Smart Celebrity Investors – Ashton Kutcher, Serena Williams, et al

‘A-Grade Investments’ and Other Successful Celebrity Ventures

You may know Ashton Kutcher from That ‘70s Show or Dude, Where’s My Car? However, Silicon Valley knows him as a star founder of A-Grade Investments, a venture capital firm. Kutcher started the project with Guy Oseary, Madonna’s manager, and billionaire Ron Burkle. They turned $30 million into $250 million in less than ten years. Consider some smart celebrity investment models.

How do some celebrity investors go from angel faces on the silver screen to angel investors in real life? Barring celebrity investment flops like Eva Longoria’s restaurants or Kevin Bacon’s losses to Bernie Madoff’s Ponzi scheme, celebrity investors have had great success through smart investment strategies and, surely, due diligence.

Here are three smart celebrity investment tips you can ponder.

Successful Celebrities Invest in What They Know

Berkshire Hathaway CEO Warren Buffett’s most popular advice, repeated throughout his career, is to invest in what you know. He calls this comfort zone the “circle of competence,” maintaining investments within a relatively small circle of industries he knows and understands.

This golden rule works for celebrity investors. Serena Williams has invested in more than thirty women- and minority-centered companies through her firm Serena Ventures. Her sister had a hand in sports investments, including a stake in the Miami Dolphins. Leonardo DiCaprio, a passionate environmentalist and proponent of plant-based eating, was an early investor in Beyond Meat, a meat alternative company.

In May 2019, well after DiCaprio’s initial investment, Beyond Meat went public for $241 million. Today, 50% of Internet users have heard of the brand. Madonna invested nearly $1.5 million in Vita Coco coconut water after drinking it on tour. Now, Vita Coco is a top player and still making headlines.

Celebrities Participate in Impact Investing

What do millennials like? Organic food. Millennials want our polar ice caps cold. They seek out goat yoga and wellness retreats. Impact investing is popular among millennials and younger investors. Stars are riding the generation’s cultural wave to new heights. Beyoncé, Aaron Rogers, Anne Hathaway, and lots of other celebrities have invested in healthy living companies – food, clothes, cosmetics, healthcare, and meditation apps.

As Gen Z enters adulthood, those celebrities are investing in sustainable companies, and green initiatives – environmentally and socially sustainable entities.  For 30 years, the MSCI KLD 400 Social Index –  comprised of companies with outstanding Environmental, Social, and Governance (ESG) ratings – outperformed the S&P 500. Companies with strong ESG ratings have positive financial returns. So, why not make money while doing good?

Leonardo DiCaprio is a high-profile celebrity investment mogul. This year, Leo invested in Neat, another plant-based, sustainable meat alternative. Neat’s website mentions plenty of sustainability keywords – vegan, carbon footprint, and ethically sourced, for example. In April, the company announced plans to expand globally.

Celebrities Invest in Tangible Assets

Why are tangible assets a good investment? Because they aren’t tied to stock market volatility. Some tangible assets appreciate while others don’t. Consequently, real estate, a sector that traditionally grows equity, and art are popular among celebrity investors. Beverly Hills has no shortage of elaborate real properties or highly sought-after artwork.

Demographics is a key to buying profitable real estate whether the buyer plans to flip or rent. Nobody leverages demographics better than Ellen Degeneres. She has made a tidy nest egg buying homes, fixing them up, and selling them at a substantial profit. Real estate gains are often thought of as long-term, but, Ellen and her wife, Portia De Rossi, have managed to make quick cash with dozens of home sales. They purchased one home for $40 million, renovated, and sold it for a $15 million profit. They’ve sold homes to Will Ferrell, Ryan Seacrest, and other Hollywood notables.

Then, there are the art collectors. In their homes, Jay-Z and Anderson Cooper display works from famous artists. Cooper’s collection, boasts a Jeff Koonz purchased for $1.4 million and also includes works by Njideka Akunyili Crosby and Anton Raffael Mengs. Jay-Z has an original Andy Warhol, Rorschach, on his wall. He and Beyoncé seek out up-and-coming artists’ work anticipating that they will become important future assets.

Like vintage designer handbags, art is partially valued by the artist’s collectability and the work’s provenance. Collecting art isn’t a hobby or an ego stroke;  it can be a sound investment and an exciting diversification.

Invest Like a Star with Celebrity Investment Experts

Whether you love football, dance to hip-hop, or stay glued to the Oscar presentations every year, your favorite celebrities make smart investment decisions. Any investor can use celebrity investment ideas to enhance their portfolio.  Celebrities are just people. Sure, some have fallen for the hype of a doomed startup, but a good number of others do their homework and build their fortunes to fund other people’s dreams ultimately. So, think like rapper Nas, whose firm Queensbridge Venture Partners has backed Lyft. Use your money to reach for the stars.

We think you’ll also like:

• ESG Investors and the Food Revolution: Embracing a Plant-Based Diet

• The Fine Print on Investing in Venture Capital

• “Investing” in a “Collectible” NFT is Neither Smart Nor Really Even Possible

[Editors’ Note: To learn more about this and related topics, you may want to attend the following on-demand webinars (which you can listen to at your leisure, and each includes a comprehensive customer PowerPoint about the topic):

1. Due Diligence Before Investing
2. Alpha, Beta & Other Key Concepts
3. Capital Raising

This is an updated version of an article originally published on Month Day, Year. It has been updated by Courtney Smith and Maryan Pelland.]

©2022. DailyDAC^TM, LLC d/b/a/ Financial Poise^TM. This article is subject to the disclaimers found here.