Santa Monica seed-stage fund Struck Capital is adding some high-wattage Hollywood star power to its cast of limited partners. Academy Award-winning actor Leonardo DiCaprio has made what the firm described as a "significant" investment in the fund, bringing something far more valuable than his seven figure check: The ability to open up doors for portfolio companies and attract other investors.
"It's a huge feather in our cap," said Adam Struck, the South African entrepreneur who started Struck in 2014. "It has tremendous tailwinds for every aspect of the fund."
<p>Though this is the first time DiCaprio has backed a Los Angeles fund, he <a href="https://www.crunchbase.com/organization/princeville-global#section-current-team" rel="noopener noreferrer" target="_blank">previously joined San Francisco's Princeville Capital's</a> climate technology fund as an investor and advisor and <a href="https://www.prnewswire.com/news-releases/data-point-capital-expands-advisory-board-300377090.html" rel="noopener noreferrer" target="_blank">Boston's Data Point Capital as an advisor and LP. </a>He also invested directly in prominent startups including <a href="https://www.crunchbase.com/organization/allbirds" rel="noopener noreferrer" target="_blank">Allbirds</a>, <a href="https://www.crunchbase.com/organization/casper#section-overview" rel="noopener noreferrer" target="_blank">Casper</a>, Beyond Meat and Rubicon. </p>
<p>"Los Angeles has a creative and innovative spirit like nowhere else, and I'm excited to be investing in the next generation of entrepreneurs and business leaders in my hometown," DiCaprio said in a statement. The A-list actor commands hefty salaries and has long been among the highest paid in the industry. </p>
<p>Struck would not say how he came into contact with DiCaprio's investment team, only that "it's a really small sandbox and we had mutual acquaintances." Struck also declined to specify the size of DiCaprio's investment, but said the fund's minimum is $1 million and the actor wrote a check for "materially more than that."</p>
<p>DiCaprio, who is well known for his environmental activism, was attracted to the firm because of its goal of backing startups with a social mission, such as <a href="https://www.prnewswire.com/news-releases/aquabyte-raises-10-million-series-a-financing-to-continue-leading-the-transformation-of-the-fish-farming-industry-with-machine-learning-300865065.html" rel="noopener noreferrer" target="_blank">Aquabyte, an aquaculture startup employing computer vision and machine learning software</a> to improve fish farming efficiency, according to Struck. The firm also recently led early-stage investments in Brainbase, Scratchpay, Mythical Games, and Sendoso and has also backed Mojo Vision, Postmates, Nutanix, Latch, Grab, and Wunder Mobility.</p>
<p>"We gravitate towards founders who are trying to change the world," Struck said. </p>
<p>As the fourth biggest seed fund in L.A., Struck is currently deploying its second fund, with $55 million in dry powder, and has $150 million in assets under management. </p>
<p>DiCaprio joins a long list of other<a href="https://www.tide.co/celebrity-investors/#bb-investors-s" rel="noopener noreferrer" target="_blank"> celebrity startup investors </a>includes musician Nasir "Nas" Jones (188 companies), actor Ashton Kutcher (158), and NBA Carmelo Anthony (38). Kutcher turned <a href="https://medium.com/@brand_minds/how-did-ashton-kutcher-turn-30-million-into-250-million-131a20100ecb" rel="noopener noreferrer" target="_blank">$30 million into $250 million</a> as an early investor in Skype, Spotify and Airbnb. The late Lakers superstar <a href="https://dot.la/kobe-bryant-remembered-venture-capilalist-2644927215.html" target="_self">Kobe Bryant was also active in VC</a>, partnering with entrepreneur Jeff Stibel to form a fund in 2016. </p>
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Sam Golbach and Colby Brock know firsthand that platforms can disappear overnight.
The two started making sketch videos on the now-defunct social video website Vine back in 2013 when "it was not cool at all" to do that sort of thing, they said. When Vine shut down in late 2016, they migrated to YouTube, and later to Instagram, Snapchat and TikTok.
"Ever since we started, Colby and I have said, 'We need to do this (other app)' or else we'll have to go back to Kansas and not be able to have this lifestyle'," Golbach said.
