Justin Bieber, Venture Capitalist?

By on December 24, 2013

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Having been discovered on YouTube during the birth of social media, it’s no wonder the young pop phenom Justin Bieber has been using his tech and social-media clout to grow his worth. Justin Bieber’s fortune tops out around $80 million, which translates to somewhere in the ballpark of $3 million in venture investments. You might be asking yourself the question, what does a young 19-year-old teenage icon do with all that cash? He diversifies by turning fame and quick money into long-term riches. Not one to dabble in the stock market, he sets his sights on private tech start-ups. He invests only in things he likes, not just what gets thrown his way. His manager Scooter Braun has a team of investment hunters that turn them on to investments and Bieber has been known to bring a few ideas to the table as well.

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Bieber directed his interests towards investing in 2009 and his story sounds similar to that of another boy band mega star sharing the same first name––Justin Timberlake––who also wears a venture capitalist hat.

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Bieber has been known to invest in a dozen or more ventures, but here are the top three:

 1. Shots of Me

Founded by RockLive’s CEO John Shahidi, Shots of Me is a mega-hit with high schoolers and young 20-somethings. Bieber led a $1.1 million seed round in the company along with venture capitalist Shervin Pishevar, whose Instagram is littered with images of the pop star, and boxer Floyd Mayweather. Shots of Me is a self-portrait photo sharing iOS app that launched in November of this year. Betting on teen’s insatiable addiction to snapping selfies (translation: photos taken of yourself) the Instagram-style internal social network app is nothing short of a vehicle for vanity. A real-time photo sharing app. Yep, that’s it (for the moment), nothing more, nothing less than just taking, sharing, and liking selfies.

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With a surplus of photo apps already available is Bieber’s influence enough to come swinging at Instagram and hunt for its 150 million highly engaged users?  Shahidi isn’t holding his breath, but with others such as Snapchat, Frontback, and the unlaunched Selfie, there’s not a lot of pie to go around.

2.      Spotify

Spotify is social. Share music on Spotify, Facebook, Twitter, your blog, anywhere. The disruptive music service founded by Daniel Ek and backed by everyone from Sean Parker to Li Ka-shing makes streaming and sharing music a breeze. Spotify lets you follow friends, artists, and organizations and it provides up-to-the minute updates and access to millions of songs. The app is easy to use, intuitive and is a great way to discover music by your favorite artist.

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Bieber’s decision to get involved in tech investing came from his manager, Scott Braun aka “Scooter,” who decided to wield Bieber’s social media power (Bieber has 21 million Twitter followers and 43 million Facebook fans) to hone in on his loyal fan base.

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Bieber’s intent for taking stake in early stage start-ups is not equity-for-endorsement deals, but rather cash investments much like traditional investing. The young rock star doesn’t just drop his money and walk away, banking on his money working for him––he’s actually playing a role in the businesses by tuning in on conference calls and learning the business inside and out. Bieber has shown that he is dedicated to the companies he invests in and told Forbes, “Each week I’m learning something about my business and what I need to know for my career.”

3.      TinyChat

Bieber and Braun joined a $1.5 million financing round for Tinychat––a free, web-based video/audio/desktop chat system. It works on all browsers and operating systems and is simple and easy to use.

TinyChat

Launched in 2009 by Dan Blake, TinyChat is not so tiny anymore. In addition to Bieber and Braun, celebrities such as P. Diddy and Ashton Kutcher are also in on the TinyChat action. The service offers thousands of chat rooms and the ability for users to create their own virtual chat room on any topic or category. The chat rooms can contain a rolling maximum of 12 video feeds and dozens of audio feeds at the same time. A person can choose to chat in multiple rooms at once.

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Based in New York City, it’s privately owned by Numerl LLC and is one of the largest voice and video chat communities on the Internet today with over five million minutes of usage per day.

So, does Justin Bieber have a knack for investing or is he just sticking to what he knows best? Some may claim that he is leveraging his fame for a stake in promising start-ups. Yes, he is bringing his celebrity status to the table and a gazillion fans, but what does he actually know about the nuts and bolts of running a business? Adversaries challenge Bieber’s business experience and while he might have the cash and talent, does he have what it takes to truly be a venture capitalist? Lacking expertise, knowledge base, and business connections could make Bieber just a brand with deep pockets. Smart start-ups are well aware that in order to grow long term, they are going to need more than just cash and a pretty face. Shirtless selfies make young girls swoon, but it’s the dough that grabs a tech company’s attention.

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Matthew Toren

About Matthew Toren

Matthew Toren is a serial entrepreneur, mentor, investor and co-founder of YoungEntrepreneur.com. He is co-author, with his brother Adam, of Kidpreneurs and Small Business, BIG Vision: Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right (Wiley). He's based in Vancouver, B.C.