Musicians make sweet music as top investors in tech unicorns
September 12, 2018 | Blog

Musicians make sweet music as top investors in tech unicorns

What is it about musicians? When they are not tearing up the stage, they have proven quite adept at investing in emerging growth firms.

Here are three musicians who have invested in companies that eventually became unicorns, firms worth at least $1 billion, or startups that achieved significant valuations. Some have already enjoyed nice exits. (Sources: Pitchbook, media reports)

Bono

The front man for Irish rock band U2, whose real name is Paul Hewson, is co-founder and managing director of Elevation Partners in Menlo Park, Calif. Through its $1.8 billion Elevation Partners I fund, the company had previously invested in Facebook and Yelp before their IPOs.

Elevation Partners’ second fund never materialized. Nevertheless, the firms’ general partners, including Bono, invested in Sonos, the wireless speaker maker that recently went public at $15 per share, or a $1.5 billion valuation. Since then, Sonos’ stock has jumped to around $17 per share.

Linkin Park

The metal/rap rock band launched Machine Shop Ventures in 2015. The firms holdings include Lyft, Robinbood and Virgin Hyperloop One, a combined total valuation of $17.8 billion.

Machine Shop Ventures also invested in Blue Bottle Coffee, privately valued at $425 million. Last year, food giant Nestle bought the company for $700 million, giving Blue Bottle a post-acquisition value of $1.03 billion.

Writing for Harvard Business Review, Kiel Berry, the fund’s executive vice president, said the band entered venture capital to help diversify their income, knowing full well that online streaming had severely wounded the music industry.

“Technology has forced music artists to completely rethink the way they approach their businesses,” Berry wrote. “We’ve all had to adapt.”

“The most successful artists in this new landscape have begun to look at new business models and new industries to strengthen their existing brands,” he continued. “They’re extending their brand into areas like technology, gaming, fashion, and lifestyle content — essentially becoming entertainment platforms.”

Nas

The rapper (real name: Nasir Jones) has sold more than 25 million records worldwide, including eight platinum records. Impressive as that is, Nas’ venture capital career might surpass his musical talents.

QueensBridge Capital, of which Nas is founding partner, owns stakes in several top unicorns, including Lyft, Robinhood, and cybersecurity firm Lookout ($1.7 billion valuation). The company also scored some nice exits with PillPack (Amazon agreed last June to buy the online pharmacy for $1 billion, more than triple its previous valuation) and Dropbox (the company went public in March with a $8.2 billion market cap).

But Nas’ most exciting investment right now might be Coinbase, which operates one of the world’s largest cryptocurrency exchanges. In 2013, both QueensBridge and Nas as an angel investor participated in Coinbase’s Series B round of financing. Coinbase, which reportedly received buyout interest from Facebook, is currently worth about $1.6 billion, though some reports say it could be as high as $8 billion. The company already generated more than $1 billion in revenue last year.

Other notables:

Jay-Z (Uber, Spotify)

Justin Bieber, P. Diddy, Dr. Dre (Spotify)

50 cent (Casper)

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None of the information contained in this blog represents an offer to buy or sell, or a solicitation of an offer to buy or sell, any security, and no buy or sell recommendation should be implied, nor shall there be any sale of these securities in any state or governmental jurisdiction in which said offer, solicitation, or sale would be unlawful under the securities laws of any such jurisdiction.

Any securities offered are offered by SharesPost Financial Corporation, a member of FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost Inc. Certain affiliates of these entities may act as principals in such transactions.

Copyright © SharesPost, Inc. 2019. All rights reserved.

Thomas Lee

Thomas Lee

Thomas Lee is the Senior Writer at SharesPost. He was previously a business columnist at the San Francisco Chronicle. Lee has written for the Star Tribune in Minneapolis, St. Louis Post-Dispatch, and Seattle Times. He is author of “Rebuilding Empires” (St. Martin's Press), his book on the future of big box retail in the digital age.

DISCLAIMER: This blog does not contain a complete analysis of every material fact regarding any issuer, industry, or security. The information contained in this blog has been obtained from sources we consider to be reliable; however, we cannot guarantee the accuracy of all such information.

None of the information contained in this blog represents an offer to buy or sell, or a solicitation of an offer to buy or sell, any security, and no buy or sell recommendation should be implied, nor shall there be any sale of these securities in any state or governmental jurisdiction in which said offer, solicitation, or sale would be unlawful under the securities laws of any such jurisdiction.

Any securities offered are offered by SharesPost Financial Corporation, a member of FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost Inc. Certain affiliates of these entities may act as principals in such transactions.

Copyright © SharesPost, Inc. 2019. All rights reserved.