.
Celebrities who create their investment firms may have a more specific goal and strategy that they want to pursue as they support entrepreneurs.
For example, the singer and music producer, Jay Z has Marcy Ventures Partners through which he invests in innovative and mass-market startups like the snacks brand Partake Foods and the canned wine company, Maker Wine.
Rap singer Snoop Dog has Casa Verde Capital through which he invests specifically in cannabis startups. Celebrity athlete, Serena Williams has Serena Ventures to invest in startups that include women and under-represented founders in prominent roles.
Not all celebrities invest in the same way. And, generating passive income through startup investment is becoming more common as they assure their wealth preservation, succession, and legacy.
Although it’s not often considered a feasible funding opportunity, your food startup may offer elite athletes and celebrities the alternative to gain returns from their capital. It’s a win-win for everyone.
How to Pitch a Celebrity Investor?
If celebrity funds are available, how can you make sure your food startup connects with and access this capital? Other routes like small business loans or angel investment may have a more clear pathway on how to pitch.
With celebrity investments, we recommend doing your due diligence and research to start listing your feasible opportunities. Here are some of the questions that you may address as you consider and seek a celebrity investor for your startup:
- How much money are you looking to raise?
- At what stage of funding is your startup?
- When would be the best time to have a celebrity investor involved in the food startup development?
- Do you have a defined customer profile and do you know what’s your target community?
- What is your brand’s story, your envisioned culture, and ultimately, your brand’s identity?
- Who are the celebrities that could identify with the problem your startup is aiming to solve?
- Who is the celebrity that already lives your brand’s story, culture, and identity?
- For the identified celebrities, what communication channel could you leverage if they supported your startup?
- What other revenue streams could you generate if that celebrity supported your startup?
- What key resources do you aim to access if an investor comes into the picture? (e.g. networks, management teams, marketing experience)
- What other key partnership could celebrities help you build (e.g. other celebrities, strategic allegiance with non-competitors, joint ventures)?
Research your Potential Investor
After addressing these types of questions, you may create a list of potential celebrity investors, and look for the best way to contact them. If the celebrity or influencer has already an established firm for investment, you might reach their venture company.
Financial databases like Crunchbase or Pitchbook offer their contact information and other funding statistics with their membership services.
For other celebrities, you might have to contact the third-party agencies that they’ve worked with in the past. Or for those where information is limited on how they invest, you may have to reach their talent representative or agent.
Find Celebrity Investor Email Contacts
Some ways to reach out to celebrities could be through social media platforms like LinkedIn, Facebook, or Instagram; however, you may have to be persistent and it might take a while if they get back to you.
The best alternative is to contact the celebrity’s management company, talent agency, or public relations firm. Wikipedia and Internet Movie Database (IMDB) often list the names of such companies.
If they have a capital firm, they might have open calls for business pitches or contact information to postulate your startup’s pitch as well.
In the case of other celebrity investors like Mark Cuban or Kevin O’Leary from Shark Tank, (in case you haven’t considered pitching for the program), you may contact them directly via email too.
They might be more open to responding than what you think. Mark Cuban reveals that he can get from 750 to 1000 emails with business pitches every day. And, he devotes himself to reading them for a couple of hours daily, the trick is to call his attention.
Lastly, analyze what other brands the celebrity investor funded or collaborated with in the past. In this way, you can see what can potentially attract the celebrity to your startup and brand identity.
Other entrepreneurs who have worked with celebrities may also offer advice. They could inform you on what strategies you can emulate to pitch your preferred celebrity and maximize the value you get from a potential partnership.
What do Celebrity Investors Look for in a Pitch?
There might be two conversations that you can have with an influencer or celebrity; First, you may want that person to fund your startup through equity funding. Second, you might want that celebrity to endorse your product and collaborate with your brand development.
Learn about other crowdfunding & equity funding alternatives
As you research for celebrity investors, identify what’s the goal that each celebrity has behind their capital investment, and make sure your brand is in tune with that purpose.
Create a Pitch Deck with your Business Plan & Financials
Whether your business pitch is for capital or brand collaboration, there are key highlights that you must convince the capital managers and potentially the celebrity.
Typically, you define a problem that your food startup is addressing, and then the solution you are proposing. Also, you identify the people who support your business development and the customer personas.
