How to convert fame into money

I used to believe that money, fame, and power were fungible, each readily interchangeable and swappable.

For example, if you have money; wear designer and flex cars and planes to look cool, and then contribute to politicians to puppeteer policy. If you have fame, parlay into business deals and then run for office to directly control the levers of power. If you have power, position your investments to benefit from your policy and then announce it to mass media who will do the bidding to make your name and face ubiquitous.

Through founding Anti Fund with Jake Paul and partnering with the richest, most famous, and most powerful people in the world, I've collected practical experience on the nuances of money, fame, and power as distinct assets and the non-trivial parlay and conversion among the three.

Let’s start with defining the three:

1. Fame is name and face recognition. The more familiar you are with someone’s name, face, and personality, the more likely you will give the famous person special treatment.
2. Money is the unit in which you can pay others to do arbitrary tasks for you.
3. Power is the mandate to deploy violence to put others in jail, seize their property, and/or kill them.

The seminal learning moment for me was watching the 2016 US Presidential election. I watched Donald Trump, a real estate builder and reality TV show star who was a borderline billionaire at the time, troll the f out of GOP machinery with very little funding, while deca-billionaire Michael Bloomberg paid ~$1B for the honor to get slapped around on the Democratic primary debate stage. I learned that while you can’t buy fame, you can buy public humiliation.

For Gen Z and younger (approximately 28 and below), the #1 dream job is to be an influencer/creator aka being paid to be famous. Jake Paul and his cohort instantiated the industry. Anti Fund invests at the intersection of technology and culture, so fame is something we think about not only as practitioners, but also reason as an academicians.

The short-term, intra-generational famous people cater to the masses of their time. They are athletes or artists, and they directly trade their time for money via recording a song or playing ball on behalf of the owners of a NBA or Champions League soccer team.

The long-term, inter-generational famous people found dynastic nation-states (George Washington, Napoleon, Augustus, etc.), change how humans think (Jesus, Buddha, Newton, Einstein, etc.), or killed / saved a lot of people (the major WW2 leaders, Genghis Khan, etc.).

The heuristic threshold is simple: will the name be remembered in 1000 years?

It is notable that rich people don’t make the list for durable fame. No one cares who the top 10 richest people were 30 years ago, let alone 1000 years ago.

The levers to convert fame into money are more powerful than ever now that everyone is addicted to social media and we’re establishing global mono-culture run by social algos.

Let’s start at the basics: celebrities start by monetizing their direct labor, which is usually an art or sport. But very quickly, they max out the amount of songs they can write or ball games they can play. So to expand, they expand their credibility across other markets. A big corporation with faceless shareholders retain a shell facade of brand reputation. Without the original founders, it is a stagnant identity and shareholders must spend a lot of money to keep buying relevancy. Renting celebrities is one of the main tactics. Fame is fleeting and fades within 5 years, so this is mutually a short-term trade and flip between endorser and endorsee. With increased competition of more and more kids wanting to be famous, you’ll see the average celebrity lifespan continue to attrite and/or celebrities niching down.

So what do the smart celebrities do? They realize that the truly wealthy people are the owners. So instead of trading fame for money, they trade fame for equity. This is a longer-duration hold and more risky, but the logic is as follows: if someone is willing to pay $X cash for your endorsement, the company expects to make $X+Y money in the long-run because they’re only doing it if it’s profitable. So then the natural follow-up question is: why endorse the CPG or the app, when you can own the CPG or the app company?

This strategy has accelerated within the last few years and industry darlings like Kim’s Skims, Logan and KSI’s PRIME, Mr Beast’s Feastables, and Nelk Boy’s Happy Dad, and Hailey Bieber’s Rhode are all notable examples. Jake and I realized this early in 2021 thinking through Anti Fund strategy and started executing on an incubation approach with Betr and W, both now emerging leaders within their respective sports gaming and men’s personal care industries.

But for every single success, there are 9 dead celeb brands. Fame is like business steroids. It amplifies the both the good and bad of business, but is by itself insufficient. In fact, steroids are often detrimental to the rigor of running a lean, efficient, adaptive business. Steroids when done right enhance performance; steroids when done wrong can kill you.

So how should a famous person further scale if owning 1 or 2 businesses is not enough? Brand dilution or “selling out” happens when a famous person becomes the face of too many things. When this happens, the full house of cards falls down because the foundations of fame are fickle. The quicker the masses love you, it is symmetrically easy for them to abandon you.

But what if you own equity in many things? The richest people in the world own businesses where it doesn't matter if you love or hate them, they structurally will always make money.

Private equity and investment companies have these attributes exactly. Love or hate them, private equity and hedge fund titans make their money and own many things that we all use every single day. And these companies also have the quality that while ownership and decision-making can stay concentrated, the AUM can scale exponentially. It’s about the same amount of work to manage $30M, 300M, or $300B. In fact, it’s much easier to manage $300B than to manage $30K.

Blackstone, Carlyle, KKR are investment companies that scaled so large that they went public. These companies manage dozens of individual P&L subsidiary funds all feeding cash flow to the owners. Other top investment companies like General Atlantic and VC firms like a16z and General Catalyst are all harboring public company aspirations. These are all companies that have nicely scaled to tens of billions of assets, while ownership and economics are highly concentrated with the Managing Partners.

Anti Fund is the first investment firm to explicitly harness fame as investment alpha in a social media dominated information economy. There are other celeb funds, but they don't seem thoughtful of how to wield fame and in fact seem almost embarrassed by it. It's almost like that they are insecure about their intellect and investment process, so they have to pretend to be something they are not.

Fame is less useful for public equities because there is titularly no information or access asymmetry. While this is not true in practice (just ask Nancy Pelosi and other senior politicians how they run so hot), clicking buy on Robinhood doesn’t exploit fame that well (or it simply reverts to an endorsement model i.e. pay a famous person to shill).

But the nature of early-stage venture capital has two unique attributes:

1. power-law, the top 1% of assets make all the money i.e. 100-1000x your money, and these assets are over-subscribed for capital
2. information and access asymmetry is legal and literally the only differentiation between VCs.

Given this business dynamic, fame is outsized powerful in the venture capital business. The top 1% of companies are the only ones that matter, and for them capital is commodity. Thus, getting the attention and the subsequent buy-in of the top 1% founder is the only hard part of the VC business, as the value-add and operational know-how for recruiting help and customer intros is commoditized. And now with ASI execution around the corner, the idea guy and the clout guy are more powerful than ever.

Is it really that simple? Anti Fund is your proof of existence.

And the smartest and most successful investors in the world today agree with me. This is why Coatue’s Phillippe Laffont is on the podcast circuit, a16z and 20VC are running bona fide media companies, and All-In Podcast run by Silicon Valley venture capitalists is a perennial top 10 global podcast. Even the less publicly media-forward brands like Sequoia, Benchmark, and Thrive run expensive and exclusive wine-and-dine private dinners, shows, and conferences you don’t hear about. Every VC brand is simply buying different flavors of clout to obtain inside access and information flow.

The future of venture capital is being written now, so the only interesting question is: can Anti Fund compete with Sand Hill and Wall Street with our native understanding of clout, or will they be able to out-execute us?

Venture and private equity is a decades long game, so the answer won’t be immediately obvious. But you can watch us work by following our personal and Anti Fund’s channels (@antifund).

If you’re a top 1% founder, you know where to find me. We’re here to write you a big check. If you’re a celebrity or work with one, and this essay is helpful for your business strategy, you can reach out to collaborate or thank me by sharing your best deals with us.

Thank you to Jake Paul for thought partnership on this topic.