It wasn’t that long ago that start-ups were having a tough time raising money. Given the volatile nature of the economy, why would anyone want to put money into a high-risk venture like a start-up.
Today, start-ups are sexy. This may have to do with how the Internet is becoming more integrated into how we play and work. It be the lower barriers to entry given the “lean startup” can take advantage of reduced development, software and hardware costs. It may be that investing in a start-up allows people to be entrepreneurs without doing any of the grunt work.
So is it a surprising to a see a 16-year-old pop star decide to jump on the start-up bandwagon? Yup, it seems Justin Bieber is pumping some of his pop dollars into startups, possibly through a venture fund called Consigliere Brand Capital, which also involves fellow Canadian and NBA superstar Steve Nash.
If you’re looking for a positive spin, it makes sense for Bieber to put some money into start-ups as a way to diversify the mega-millions he’s making from selling music and putting on concerts for a growing army of teenage girls. For all we know, Bieber is also investing in GICs, stocks, bond, time-share condos and chocolate chip cookie futures.
If anything, Bieber’s interest make it clear that startups are the new black. They’re cool, sexy, fun and there’s the potential to hit the jackpot if Google, eBay, Microsoft, Yahoo, AOL, et al comes along with their M&A warchests.
For high net-worth investors, startups are the equivalent to buying lottery tickets for the rest of us. When you invest in a start-up, you’re buying a dream as opposed to a reality given the failure rate for start-ups is so high. And just as spending a $1 or $5 on lottery ticket is not a big deal when you don’t win, the same goes for a start-up that fails if you’re wealthy.
The difference with a start-up is it’s public entity that has cache for entrepreneurs and investors. Investing in a start-up lets you hang out with the entrepreneurs and fellow investors, rub shoulders with other start-up investors, and promote your investments on social media. It’s all good.
The question is whether there is a downside to start-ups being the new black? Does it mean a flood of unsophisticated money into the marketplace? Could it mean too much money looking for opportunities? Or could it see some start-ups attract money even though their idea isn’t so hot?
The upside is more financing for start-ups. Who knows, maybe Bieber, a native of Stratford, Ont., will jump-start investments in Canadian start-ups.
I’m not sure as an investor, or as a start up looking for financial support I would want to be associated with a firm with a name like Consigliere. Choosing a name associated with crime syndicates seems like an odd choice.
I should talk to David Crow and see if we can’t book “The Biebz” for a DemoCamp!
Maybe Justin could sing a song or two, while you accompany him on the accordion.
Thanks for the comment. Mark
As an Canadian entrepreneur, the negativity in this post reminds me of a story Robertson Davies used to tell of being at a party in Ottawa when news came in that Lester Pearson had just been awarded the Nobel Peace Prize. As the story rippled through the crowd one of the more Conservative women exploded in indignation, asking “who the hell does he think he is?”
Unless you’re in the entertainment industry and have done better you should stop picking on Bieber or assuming that his accomplishments are easy or accidental. Canadian startups need early stage capital and mass market visibility. Bieber has the ability to provide both. So it’s fantastic that he’s able and willing to do this, and it sure beats what I was doing at 16.
The point of the post was more tongue-in-cheek as opposed to negativity. I’m a huge supporter of the start-up ecosystem so welcome all comers when it comes to financing them, particularly in Canada where too many good ideas never gain traction because they can’t even raise a small seed round. I appreciate the feedback. cheers, Mark
Justin Bieber: tech start-up investor? | FaceColony.com
[...] proof does Business Insider, or anyone else, have? Well, so far nothing that has been released publicly. But Business Insider’s Alyson [...]
Since the little rant of my own i doubt gets approval, i will state what i said in a more civilized manner. Trevelyn, i would respectfully like to ask you a few things. First and foremost, how in any way, shape, or form was this post negative or picking on the birbz at all? Why are you ranting on something that simply didnt happen, i re-read the article three times to make sure but i saw nothing of the sort. Which leads me to believe your just trying to stir up poo poo
Another question i have is was it really nescesary in your opening statement to let and make sure everyone here knows you are an “entrepenuer”? Where i come from its usually the people who dont have to exclaim
Justin Bieber: tech start-up investor? | 100wizard News Site
[...] proof does Business Insider, or anyone else, have? Well, so far nothing that [...]
Sometimes silent money can be better than sophisticated money. I would assume this is exactly what you’ve suggested: investment