Why Celebs Love Investing In Tech



If you attended Europe’s largest tech conference recently in Ireland, you probably wouldn’t have known Europe had just gone through one of its worst periods in financial history.

Startups – big and small – headed in Dublin for “Web Summit”, in order to market their companies and also find potential investors, many of whom flew over from Silicon Valley.

Several startups told CNBC that this was one of the best times to be an entrepreneur, because the economic downturn was an opportunity for smart individuals to come together and brainstorm ways to help individuals who were struggling because of Europe’s slow recovery. That should be welcomed by European consumers, who are faced with the threat of deflation and slowing wage growth.

But while Europe’s entrepreneurial spirit may be well and strong, that doesn’t mean it is an easy place to grow a company.

The CEO of U.K. start-up Hassle.com—described as Hailo for cleaning services—admitted that despite the strong interest in start-ups, raising capital in Europe was challenging.

However, putting together a razor-sharp business plan made the process of raising a series – A round of funding easier, said CEO Alex Depledge – Hassle.com recently raked in $6 million from Accel Partners.

Celebs flock to Dublin

Meanwhile, investors from Box Group, an angel fund based in New York, told CNBC they were interested in making investments in the European start-up scene but were cautious given their lack of knowledge about European consumers.

Nonetheless, plenty of start-ups showed their commitment to expanding across Europe –- including hotel booking service, HotelTonight, and YPlan, the “going out app”.

The latter has gained popularity thanks to investment from actor Ashton Kutcher. YPlan founder and CEO Rytis Vitkauskas told CNBC that Kutcher and fiancé Mila Kunis had used the YPlan app while in London and had “loved their experience”.

Kutcher was one of the first Hollywood celebrities to dabble in tech investing. Since then, Pharrell Williams, Will.i.am, Selena Gomez and Justin Bieber have all been lured in by start-up world.

At Web Summit, pro-skateboarder Tony Hawk told CNBC that he had already invested in Blue Bottle and Nest (which was acquired by Google for over $3 billion this year). Hawk said that he did not consult a financial advisor on which companies to invest in, he simply asked his high-profile friends.

Hawk wasn’t the only celebrity that caught the attention of Web Summit attendees. Adrian Grenier, star of the Entourage series, also took the stage. He discussed the future of music and Wreckroom, a start-up incubator for emerging music artists, in which Grenier is invested.

The question is – do these celebrities have the smarts to invest in the start-up world?

Only time will tell.

Reprinted by permission.

Image credit: CC by Kevin Krejci

About the author: Seema Mody

Seema Mody is anchor of Worldwide Exchange, having recently moved to the UK from CNBC US. She joined CNBC in July 2011 as a reporter focusing on market moving stories that impact Wall Street. Mody also hosted a “Trading the Twicker” segment for “Fast Money”. Previously, Mody was an anchor and reporter at CNBC-TV18 in Mumbai, India. Mody provided India daily market updates on CNBC World’s “Capital Connection” and “Cash Flow.”

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