Justin Bieber, Venture Capitalist

http://www.forbes.com/global/2012/0604/celebrity-100-12-justin-bieber-investments-venture-capitalist.html

by Lednakashim • 14 years ago

86 36 14 years ago

forbes.com

enki• 14 years ago

A hip kid investing in things he likes probably has a higher hit-miss ratio than most VCs... :)

robryan• 14 years ago

Especially when he also has a stack of power to influence the fortunes of investments that he makes.

protomyth• 14 years ago

The music's world version of VCs is to own your own label and sign new artists. One of his was sitting at #1 on iTunes, so he seems to get the concept.

Axsuul• 14 years ago

Props to Usher as well.

pdeuchler2• 14 years ago

"These deals aren’t equity-for-endorsement trades. Bieber put cash into each one, and few of the companies have promoted their links to the singer. Spotify, which is still working to establish itself in the U.S., wouldn’t even discuss Bieber’s investment."

"Bieber has come a long way in the finance department since I first broached the subject with him a bit over a year ago. 'I have a business manager,' he told me at the 2011 Grammys. 'That basically sums up the question.' Today that’s changed: 'I do calls every week with my business manager and my lawyer,' he says. 'Each week I’m learning something about my business and what I need to know for my career.'"

"His eye for technology and trends ultimately determines the go or no-go--and some of the investments have come through his own contacts--but the guy actively scouting deals, whether venture capital investments or brand extensions, has a nickname worthy of a teen idol’s manager: Scott Braun, known to all as Scooter."

"On the tour Bieber will be showcasing the more grown-up fare of Believe--a crucial step as he tries to transition from teen idol to adult icon. 'It’s not really a transition, it’s just opening doors,' he insists. 'I’m trying to make music that’s a little bit more mature and that can appeal to all ages, and I’m not trying to lose my younger fans.'"

It sounds like he's essentially paying for glorified advertising and/or making marketing deals. Hardly "Venture Capital". Looks an awful lot like a puff piece to me... "teen idol to adult icon"?

nl• 14 years ago

Some VC firms like to say they bring value beyond their money. In this case it's actually true.

corin_3• 14 years ago

Given the monetary value of his time you could argue it an investment on its own, but since he is investing cash I don't see any way this isn't "venture capital".

pdeuchler2• 14 years ago

"all venture capital is private equity"

http://www.privco.com/knowledge-bank/private-equity-and-vent...

citricsquid2• 14 years ago

Justin Bieber blows my mind every time I read about him and I really respect him (mainly because his life is insane and he somehow hasn't screwed it up yet) but his success is much more his management and Justin Bieber (the brand) is a story of how good management can make a success.

Just looking at how the entertainment industry works is fascinating, they can create such incredible brands in so little time. Take the boy band "One Direction", every single teenager in the first world has heard of them, they haven't even existed for 2 years and the hype surrounding them is huge, they were formed artificially. There's also the boy band "The Wanted" (Bieber's manager Scooter Braun is their manager too) who were also formed artificially, they're growing as a brand too and there is huge hype surrounding them.

The entertainment industry appears to the outside to be very simple, most people think that bands start out and make some music and grow in popularity organically, but that seems to rarely be the case, SOMEONE put every successful musician where they are and often it's a very strategic thing. Entertainment is where the money is.

This is the sort of thing the people that want to "disrupt" the music industry don't understand, they think that artists not getting 100% of their music sales is a terrible thing, what they don't seem to understand is there's a reason the music industry takes a big cut. Justin Bieber would not be making 9 figures a year if he'd sold his music on Bandcamp.

confluence3• 14 years ago

> This is the sort of thing the people that want to "disrupt" the music industry don't understand, they think that artists not getting 100% of their music sales is a terrible thing, what they don't seem to understand is there's a reason the music industry takes a big cut.

People drastically underestimate the difficulty that is present in industries other than their own.

Engineers/Programmers are notoriously bad at this. Disrupt Education/Hollywood/Music/Movies/Medicine/Everything!

Now, they will eventually be proven correct (anything that can be defined; can and will be automated), but it is the systemic underestimation in difficulty that's the problem.

Doing well in any industry is hard, and most people don't understand that when they only have the facile prejudices of various industries to rely upon.

Things are broken, yes. People will fix it, correct. But it is not nearly as easy as people like to think it is.

Coders scream in shock and horror when people call them nothing more than code monkeys (which they obviously aren't) or when people state how easy programming is compared to generating a brilliant idea (it's obviously not).

