The Secret Of Ashton Kutcher's Venture Capital Success

Posted: Dec 30 2013, 12:41pm CST | by , in News



The Telegraph carries an interesting little piece trying to work through why Ashton Kutcher is such a success as a venture capitalist in the tech space. And there is a bit of head scratching possible here: the tales of those good at acting (or any other art for that matter) who are also hopeless with money would fill the entirety of this site with room to fill another. And as far as they do come up with an answer it’s that he knows his stuff in this tech space: therefore he’s capable of seeing what might work and what might not. That is, I think, true as far as it goes but I also think that there’s one more thing to consider.

Kutcher also made some solo investments before A-Grade was founded. He owns a portion of Foursquare, the social network which allows users to “check in” to locations, and in 2009 he was persuaded by Marc Andreessen, one of Silicon Valley’s most prominent investors, to take a stake in Skype.

It was a good tip. Two years later, Microsoft bought the online video call company for $8.6bn. According to reports, Kutcher tripled his money.

A-Grade itself has invested in YPlan, Uber, Airbnb, Getaround….it’s a pretty good list of investments. And of course there have also been some failures.

Kutcher himself points out that he does actually have an investing philosophy and it’s really not so much about tech at all. It’s about whether what the tech is being put to actually solves a real world desire of people:

“If we can create efficiencies in that which is mundane, then we accelerate our paths to happiness,” he explained in an interview recently. “The companies that will ultimately do well are the companies that chase happiness. If you find a way to help people find love, or health or friendship, the dollar will chase that.”

All of which seems fair enough really. Kutcher goes on to make one other very good point. There’s always something of a chase to get into the best of the start ups: there’s more money chasing good ideas than there are such good ideas. And that’s where being Ashton Kutcher is a great benefit. He may not end up getting into all the investments he wants to at the price he desires but his fame does indeed mean that people are going to return his phone calls. And that is a real advantage whether you’re in VC investing, selling freelance pieces to editors or, if truth be told, in just about any business adventure. Having something, whatever it is, that makes people willing to give you that 5 minutes of their time so you can pitch to them.

There’s one more thing I would add that I’m sure helps enormously. As the Forbes rankings show, he’s got a considerable income from his TV work. That means that he’s got cashflow: he’s not got to hustle to convince others to invest their money into a fund which he then invests (or at least, when he started, he didn’t) and so he can concentrate on the opportunities in front of him. He’s also had no pressure to invest in something, anything, simply because he’s got a fund that needs investing. And there’s also the obvious point that he’s been investing his own money: and we do tend to think that people do better when they’ve their own skin in the game. You know, this economists’ idea that incentives matter?

Certainly so far it’s a very decent investment record indeed but my own bias would put more weight on that last of those reasons than many others perhaps would.

Source: Forbes

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