I am definitely intrigued by collisions between pop culture and venture capital. It’s pretty weird to see your profession turned into entertainment, particularly when the average board meeting is about as entertaining as watching paint dry. Despite that, there have been numerous forays into the field by athletes and entertainers, who apparently have secret market research demonstrating that term sheets are sexy enough to attract a prime time audience.
As one example, there has been a recent parade of reality TV shows where entrepreneurs pitch their deals to panels of venture capitalists and wealthy angel investors. These shows include American Inventor, Shark Tank, Dragon’s Den (aired in the UK and Canada, among other places) and Money Tigers (aired in Japan), which may well have been the first. Amazingly, a variant of these shows runs in countries all over the world, including such non-obvious places as Afghanistan (combo pork product/burkah anyone?), Turkey, the Ukraine and Nigeria. I’m guessing the Nigerian deals arrive by email and involve wire-transferring $10 million dollars to a wealthy ex-royal who promises a hefty profit later.
Of these venture reality shows (as if reality ever enters into it) I have only watched Shark Tank, which has some pretty bizarre dynamics. Needless to say, the deal flow is a bit different from mine; you get to observe people who have developed everything from the Wakin’Bacon (a combo pork product/alarm clock), to Vurtego (the “best pogo sticks on the planet”) to the Caddy Swag (a 6-pack cooler that fits in your golf bag) compete to get the rich and famous to back their deals on the spot with cold hard cash. This season Shark Tank has added Mark Cuban and Jeff Foxworthy to their panel of expert investor judges. I hope this season’s entrepreneurs are smarter than 5th graders or Foxworthy is never going to come back next season.
I have to say that my favorite of these shows is Canada’s Dragon’s Den because they actually quoted me on their website. Welcome to my 15 miliseconds of fame.
Celebrity venture partners are another example of what happens when venture capital and pop culture collide. Some super-successful venture capitalists have become celebrities as a result of the companies they have helped develop, such as a few of the guys from Kleiner Perkins and those behind Facebook, but it has also gone the other way. Over the years I have been in the business I have read about a number of very successful and wealthy musicians, athletes and actors who have joined up with venture capital, private equity and related firms in a formal capacity. The list includes Bono, Ashton Kutcher, Joe Montana and Ronnie Lott, among others.
Some of these celebrities have shown a propensity to be particularly entrepreneurial, so it’s not so surprising to see them enter the more structured world of finance. Many celebrities have created major international businesses around the product that is their own persona, so why not diversify? You can only buy so many Lamborghini’s and Italian villas with all that cash.
However, I have to say that I was a bit surprised to hear that the newest celebrity entrant to my field is–wait for it–MC Hammer. Yes, that MC Hammer. The parachute pant-wearing, Can’t Touch This-singing dude we all remember from the days when he and Vanilla Ice ruled the airwaves. MC Hammer, who at least does live in Silicon Valley, has apparently been out there building an entrepreneurial empire out of the dust that was his originally extremely successful music career. Unfortunately, he declared bankruptcy in 1996, losing a vast fortune through poor financial management (irony alert). But like any real entrepreneur (the guy did sell 50 million records after all), he apparently picked himself up, declared himself 2 Legit 2 Quit, and started to rebuild his career through producing other musicians and angel investing in a variety of tech and music start-ups.
This last week Hammer announced that he is joining up as an investor/mentor in a new technology company incubator. Really, I swear. According to Venture Wire, “Hammer, whose real name is Stanley Burrell, is lending advice to minority entrepreneurs in the New Media Entrepreneurship, or NewMe, accelerator program in Silicon Valley this summer. Starting June 16, seven minority-led start-ups from across the country will live in a rented house in Mountain View, Calif., and can work there or in a shared space in San Francisco. Additional Bay Area start-ups will also be invited to participate, but will not live in the house.”
Wow. Venture Capital meets America’s Next Top Model and Jersey Shore without the abs (if a bunch of engineers are in a house together inventing social media companies, I am guessing that the only six-packs in residence will say Heineken on them). I have a hard time imagining a world where a bunch of aspiring CEOs share a house. First of all, it’s going to have be a damn big house to fit all the egos generally present among this crowd. Second of all, there is no house big enough in Silicon Valley to provide enough wall sockets for this kind of enterprise. They better get themselves a back-up generator for when the circuit breakers blow.
According to reports, a variety of “real” venture capitalists and technorati have signed on to support the NewMe venture, including Brad Feld of Foundry Group and Charles Hudson of SoftTech VC, as well as executives from a variety of companies including Foursquare and Twitter. Apparently these guys will participate as advisors in a 9-week summer program to provide guidance to the would-be entrepreneurs that are kicking it in MC Hammer’s living room. I am guessing that, given the abundance of middle-aged white guys who will be their guides, the entrepreneurs will not be allowed to play Dance Dance Revolution during their down time–MC Hammer would win every time.
According to its website, the NewMe program itself consists of a mix of mentoring, mingling with other Silicon Valley startups, dining with venture capital and angel experts and working together to create a shared ground-swell of entrepreneurship. From June 16th-August 18th, 2011, aspiring companies will develop their products and then do a big show-and-tell for the start-up community. There is nothing on the website that describes the method by which start-ups will be voted off the island. Oh, wait, that’s another show.
Crazy as it sounds to combine the tenets of reality television with venture capital and entrepreneurship (will CEO’s sit around in small groups talking about which one should be kicked out of the house for monopolizing the bathroom?), it is great to see a program that is truly focused on engaging the minority and female entrepreneurial community in this way. There are even three bona fide females among the board of mentors, representing the obligatory <15% (and not a percentage point more) of chicks allowed to gather in any private equity discussion. From the website it appears that 5 of the 7 participating companies have already been selected and 2 of them have female founder/CEOs, so that is great. Inkeeping with the true roots of the reality-TV-like movement, the remaining two companies will be selected through a vote of the “community”. Gotta love it.
I will be very curious to see how this program plays out and whether real companies can emerge from MC Hammer University on their way to becoming next year’s Pandora or Living Social or Facebook. It would be fantastic if NewMe were the beginning of something that inspires new ideas and brings fresh new blood to the field, because every industry can benefit from a new way of doing things. With the venture capital field undergoing a major transition of its own and early stage companies finding it harder than ever to find seed capital and the mentor-ship that often accompanies it, anything that fosters innovation and marries it with capital is a good thing for our industry and our country. I sincerely hope that after 9 weeks of co-habitating, the last thing these entrepreneurs will hear is MC Hammer’s follow-up hit, “Can’t Fund This.”