But coders will scream just as loudly that others aren't very bright, smart, worthy/aren't doing work in their industry correctly.

Things are harder to do than most people, including you or I, can possibly anticipate without the requisite domain knowledge.

jcampbell12• 14 years ago

Off topic, but the whole notion that tech industries "disrupt" other industries outside of tech is confused.

If we list tech companies that massively disrupted non-tech industries, you come up with a list like:

* Napster

* Wikipedia

* Craigslist

* AirBnB

If you list companies that didn't disrupt non-tech industries, and created new value, you come up with a list like:

* Apple

* Microsoft

* Google

* Facebook

* Oracle

* Dropbox

Based on my naive list of companies, disruption of non-tech industries seems overrated.

confluence3• 14 years ago

You have to be careful with that list.

You need to look not just at the direct products produced (which may not be disruptive in the classical sense), but also at the positive externalities that they effect.

Apple made the computer personal when it was founded (or at least that is my impression). That didn't disrupt too many people, but think of all the secondary effects. People could learn to program, people could automate things, they could reduce their reliance on word typesetters, photocopiers, radios, television, encyclopedias - the list goes on.

Oracle did kill a lot of big government/company paper waste (not that there isn't any left :), and stuck it into databases, effectively wiping out an industry and creating the new data warehousing/analysts that we know of today.

Google makes research/discovery democratic - instead of editorial. It allows people to directly connect with what they want (information/news/stuff), disintermediating a lot of advertisting channels at a lower cost (TV/Radio/Newspapers especially).

Microsoft got "a PC on every desk", think of all the secondary effects of that (networking/internet/app development/programming tool etc.)

You see my point?

btipling• 14 years ago

> If you list companies that didn't disrupt non-tech industries

> * Google

...

Libraries and the centuries old librarian profession as well as Yellow Pages, Printed Map books, and oh, privacy.

Also Apple disrupted the record industry with $.99 songs + iTunes and iPod.

Amazon, not on your list, has disrupted retail.

ippisl2• 14 years ago

Look at [1], slides 32-84. There are many disruptive changes mentioned there.

[1]http://www.businessinsider.com/mary-meekers-latest-incredibl...

csomar• 14 years ago

Microsoft Office disrupted traditional spreadsheets and probably reduced the number of employees required to do the work.

Facebook disrupted the traditional way of meeting friends and connecting with them.

Dropbox disrupted movable storage (Flash or Memory cards)

Someone else mentioned Google and Amazon.

wh-uws• 14 years ago

I think you're discounting the fact that Bieber was discovered because of videos that were on youtube

citricsquid2• 14 years ago

No, he was discovered because his videos were on the internet. Scooter Braun misclicked on a link and a video of Justin Bieber played, that link could have been to any website. The value there was the internet, not Youtube. If you want to argue how Youtube plays into the success of Justin Bieber you should look later in the timeline, Youtube was a valuable part after he had gained traction, just like radio and television, it was a platform for distribution (not sure if that's the right word) of the brand.

ippisl2• 14 years ago

Let's look at a related industry: amazon made it that 70% of sales are given to the author. Now if the author want he can give money to marketing guys.If he wants to go alone , he can. He controls the process.

This has definitely given more market power to book authors(leaving aside amazon power grab).

Similar models can be offered to the music industry. They'll just enable artists to get more control over the process.

So the boy band will pay high royalty rate to the marketing guys because he is mostly marketing based, but the amazing new musical talent who seems to get a lot of people via viral marketing will share much less of the money.

kamaal• 14 years ago

>>mainly because his life is insane

Most kids are insane. Such insanity comes because they don't think before they act, they don't worry about risks and so creativity flows instantaneously. I know this as I was insane as a kid. I used to sing at every opportunity and occasion. I won awards at numerous occasions singing devotional songs in Indian classical music genre. I have sung in front of large audiences, in stadiums, before sporting events, tough competitions etc. In fact the only thing I enjoyed totally in school was singing and science exhibitions.

The only issue was 'video camera' was not affordable and accessible at that time. There was no Youtube and my parents thought singing and music won't help me make a living. I begged them to let me learn how to play an instrument. But they didn't let me go close to it.

You will be shocked how many kids are talented but never receive the appreciation and much needed direction they need in the early part of the their lives. A lot of talent goes wasted this way.

If Justin Bieber is what he is today, he is a insane kid who works very hard and enjoys what he does. But he has also had the advantage of getting the right direction and appreciation from people around him.

corin_3• 14 years ago

"His life in insane" is not the same as "he is insane".

iag• 14 years ago

It's very smart for these celebrities to build a brand other than what they're currently doing. Not many singers can be hip for more a few years, and not many models can look better when they go past 40. It's good for these people to build a second career later on so if/when they need to switch, the options are open.

