Alternative investments, Ashton Kutcher, Bollywood angels, Celebrity angels, Early stage investment, HNW, Hollywood Angels, Media and Entertainment start-ups, Priyanka Chopra, Salman Khan, sanona.com, Shilpa Shetty, Start-ups, Startup Leadership Programme, UHNW, UKTI, Wealth Management
Hollywood celebrities such as Ashton Kutcher who have invested in startups such as AirBnB and Foursquare are an excellent billboard for early stage investments around the world. Mr. Kutcher seems comfortable investing further afield as in the case of Berlin based Soundcloud and now Gidsy. Bollywood has always lagged Hollywood and here again there may be an opportunity for those that have made fortunes in entertainment and media in India and now have the means and appetite to look at early stage investment opportunities to get serious about start-ups that may be based in London, Berlin, Singapore, Kuala Lampur and a number of North American cities.
A number of wealth management experts based in India were recently quoted in the Economic times as stating that family offices and U/HNWs in India were starting to take an interest in early stage investment opportunities. This is clearly a natural progression for a country that is generating a large number of millionaires off the back of the incredible growth and FDI that the country has experienced over the last decade.
I would wager that most portfolio managers and professionals responsible for managing their clients wealth would not shy away from looking at a few higher risk early stage opportunities but are usually ill-equipped to showcase the best and most exciting start-up deals to their clients as they are so disaggregated from the startup scene. There are clearly exceptions to the rule here with some private banks setting up entrepreneur desks and investing in partnerships and resources that are able to plug into the very heart of the entrepreneurial ecosystem. What is even more interesting is that in a world that is increasingly global a number of these multi-national private banks seldom have deep insight into the right opportunities at the right time when it comes to looking beyond borders. This provides a unique opportunity for boutique intermediaries to work with many U/HNWs as well as private banks to explore the world of some times unchartered early stage investment and help introduce a startup company into their portfolios which have traditionally been heavily indexed towards more traditional instruments and asset classes such as property and even some alternative assets such as art.
Superstar Salman Khan has become a poster child for what the Bollywood Angels could stand to gain from investments in the early stage space. The Times of India reported on Mr. Khan investing in Yatra.com a travel start-up in March 2012. The start-up stands to gain a lot from Mr. Khans ubiquitous face pushing its services as it expands across Tier 2 & 3 cities in India. Mr. Khan’s payoff comes not just by way of a potential exit somewhere in the not too distant future for the company but also through continued contributions to his NGO off the back of each transaction on the site. This is great not just from a CSR perspective for the start-up but also provides yet another excellent investment driver for a UHNW looking to further his venture philanthropy agenda.
Other stars in India have also invested in Indian start-ups as can be seen in the case of big brother winner Shilpa Shetty (featured in a recent article in the Indian Express) who together with entrepreneur Hem Tejuja launched GroupHomeBuyers.com — a group real-estate buying site. Ms. Shetty was quoted in 2011 as having crossed 35 Crore in revenue already. This trend is likely to continue and ‘sweat equity’ contributions from celebrity investors may prove to be invaluable for start-ups looking for that big marketing push in markets where some of these stars command the attention of consumers and businesses alike.
I await the arrival of Bollywood investors in London and deal makers at UKTI and elsewhere have a great opportunity in encouraging those in emerging markets like India to invest in startups such as Sanona.com, a recently launched ‘Bollywood’ on demand platform that is competing head to head with Eros International’s portal as well as other Indian players like Reliance owned Bigflix.com and Singapore based Spuul.com to jockey for the attention of the global South Asian diaspora. Speaking with Sanona CEO Adam Davies, who also happens to be the first entrepreneur in residence at London Business School, I was told that Bollywood is only the beginning and that the platform would also look to capture African and East Asian foreign language content. Bollywood investors in assets such as these would find the perfect fit in that they would not only be benefiting from the increase in sales and distribution of their own movies from the global platform as it feeds content across the world but diversifying their investment portfolios into markets outside of India. The exit then would be just another cherry on top of the benefits pie.
The UK has never seen a better time for investments into early stage companies due to schemes like the Seed Enterprise Investment Scheme and the continued Enterprise Investment scheme both of which can through the right structuring be helpful in making investments into UK startups more attractive than ever before for overseas investors. I am quite sure that in the not too distant future we will see private wealth start to see start-ups as a very serious opportunity area for growth while serving their customer needs and begin to bring ‘smart money’ to help grow the companies that are driving true job creation and taking brand UK global. In a few years time when the Monsoon season hits Mumbai I will most likely not be surprised if I see a few Bollywood stars attending early stage events in London. I can see it now Priyanka Chopra at an Open event for the Startup Leadership Programme in London…