Insights from MGCS Keynote Speaker Adam Lilling, Founder and Managing Director of Plus Capital
As an investor for the stars, Lilling provides the advice, access, architecture, execution and investment to enable high-profile influencers to make the biggest return on their name and fame. At the same time, he helps them use the power of business to effect change far beyond the sphere of stage, screen and sports. “We advise celebrities and their teams on everything from how to write a check into a venture capital investment all the way to how to become the co-founder of their own company,” said Lilling, BBA ’92, who earned his own credits over two decades as an Internet entrepreneur and startup innovator. “We think about their influence as venture capital.” And, he adds, their ROI as return on influence. The value of that venture capital is determined by reach (how far a celebrity’s voice or image goes), resonance (what authority and trust they bring to a topic) and relevance (how regularly they engage in a particular pursuit).
Hollywood stars and sports figures always have had considerable influence on the public and the ability to help companies sell products and attract attention through paid endorsements and promotions. What’s different today, according to Lilling, is that the advent of social media has allowed celebrities to open direct channels of communication with audiences and to scale the number of followers astronomically. Ellen DeGeneres, one of Lilling’s first clients, is a case in point. “Now Ellen reaches more people online than she does on her television show,” he says.
Influence and audience, however, are not enough. “You can lose those in a minute,” Lilling says. “Authenticity is key.” Celebrities who provide that authenticity want more in exchange these days. Basketball star Lebron James of the Cleveland Cavaliers was given a half point of equity just to wear a set of brand-name headphones and later made $30 million on the sale of the company, according to Lilling. “Authenticity equals equity, not cash,” he explains. “We’re in this moment in time where we have people who are so authentic and rich that they’d rather take a chance on a company to make another billion dollars versus $100 million dollars. We spend time determining the balance between equity value and endorsement value.”
In addition to using their names and social-media networks as venture capital, some of Lilling’s clients, such as actor Kevin Spacey, act as silent early stage investors in companies that are working to bring about positive change. Increasingly, stars and starlets are launching their own product brands rather than endorsing those of other companies. Actress Reese Witherspoon recently launched Draper James, a line of designer women’s clothing, and raised $10 million in venture capital. Degeneres also took the plunge into retail business and launched ED, a lifestyle brand of women’s apparel, accessories and home décor that personally connects her with consumers around the world. “She’s the brand behind the brand,” Lilling says. “The amount of revenue she can drive with licensing deals makes your head spin.”
But deal making is not necessarily the pathway to success, Lilling insists. “Most deals fail because they were just deals,” he says. “When the deal is authentic, then it’s worth it.”