<p>
For the two self-styled ghost-hunters, both 23, each new platform posed its own challenges, but also opportunities to expand their audience. And a presence on other social sites meant they weren't tied to the fate of any single company – like, say, becoming a pawn in a trade war between two geopolitical superpowers.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzYyNzQyOS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYwODcxNjkxN30.daDtVXcaAwYNCaC5cpX6ltcAVtNjmmRkQ1B0mSrGgQI/image.jpg?width=980" id="17754" class="rm-shortcode" data-rm-shortcode-id="cc394d3bb47e8393909f06f5941d3721" data-rm-shortcode-name="rebelmouse-image" />
<small class="image-media media-caption" placeholder="Add Photo Caption...">Sam Golbach and Colby Brock run. the "Sam and Colby" video series on YouTube, TikTok, Instagram and Snapchat, where they have millions of followers.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Image courtesy of CAA</small></p><p>Their paranoia and hustle paid off. Sam and Colby's paranormal sketches now have 4.43 million subscribers on YouTube, as well as 1.2 million on Instagram and 1.4 million on TikTok. Their support team – which includes a management company (Scale Management), premier talent agency (CAA), and a fashion designer (FanJoy) – has helped them to sign a ghost-hunting book deal and launch a clothing line.<br/></p><p>
The duo's experience reflects the challenges social video stars face in building an audience on the shifting sands of social media, and how online influencer culture is changing and merging with the traditional business of celebrity.
</p><p>
Golbach and Brock are not worried about TikTok's potential shutdown, but plenty of their contemporaries are concerned.
</p><p>
"It's like you build a house and there's a hurricane coming to tear it down. It sucks," said <a href="https://flaunt.com/content/bomanizer-boman-martinez-reid" target="_blank">Boman Martinez-Reid,</a> who made his first TikTok comedy video in December 2019 and has since accumulated 1.3 million followers and representation from <a href="https://www.caa.com" target="_blank">CAA</a>.
</p><p>
Martinez-Reid is a prime example of how virtually anyone with a smartphone today can potentially reach an unlimited audience, and quickly.
</p><p>
"I was a media student with no plan after graduating and here I am: One of the only people I know to graduate with a job," the 22-year-old Torontonian told dot.LA.
</p><p>
That job comes courtesy of the growing industry of influencer marketing, which a Business Insider research report <a href="https://www.businessinsider.com/influencer-marketing-report" rel="noopener noreferrer" target="_blank">expects to exceed $15 billion by 2022</a>, nearly doubling the $8 billion or so from 2019. This growth of brands trying to tap into individuals' online audiences has paralleled the broader shift of advertising dollars onto the internet, which just last year <a href="https://www.washingtonpost.com/technology/2019/02/20/digital-advertising-surpass-print-tv-first-time-report-says/" rel="noopener noreferrer" target="_blank">surpassed the cash they're putting toward TV or print</a>.
</p><p>
Influencers who've made a name on one social platform are increasingly looking to build their brand on others – and to branch out into other media and beyond entertainment entirely.
</p><h2>Owning the Audience, Expanding the Influence</h2><p>
Ed Simpson, chief strategy officer at L.A.-based media group <a href="https://wheel-house.com/" target="_blank">Wheelhouse Entertainment</a>, calls the confluence of tech and celebrity that has enabled the influencer business a "seismic shift" in the entertainment industry.
</p><p>
"What we've never had before is talent that have owned their own audience," he said.
</p>
<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzYwNjM4OC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1Nzg4OTY1NX0.kqsbhbj57nED7QyiYFVQ1rbnDPf8LNptWY39jlxSi58/img.jpg?width=980" id="cc3c2" class="rm-shortcode" data-rm-shortcode-id="ddff5e5e1396c6f6b8dc55c9f4794327" data-rm-shortcode-name="rebelmouse-image" />Boman Martinez-Reid made his first TikTok comedy video in December 2019 and has since accumulated 1.3 million followers and representation from CAA.
