Celebrity funds from Jay Z, Will Smith and Robert Downey Jr. are backing a life insurance startup

Published June 14, 2018

Ethos, the company that bills itself as making life insurance accessible, affordable and simple, has officially come out of stealth with an $11.5 million investment led by one of the world’s top venture firms, Sequoia Capital, and additional participation from the family offices of Hollywood’s biggest stars and an NBA all-star.

Jay Z’s Roc Nation, and the family funds of Kevin Durant, Robert Downey Jr. and Will Smith, all participated in the new round for Ethos, and Sequoia Partner Roelof Botha is taking a seat on the company’s board. Because nothing says star power like a life insurance startup.

The life insurance market is one that’s been attracting interest from venture investors for a little over a year now. Companies like England’s Anorak, HealthIQ, Ladder, Mira Financial, and France’s Alan, which is backed by Partech Investments (among others), Fabric and Quilt, are all pitching life insurance products as well.

Ethos is licensed in 49 states, which is pretty comparable to the offering from providers like Haven Life, the Mass Mutual-backed life insurance product.

What has made the life insurance market interesting for investors is the fact that consumers’ interest in it continues to decline. Whether it’s because no one trusts insurers to actually pay out, or because Americans are putting their faith in the anti-aging technologies from funds like the Longevity Fund, folks just aren’t buying insurance products the way they used to.

So when investors see the numbers of users of a formerly ubiquitous product decline from 77 percent in 1989 to below 60 percent in 2018, the assumption is that there’s room for new companies to come in and provide better service.

Scads of investors have taken the same bet, which makes Ethos a marketing play as much as anything else. In the company’s press release it touts the fast, easy and inexpensive process for getting a quote.

The initial process requires only four questions to get a quote and a 10 minute survey to get a policy (in most cases). The company says 99 percent of its applicants don’t need a medical exam or blood test to get a policy.

What may have been most interesting to investors is the pedigree of the company’s co-founders. Peter Colis and Lingke Wang have both worked in the insurance industry before. They previously co-founded a life insurance marketplace called, Ovid Life.

“Life insurance is critical for families, but the process is broken for those who want and need it,” said Peter Colis. “We are consumer advocates, intensely focused on expanding life insurance accessibility to the millions of U.S. families who have college debt, mortgages, spouses and children to care for, and who want to be financially empowered to live their lives without worry.”

Ethos founders Lingke Wang and Peter Colis

Hip hop finds its beat in the startup scene

Published March 24, 2018

Hip hop stars are taking their reputations to Wall Street and Sand Hill road.

Unlike their rock star brethren, who’ve historically been disinterested in dabbling with startups, quite a few hip hop artists have amassed good-sized portfolios. They’ve seen a few big hits too, most recently including a massive up round for zero-commission stock trading platform Robinhood, which counted Jay-Z, Nas and Snoop Dogg among its earlier backers.

But just how deep does the hip hop-startup relationship go and where is it headed? To shed some light on that question, we put together a review of Crunchbase data on the startup investment activity of famous musicians. We looked at both hip hop and pop stars, culling a list of 21 artists who are either active investors or have joined one or more rounds in recent years.

The general conclusion: Artists are doing more deals, raising more funds and backing more companies that graduate to up rounds and exits. Here are a few examples:

Besides getting a slice of Robinhood, Jay-Z and his entertainment company, Roc Nation, also saw an early portfolio company, flight club startup JetSmarter, go on to raise financing a year ago at a reported valuation more than $1.5 billion. Roc Nation also made headlines this week for investing in Promise, a startup providing alternatives to incarceration for people who can’t afford bail.
QueensBridge Venture Partners, the investment fund co-founded by Nas, was an early-stage investor in video doorbell maker Ring, which Amazon just bought for $1.1 billion. The firm could also see some paper gains this week in the much-anticipated market debut of Dropbox, which it backed in a 2014 Series C round. In addition, QueensBridge participated in a $25 million Series B round for cryptocurrency trading platform Coinbase back in 2013. Coinbase’s last reported valuation was around $1.6 billion.
Casa Verde Capital, a cannabis-focused venture fund co-founded by Snoop Dogg, has closed its debut fund with $45 million. Just this week it backed a $3.5 million round for vape manufacturer Green Tank.

That’s not to say everything a star touches turns multi-platinum. We found quite a few flops in their portfolios and assembled a list here of 10 startups now shuttered that counted a hip hop or pop star among their backers.

Becoming and remaining famous requires many of the same skills and qualities as running an entrepreneurial venture, including an exceptional degree of tenacity.

Of course, flops are part of life for early-stage investors, so there’s no reason we’d expect celebrities to be an exception. Moreover, most of the now-shuttered companies were not heavily capitalized by venture standards.

However, there are some higher-profile or more heavily funded companies on the flop list. One is Washio, a laundry delivery service, which raised $17 million from Nas and 20 other investors before hanging itself out to dry in 2016. Another is Viddy, an app for shooting and sharing video clips backed by Roc Nation.

Why the rich, hip and famous like startups

A number of venture pundits and pop culture mavens have previously pontificated why celebrities, and hip hop stars in particular, are drawn to startups.

One possibility is that rap music and startups resemble each other at the earliest stages, postulates Cam Houser, CEO of the 3 Day Startup Program. Rap music starts with a rapper and a producer. This duality, he says, is similar to the beginning stages of a startup, which commonly also brings together two people, a business and a technical co-founder.

Rap and startup entrepreneurship are also both longshot career tracks that celebrate raw ambition and unabashed self-promotion. To make it, however, both require an excellent grasp of what sells in the real world.

Branding is perhaps the most common rationale provided for the celebrity-startup connection. With their massive fan bases, swooning coverage and millions of social media followers, celebrities can certainly help get the word out about a new product or app. That said, the attention usually works only if said product also has compelling attributes of its own.

One of the less controversial explanations is that becoming and remaining famous requires many of the same skills and qualities as running an entrepreneurial venture, including an exceptional degree of tenacity.

It’s also true that in venture capital and the music business, it’s the hits that matter. It helps that we’re seeing plenty of those.