This Buffettism Made Jay-Z Billions Beyond His Music
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| By Chris Graebe |
I’m hosting my Spring 2024 Private Investment Summit in just a few hours. Click this link a few moments before 2 p.m. Eastern to attend. In the meantime, read on for why you should attend …
Mr. Shawn Corey Carter is a world-class rapper and music mogul from New York. Only The Beatles have spent more time atop the Billboard 200 albums chart, with 19 No. 1 records to his current 14.
But his music catalog is just part of why Mr. Carter — better known as Jay-Z, who’s married to the “Queen Bey” herself, Beyoncé — became the world’s first hip-hop billionaire.
He also has a sterling reputation as a businessman within and beyond the entertainment industry. But it’s the way he’s invested his massive earnings that should soon earn him more money than all his businesses combined.
I’m Talking About Angel Investing
Angel investors are individuals who invest in startups in exchange for a stake in the business and/or other potential rewards, such as royalties.
While there are no guarantees that any investment will pay off, the risks are higher with companies who are still building their businesses. But for the ones who get it right, the potential rewards for their earliest backers can be quite memorable.
So today, I want to talk about the companies that Jay-Z invested in … which ones brought him big returns … and how individuals like us can find success following his strategy.
I’ll also share a simple piece of advice that Jay-Z learned from Warren Buffett. These few words changed everything for the rapper.
If you follow that same guidance, you could be well on your way to success in the exciting world of startup investing.
Early Success to Build On
Back in 2005, Jay-Z jumped into the deep end of the angel investing swimming pool. By this I mean he put money into the multicultural cosmetic brand Carol's Daughter.
Since that year, according to Crunchbase, the rapper has invested in close to 66 startups through his personal portfolio and his venture arms Rock Nation and Marcy Ventures.
Of those startups, Jay-Z has had the pleasure of seeing nine exits or IPOs across a wide range of sectors including cosmetics, applications, ride sharing, even alternative food and allergy companies like Impossible Foods.
He’s also jumped into developer platforms and retailers like the brand Fanatics to diversify his portfolio.
Jay-Z also leaned heavily into the advice he heard from Warren Buffett years ago: “Just invest in things you believe in and understand.”
Many of Jay-Z’s businesses center around things that he personally enjoys.
For example, he’s interested in clothing and entertainment. So, he invested in those areas. Jay-Z once said about his companies, “they’re close to me. It’s not like running General Motors (GM), where there’s no emotional attachment.”
While you might not be starting companies from scratch, you can still invest in things you know and love. For example, you can invest in private companies whose products you personally use and that haven’t yet been discovered by Wall Street.
I couldn’t agree more.
We’re also on the same page in our belief that investing in startups as angel investors is a great way to build generational wealth.
Jay-Z is certainly doing his part. So, let's take a look at those startups he invested in that were acquired or went public through an IPO.
Millions to Billions
I think you’ll be surprised with the last company I share with you, but first up is … Carol's Daughter. As I mentioned earlier, it’s the very first investment that Jay-Z jumped into. The startup sold to L'Oreal in 2020.
Another company, JetSmart, was coined the “Uber of private jets” at one point and eventually acquired by Vista Global.
Lastly, came the granddaddy of Jay-Z's investment portfolio: Uber. Based on Crunchbase’s data, it appears that he invested in a series C round in 2013 when Uber’s value stood at $363 million. Today, the ride-sharing company that went public in 2019 boasts a market cap of roughly $162 billion. That’s right, billion with a “b.”
Let me be the first to say, “Congrats and nice work” to Mr. Jay-Z — who, based on the below list of his business ventures, obviously didn’t stop his startup investing journey with Uber.
Valued at more than $2.5 billion, Jay-Z is one of the most influential figures in the world of music, business and philanthropy.
With a net worth that has soared to new heights, Jay-Z’s financial success can be attributed not only to his iconic music career … but also to his shrewd business ventures.
As the founder of Roc Nation, a full-service entertainment company, and co-owner of the streaming service Tidal, Jay-Z has demonstrated a keen entrepreneurial spirit that transcends the boundaries of traditional music stardom.
While exits are the Holy Grail of the startup investing world, that simple but powerful advice from Buffett about investing in things you understand and like also holds a lot of merit.
If you understand a company’s business and goals well enough, you’ll feel confident enough to take the next step and invest in that startup.
That’s true for folks new to startup investing or those who don’t even realize that everyday investors can access these opportunities.
So, take a page from Buffett’s book of wisdom: Invest in what you know and understand.
I know I’ve learned plenty from both. And from other billionaires like Mark Cuban and Kevin O’Leary, whose names are practically synonymous with angel investing.
And today at 2 p.m. Eastern at my Spring 2024 Private Investment Summit, I’m revealing details about a private company that’s looking to transform an industry Americans spend $500 BILLION per year on. And how you could get in before the angels and other “big guys” out there. Click this link, and you’ll see what I mean.
Until next time, my friend!
Happy hunting,
Chris Graebe