Photo by Simon Pella
<p>And that talent, he added, is increasingly facing an important question: 'I've got the audience. Where do I go from here?'</p><p>"Those rising to the top recognize that they have to evolve and change," Simpson said.</p><p>Not every digital influencer wants to turn themselves into something bigger, said Kyle Hjelmeseth, founder of <a href="https://gb-dm.com/" target="_blank">G&B</a>, a digital talent agency. But for those who do, online platforms such as YouTube, Instagram and TikTok have some clear limitations.</p><p>First is the grueling demand of producing regular online video content. Golbach and Brock said that because anyone can post online videos and reach an audience, competition is fierce. That increases the pressure to make fresh material to stand out. <a href="https://www.tubefilter.com/2019/05/31/burnout-influencers-social-media-solutions-treatment-who/" target="_blank">It can be hard work</a>, and the reward isn't necessarily satisfying.</p><p>"When you do traditional media, it's more long-term," said Golbach. "For a TikTok or Instagram post, people will forget about that in 24 hours."<br></p><p>That may be because their audiences skew much younger, a possible shortcoming of digital platforms in general, if your aim is to build a legacy.</p>
<p>
"We have such a youth-heavy audience," said Thomas Petrou, co-founder of Hype House, a collective of TikTok stars <a href="https://www.nytimes.com/2020/01/03/style/hype-house-los-angeles-tik-tok.html" target="_blank">profiled by the New York Times earlier this year</a>, shortly after settling in the Hollywood Hills.
</p><p>
"The biggest thing would be having an audience that's not just Gen Z, but having everybody know who you are," said Petrou, whose 7.2 million TikTok followers fall short of fellow Hype House member Charli D'Amelio. The Times called her the "reigning queen of TikTok" with her 83.8 million followers. Alongside other members including Chase Hudson (24 million followers) and Kouvr Annon (11.5 million), Hype House's total following exceeds 150 million users.
</p><p>
That big audience is one large reason Wheelhouse, founded in 2018 by "Pawn Stars" creator Brent Montgomery, recently <a href="https://deadline.com/2020/08/wheelhouse-hype-house-docuseries-tiktok-1203002045/" rel="noopener noreferrer" target="_blank">signed a deal with Hype House</a> to produce a behind-the-scenes reality TV show. It will unfold in much longer installments than the 15 or 60 second clips on TikTok.
</p><p>
To the Hype House members, the Wheelhouse deal provides legitimacy, another perceived limitation of many social video platforms.
</p><p>
"The reason we want to go in that direction is because it solidifies us as more mainstream celebrities," said Petrou, who considers himself the entrepreneurial brains behind his camera-ready crew's operation. "I think you will see us collaborate with Wheelhouse across television and streaming and the audio world on many different types of projects."</p><p>
Martinez-Reid, who noted he'd like a show deal, said traditional media is more "official" and "real" because it can reach "people my parents' age."
</p><p>
"If someone had uploaded Tiger King to YouTube it wouldn't have been the sensation it was," he added.
</p><p>
"You wouldn't ever get put on IMDb (the Internet Movie Database) for being a TikTok star," said Brock. "Social media doesn't have the respect of traditional media."
</p><p class="shortcode-media shortcode-media-rebelmouse-proxy-image">
<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vbWVkaWEucmJsLm1zL2ltYWdlP3U9JTJGd3AtY29udGVudCUyRnRoZW1lcyUyRndoZWVsaG91c2UlMkZpbWclMkZvZy1kZWZhdWx0LWRhcmsucG5nJmhvPWh0dHBzJTNBJTJGJTJGd2hlZWwtaG91c2UuY29tJnM9NjEmaD0yZmRmYzU5NmVjNThhMDczODYyYTUwOWQ3ZTU5YTk4MGZkMDFmYWIxMTRjMDcyODVjODNlODNkOTlhYTdiMDAzJnNpemU9OTgweCZjPTI1MzcyOTE1NzQiLCJleHBpcmVzX2F0IjoxNjEzNzY0NzAwfQ.YalEFA0PUy0M5eWkyhUF66TLhpGqdXYheaAlROW7Ri0/img.jpg" id="b2e81" class="rm-shortcode" data-rm-shortcode-id="65d1d35de485fde5f14ed32bfbaf4c6e" />
</p><h2>The New Celebrity Machine?
