Why venture capitalists should stop hero-worshipping celebrities

Venture capitalists get all star struck when the celebrities turn up. But, while backing superstars may be attractive, it will not be good for profits, says Matthew Lynn.

Adam Neumann
Adam Neumann: great ideas, poor execution
(Image credit: © Angus Mordant/Bloomberg via Getty Images)

Some high-profile founders have found it remarkably easy to raise fresh capital in recent weeks. Adam Neumann, the founder of the temporary office company WeWork, has just raised $350m for Flow, a start-up aiming to transform the residential apartment market, with a total valuation for the new business of more than $1bn. Travis Kalanick, the key founder of the minicab empire Uber, received $850m in funding for his new venture, CloudKitchens, with Microsoft reportedly among its backers, putting a total valuation of more than $15bn on the new businesses.

Reality TV star Kim Kardashian is getting in on the act, teaming up with investment giant Carlyle to start a media private-equity firm. Tennis star Serena Williams has also raised an extra $111m to expand her firm Serena Ventures. It is seems clear that the venture-capital (VC) industry, once a quiet corner of the financial markets occupied mostly by serious bankers and accountants, has all of a sudden developed a cult of star-struck hero worship.

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.