In case you missed it, Dwolla, a new mobile phone payment service, became one of the hottest new startups recently when it landed an investment [1] by Ashton Kutcher.
Kutcher has had a Midas touch when it comes to investments. Word of his participation has helped propel such startups as Foursquare, Airbnb, Zaarly, Chegg, Flipboard, and Skype to new heights, some to pre-IPO valuations in excess of $1 billion within a few years.
Kutcher has become such a powerhouse investor that there are tech blogs offering advice on ““how to get Ashton Kutcher to invest in your startup.” [2]
Other celebrities, such as Justin Timberlake, Lady Gaga, Leonardo DiCaprio, and MC Hammer, are active startup investors. Most of them know very little about technology or business, but they have something much more valuable to bring to the equation: social media clout (or Klout).
The one thing every new product needs is awareness and credentials. Ashton Kutcher is a great investor because he brings with him 10.3 million Twitter followers and 12.3 million Facebook fans that trust his opinions on cool new products. An endorsement from the star can be worth millions in new revenue. It can also spark a flurry of free word-of-mouth advertising as the product or service gets shared.
Two years ago, online peer-to-peer apartment rental service Airbnb was ticking along at $8.4 million in revenue. Then in 2011, the company landed Kutcher as an investor, and revenue soared [3] to $52.8 million as Kutcher recommended the service to his followers. Partly as a result of Kutcher’s presence and star power, the company raised $112 million in new funding [4] last July at a $1.3 billion valuation.
Big corporations are also getting in on the action. Coca-Cola, which invested in Zico Coconut Water in 2009, brought in a half-dozen celebrities to co-invest in the business, including Kevin Garnett, Kelly Ripa, Alex Rodriguez, and model Gisele Bündchen. The celebs drove a fivefold increase in revenue in just one year, and Coke bought out [5] 100 percent of the business, giving them all a handsome return.
As consumers stop watching TV and spend more time following friends and celebrities in social media, this may become the new product launch model. In fact, here are other celebs and the Twitter army they could put to work for a startup:
Lady Gaga (22.9 million followers)
Justin Bieber (20.2 million followers)
Britney Spears (15.6 million followers)
Kim Kardashian (14.4 million followers)
Oprah Winfrey (10.7 million followers)
Justin Timberlake (10.4 million followers)