</h2><p>
Andrew Graham, a digital talent agent at CAA, said his clients "have several unscripted (TV shows) in the fire," and that book deals like Sam and Colby's confer a "gravitas" that can be used as a "Trojan Horse" to bigger deals in linear media like streaming, film <a href="https://www.latimes.com/entertainment-arts/business/story/2020-08-27/spotify-podcast-deals-influencers" rel="noopener noreferrer" target="_blank">and podcasts</a>.
</p><p>
Social video creators have made money by pointing fans to sponsors. An increasingly common next step has been to point fans to businesses of their own. Some have <a href="https://www.nytimes.com/2019/12/05/style/makeup-palettes-influencer-eye-shadow.html" rel="noopener noreferrer" target="_blank">formed beauty companies</a>. Petrou is working on a jewelry line. Hjelmeseth said several of his clients have launched their own apps.
</p><p>
This blurring of content creation, sponsorship marketing and business development is the entire basis of Wheelhouse's business model.
</p><p>
"We're a reflection of what's happening in the marketplace today. And we're building a business that's set up to address the needs of where technology and business are going," Simpson said. "We're set up to take digital talent, create content around them, connect them with brands, and create businesses around them."
</p><p>
He believes the trends inspiring this approach will ultimately shift the ways the broader entertainment industry does business.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzYwODk0My9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYwNzQ5ODYwNH0.q_LBxTxio9kOeHDRKO9qeRWOrU7WeJOpzg6_7G15xsE/image.jpg?width=980" id="aade7" class="rm-shortcode" data-rm-shortcode-id="731867fe7fd27e5a7bbb10c445883e35" data-rm-shortcode-name="rebelmouse-image" />
<small class="image-media media-caption" placeholder="Add Photo Caption...">Thomas Petrou is co-founder of Hype House, a collective of TikTok stars living and working in the Hollywood Hills.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Image courtesy of Baby Grande PR</small></p><p>"That's what we believe is what the studio of the future will and must look like," Simpson said.<br/></p><p>
One sign that his vision is sound: Just as social media stars are looking to traditional media for legitimacy, traditional media stakeholders – celebrities as well as their support teams and studios – are increasingly turning to social media to build their own audiences.
</p><p>
"These trends were playing out already pre-pandemic, but this has accelerated that evolution," said Graham. "There is increasing interest from non-digitally endemic clients who want to own their own distribution."
</p><p>
Hjelmeseth said he sees more focus on social media from traditional media as well.
</p><p>
"We've seen/heard that many major studios require that an actor have a social presence before putting them in leading roles," he wrote to dot.LA. "I imagine studios now are baking in that they have to have some control over the social media of the talent and benefit from the profits of their talent's social, if (they're) doing sponsored campaigns."
</p><p>
What it all amounts to is that the merging of technology and celebrity is blurring the lines between traditional and new media.
</p><p>
"I see what I do crossing over to a more traditional landscape," said Martinez-Reid. "But it's an interesting question, because how do you even look at traditional media now? Even traditional media keeps changing."</p><p>---</p><p><em>Sam Blake mainly writes about tech + media and entertainment for dot.LA. Find him on Twitter @hisamblake and email him at samblake@dot.LA</em><br/></p>From Your Site Articles
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Wu-Tang Clan rapper Method Man recently launched a cannabis brand, "Taking Into Consideration All Lives," that will highlight racial injustice..
Former Disney star Bella Thorne has a brand called Forbidden Flowers that she will use to talk about the flower's healing powers, the original puffer Snoop Dogg has partnerships with Canopy Growth and billionaire rap mogul Jay-Z became the chief strategist for Caliva last year giving the brand an edge.
Celebrities are cashing in big on California's green rush and putting their own signature on it.
Shavo Odadjian, bassist for L.A. metal giants System of a Down is trimmed from the same mold. His 2018 startup, 22Red, celebrates creative minds and has a music production wing. He sees 22Red not just as a purveyor of cannabis, but of music, art and fashion. And it's just getting started.