Props to Ashton Kutcher to leading the way for venture investing. Smart move.

rhizome2• 14 years ago

Have either of them been the first investor of something that succeeded yet?

peteretep• 14 years ago

Why do they need to have been the first investor?

tlrobinson• 14 years ago

Well, that's a step up from 50 Cent's pump and dump schemes: http://www.cbsnews.com/8301-505144_162-36943822/50-cent-penn...

DigitalSea• 14 years ago

It's a smart move. You're not the darling of the entertainment industry forever. One day the royalty payments won't be enough to pay the bills, the next flavour of the month has come along and taken your revenue stream, market and fans. Justin Bieber is setting himself up for life, venture capitalism is a good game to get into if you have the cash like Justin to make substantial investments in big tech startups.

Another high profile celebrity doing smart things with their money is Jessica Simpson (she hasn't done any venture capital investing... yet but she has quite a large empire of businesses and investments in the property market). She buys houses, renovates them and then sells them for a profit, not bad for someone who is portrayed as an idiot. She has clothing lines, a perfume range and a whole heap of other pieces of equity.

It always makes me glad to hear celebrities spending their money wisely and at the same time (even if an investment has been given for an expected return much like every other investor would expect) people like Justin are helping the little startup guys get a break and make a difference.

jonknee• 14 years ago

> Justin Bieber is setting himself up for life, venture capitalism is a good game to get into if you have the cash like Justin to make substantial investments in big tech startups.

Did you miss the part about making $105M in the last 24 months? He's already set up for many life times.

MortenK• 14 years ago

When talks fall on whether or not there is a bubble, a common argument is that we shouldn't worry until the cab drivers and waitresses start investing. I wonder if the argument in 10 years will be that we shouldn't worry about bubbles, until the pop singers and actors start investing.

maeon3• 14 years ago

I want to know if he's going to be held responsible for his punching/assaulting the cameraman with moves he learned from mike tyson.

If this whole situation of him assaulting a cameraman is just swept under the rug, with his managers insisting that he never do anything like that again. It will be an indication that news networks can even be bribed to not report on criminal behavior. I think it's funny the managers are trying to cover up all the court proceedings as Justin leaving for a while to do some secret concerts. Galling. I do hope that he fails in life, show me that this world is indeed a meritocracy after all, and that fortune can purchase fame and success for a while. As long as you pay dearly to sustain it.

I wish I had Justin Bieber's Managers propping me up in life, I'd be a world sensation too if that were so.

ktrgardiner• 14 years ago

I doubt he'll get anything more than a slap on the wrist. Not just because he is famous, but because this is his first offense, he has a clean record, and he's unlikely to be a repeat offender.

eshvk• 14 years ago

1. Do you actually expect his managers not to try to put a positive spin on it for the media? A celebrity trial is not exactly in the same league as an everyday misdemeanor case. He has a brand and he should (just like Dropbox or Path or whatever) be allowed to defend his brand.

" I do hope that he fails in life, show me that this world is indeed a meritocracy after all, and that fortune can purchase fame and success for a while. As long as you pay dearly to sustain it. "

This is incredibly harsh. When you say that you "want" him to fail to show you that the world is "indeed a meritocracy", you are implicitly assuming that there is an inherent total ordering in which he comes at the bottom and that this is all that matters. This is a rather flawed assumption for two reasons 1) I am not even sure you can characterize an accurate objective total ordering for music 2) Even if you did, just like in the CS tech world where there are people who are incredibly smart but don't sell their products for a billion dollars, I would argue that musical ability is not really the only thing that matters when it comes to financial success. This is even more true for pop where success is determined by the number of people who enjoy the artist's music (and apparently from Bieber's financial success, it looks like there is a huge bunch of people who like his product and wish to buy it.)

"I wish I had Justin Bieber's Managers propping me up in life, I'd be a world sensation too if that were so."

Remember that he wasn't born with these magical "Managers". He also had to get his break in the wide world before he gets these magical "Managers".

goatforce5• 14 years ago

I don't watch entertainment news or follow gossip sites, so I was unaware that Bieber was in a spot of bother.

I googled for "justin bieber court case" intrigued by your comment about how there was a cover up from Big Media.

Top 3 results for that query?

LA Times MTV CNN

They're doing a really bad job of covering it up.

Justin Bieber, Venture Capitalist

Related Stories