Capital managers also want to know about your past performance in terms of sales and product validation. And, who could be the addressable market and the long-term vision to expand your business model?
Key attributes investors look for are your point of differentiation and your competitive advantage. Other crucial deal-breakers are your team’s experience and capabilities, plus your projected milestones after being funded.
Lastly, and what might differentiate this pitch from others is the opportunity for the celebrity. Besides the return on their investment, how can the celebrity benefit from funding your startup?
If you are still unsure about how to elevate your celebrity pitch and excel in your investor outreach, you can schedule a consultation with Crowdcreate’s network of startup experts here.
Supporting entrepreneurs, building on their personal brand, and aligning it with your brand’s identity may contribute to enhanced public relations, and continuing to propel their careers and recognition. The fundamental decision factor besides monetary returns can be brand alignment in many cases.
Who are the Celebrity Investors Investing in Food Startups?
Celebrity investors are more than just renowned actors, actresses, or singers. Popular athletes, TV personalities, media producers, or business people who network with famous people might be your next investors.
Often, they might be more selective with the industry they chose to invest in. But also more open to seed-stage startups and the risk involved, compared to capital venture firms.
Food-related startups are usually a safe and easy industry that celebrities or influencers support as no significant knowledge or experience, and therefore time is needed from them to support the business.
Here are some celebrities that are supporting and co-creating food startups in alignment with their personal brand:
Rob Dyrdek: Former skater and star of the MTV reality series Rob & Big has intituted his venture creation studio, Dyrdek Machine. Since 2016, the firm launched 18 brands and exited 5 of them with $450 million in total exit value.
Food startups by the Dyrdek Machine include the snack brand Outstanding Foods and nootropic-infused brands like Mindright. As you can see below, Dyrdek not only supports these businesses but also connects them to other celebrity investors.
Alex Rodriguez: Former MLB player has been a stand for educating on investments, and making him a guest for ABC’s Shark Tank. Through his investment firm, A-Rod Corp he funds nutritional supplements like Goli and Kitu Life Super Coffee.
Rohan Oza: Build his marketing trajectory with the Coca-Cola Company. Leveraging celebrity partnerships, he positioned brands like Smartwater and Vitaminwater. His success in the CPG marketing space also earned him a seat on Shark Tank as a guest investor.
Through his capital firm, CAVU Ventures the celebrity investor specifically funds and directs brand development for CPG brands. Some of the brands they’ve impulsed are the meat alternative Beyond Meat, collagen peptides brand Vital Proteins, the baby food startup Once Upon a Farm, and the oat milk brand Oatly, among many others.
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Strategy to Pitch Influencers for your Food Startup?
From observing and analyzing brands that have been supported by celebrity investors, you will continue to see the same pattern. The business mission aligns with the celebrity’s personal brand, mission, and identity.
Also, you may also see that more female celebrities are investing in the food space, as Crunchbase News reported. Often, the startups fulfill dietary restrictions or offer a convenience feature for the customer personas.
Again, it shows that celebrities seek to support entrepreneurs who are not often positioned in prominent roles; this is a mission that is predominating the entrepreneurial sphere.
If your brand is guided by a strong and compelling mission for the celebrity investor, your food startup will have the opportunity to access the capital available and accelerate the promotion of your products.
If you build a distinct mission you can create a movement that mobilizes not only one celebrity but also many others as they network and talk with each other.
This is the case with brands like low-carb cereal, Magic Spoon. Investors include Shakira, Russell Westbrook, Halsey, The Chainsmokers, Nick Jonas, Amy Schumer, Odell Beckham Jr., and Nas., as Food Business News informs.
Looking for Celebrity Investors for your startup?
That’s what we do here at Crowdcreate. We’ve rated the #1 Investor Marketing Agency and have helped with some of the most successful companies in the world.
Pitch Celebrity Investors & Influencers to Raise Capital
Celebrity investors might be a more viable alternative than what you expect while looking for capital. The process of reaching out and pitching your business in front of a celebrity doesn’t look the same for every food startup.
By researching and creating a targeted pitch, you can attract a celebrity to promote and invest in your food startup. Learn how CrowdCreate has helped other startups launch their project through investor marketing.