<p>"It's not just about getting high," Odadjian tells dot.LA at 22Red's minimalist headquarters, where glass garage windows and French doors separate conference rooms, offices and studios — far removed from its prior calling as a place of worship in downtown Pasadena.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzU5MDYzMS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzMDk5NTg0MH0.WdrM7EjQGGw_v4udstT1zMMVfyEfNhLZlH2LIr4r2fs/image.jpg?width=980" id="6ae9a" class="rm-shortcode" data-rm-shortcode-id="c83ed84bd213fb2e574f56d46d09dd3f" data-rm-shortcode-name="rebelmouse-image" />
<small class="image-media media-caption" placeholder="Add Photo Caption...">Shavo Odadjian, bassist for L.A. metal band System of a Down's cannabis startup, 22Red, celebrates creative minds and has a music production wing.</small></p><p>The company is working with HEX, a boutique accessories designer with a flagship store in downtown Los Angeles, to launch backpacks, bags and other products.<br/></p><p>Each run is limited and marketed as exclusive with high quality stitching and material. "We're going to do custom stuff," Odadjian says. "I don't like too much branding." </p><p>Another collaboration is in the works with renowned L.A. tattoo artist Chuey Quintanar, whose realistic inks have been featured in museum exhibits. Quinatar, a master of the black and gray style that has roots in Chicano culture, is now vaunted by celebrities and high-end tattoo shops. </p><p>"What I believed in was creating a whole lifestyle brand that is beyond cannabis," says 22Red chief executive Harry Kazazian, who joined the company about a year ago. "It's bigger than Shavo. It's more about the arts, socializing and enjoying life." </p><p>Kazazian, a fellow Armenian who played in heavy metal bands, has known Odadjian for more than 25 years, travelling in many of the same circles. He was an early seed investor who helped the brand raise more than $1 million from friends and family. </p><p>"I've always looked up to Harry. He's an amazing person and a kind soul," Odadjian says of Kazazian. </p><p>"I needed someone that I could trust."</p><p>Kazazian brings not only a track record in outdoor sports and consumer goods to the operation, but deep knowledge of distribution and supply chains that can be leveraged. One of the company's brands, Hex, is producing 22Red gear. Kazazian co-founded Colorado-based Exxel Outdoors more than 20 years ago and remains the CEO as the company has grown. He wants to create a similar path for 22Red. </p><p>"My goal has been more about building a solid business foundation," Kazazian says of his new role. "My management style is more about longevity." </p><p>The brand is personal to Odadjian. He wants to build 22Red up in the very neighborhoods where he grew up and where System of a Down grew its audience in the '80s.</p><p>22Red launched in November at cannabis retailers, including Dr. Greenthumb's in Sylmar and City Compassionate Caregivers downtown. A small run of hoodies and t-shirts were produced at business partner Mike Basteguin's factory in Hollywood. </p><p>Odadjian attended the Rose and Alex Pilibos Armenian School in East Hollywood, along with System band mates Serj Tankian (lead vocals, keyboards) and Daron Malakian (vocals, guitar), though at different times. </p><p>"It was the hood. That's where I saw poverty, that's where I saw hookers, that's where I saw gangs, that's where I saw drugs," says Odadjian in a cadence as frenetic as his bass guitar. "I would go to sleep with the sound of helicopters, ambulances and police."</p><p>Drummer John Dolmayan's family was also part of that mass migration in the 1970s and 1980s to Armenian enclaves in Los Angeles, particularly Hollywood, the San Fernando Valley and Glendale, where the band ultimately formed.</p><p>"I could have gotten into anything. I could have been a gangbanger. I could have gotten into drugs. I could have died," Odadjian says. "I chose skateboarding and guitar."</p><p>When creating the brand, he drew inspiration from his life. Born on April 22 and married on May 22, he was 22 when System signed with American Recordings. His first two sons were also born two years, and 22 days apart. </p><p>The number resonated deeply with him. Twenty-two led to the color red.</p><p>Odadjian has synesthesia, a neurological condition that causes him to see colors with numbers, letters and even music. </p><p>"It's an association thing, and I associate things with color," Odadjian says, which causes the brain to process data through several senses at once.</p><p>22Red fit together in his mind.</p>
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