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  • How to Start a Celebrity-Backed Brand – Hollywood Reporter

 November 3

by Carolina

When it comes to celebrity brand-building, there are a lot of steps and behind-the-scenes players that take the passions of famous faces from the idea stage to store shelves. From agents and CEOs to investors and incubators, here’s how Hollywood entrepreneurs launch their business ventures — in the hopes of a major exit or creating a company with a billion-dollar valuation (like Jessica Alba’s Honest Company, which went public earlier this year) — and who to know to get there.

Agents  

Agencies are often the first stop for Hollywood brand builders. At UTA Ventures — which helped launch Issa Rae’s Sienna Naturals hair care line, Seth Rogen’s Houseplant cannabis company, Priyanka Chopra Jonas’ Anomaly hair products and Elizabeth Banks’ Archer Roose canned wine venture — exec Sam Wick leads the department, having built, advised and invested in more than 40 businesses so far, with a combined valuation in the billions. With data and analytics department UTA IQ, says Wick, “we help creators go through a process before they launch a brand to help their audience understand their authentic connection. This way, when the product is released, their audience already understands that they are deeply and organically passionate about the product or brand.”

CAA’s global client strategy group offers a similar service for its clients; department head Toby Borg says brand building exploded since the pandemic, when “people were at home with time to explore their passions.” He adds, “We build a global strategy through a whole range of insights around the client and around different categories. We explore their passion points and then come back with a business strategy. We’re here to build businesses for our clients that they can own.”

At ICM, clients rely on Carol Goll, the agency’s global head of branded entertainment, to help guide them in the world of consumer products. Says Goll: “The major reason a celebrity brand doesn’t succeed is because the public doesn’t see the connection — when they are not inspired to purchase due to a weak credibility factor or lack of interest from the talent to get behind it in a meaningful way. People need to understand and buy into the association.”

The branded partnerships group at WME includes partner Brooke Slavik Jung, who cautions that would-be celebrity entrepreneurs need to put in the hard work and sweat the details when launching a brand. “You have one shot to get it right. You have to make sure every element is perfection. Let’s say it doesn’t work. You are not going to be going out in another two years and doing another, say, shampoo company,” she says, adding that, “There are probably a lot more [celebrity brands] that fail than make those hundreds of millions of dollars. You have to find the right founders and right partnerships to make that happen.” Additionally, in 2019, Endeavor and WME formalized their Talent Ventures team, comprised of executives from investment banking, private equity, and venture capital. “It’s not just about business building in spirits and beauty anymore — the frontier continues to expand into new areas, really anywhere market opportunity and client’s passion areas intersect. And formats can range from ‘incubation’ to deep equity partnerships with start-ups,” says Sherif Hamid, co-head of Endeavor Talent Ventures.

CEOs

Though celebrities may be very hands-on in their businesses, most opt to have a business-minded CEO to lead their brands, bringing entrepreneurial expertise and reliable leadership while they’re on set.

Fashion exec Jens Grede fills that role for Kim Kardashian’s Skims and Tom Brady’s new apparel brand, Brady; Dany Garcia serves as CEO for The Garcia Companies, a portfolio including Dwayne Johnson’s Teremana Tequila and ZOA energy drinks; and Alba’s Honest Company partners include Brian Lee, the co-founder of Legalzoom and ShoeDazzle.

Vincent Hanna is CEO for Ian Somerhalder and Paul Wesley’s Brother’s Bond bourbon, and after having worked in wine and spirits for 20 years, “I knew where there was product, I knew how to get it, who would be able to do it for us,” he says, providing a valuable industry introduction to the Vampire Diaries stars, who co-own the business (which, after launching earlier this year, shipped 50,000 cases of bourbon in its first four months).

Investors  

To take brands from concept to reality, many companies turn to venture partners like Cavu — cofounded by Shark Tank’s Rohan Aza, with investments in Jennifer Garner’s Once Upon a Farm baby food and wellness brands Hims and Hers, in which Jennifer Lopez and Alex Rodriguez are also investors.

In the spirits space, Ken Austin is a serial entrepreneur who has invested in and/or helped launch brands such as Proper No. 12 Irish Whiskey with UFC champion Conor McGregor and Johnson’s Teremana Tequila. Allen Shapiro (former CEO of Dick Clark Productions) and John Howards launched Celebrands in 2020 after investments in Skims, Khloe Kardashian’s Good American and Ryan Reynolds’ Aviation American Gin, while The Najafi Companies has invested in Scarlett Johansson’s upcoming skin care company, incubator Beach House Group and is partners on Colin Kaepernick’s SPAC Mission Advancement Corp. “By utilizing our own capital, we are able to be extremely selective, think long-term, move quickly and operate in true alignment with management,” says Najafi Companies partner Dean Schnider. “Artists and talent who are passionate and engaged are the perfect partners to tell an impactful story that enhances consumer connection.”

As most celebrity brands are private companies, it can often be unclear how much of a stake stars have in their own brands. But sources say that with talent wanting to be actively involved in their companies rather than just faces of brands, equity deals are becoming more common for long-term value creation, as opposed to low-engagement licensing agreements.

Explains PLUS Capital founder Adam Lilling, whose portfolio includes Ellen DeGeneres’ ED and Sara and Erin Foster’s Favorite Daughter, “There’s a big difference between a celebrity who decides to partner with a person to start something [versus] partnering with an infrastructure, whether that be a vertical-specific incubator or a large retailer or platform. You can’t give up 50 percent to a co-founder, then get diluted by investors and additional team members. Over time, you won’t own enough to care anymore.”

Incubators  

Brand incubators help take small startup brands — even those with a famous face — to the next level, providing young companies with resources, capital and strategy. “Our clients bring the marketing, bring the IP, bring their voice, and bring their audience,” says CAA’s Borg, “and the incubator provides a great team and financing to bring it to market.”

Beauty incubator Maesa has helped grow Drew Barrymore’s Flower by Drew, Taraji P. Henson’s TPH, Chopra Jonas’ Anomaly and Jada Pinkett Smith’s Hey Humans, while Beach House Group counts Millie Bobby Brown’s Florence by Mills, Tracee Ellis Ross’ Pattern, Shay Mitchell’s Beis and Kendall Jenner’s Moon among its brands. A-Frame, Kendo Brands (a division of LVMH), Syllable Studio and Seed Beauty are also players in the incubator space.

Connectors and Managers 

Longtime behind-the-scenes player Ryan Schinman — co-founder of Mayflower Entertainment, which represents brands, and Mayflower Ventures, which invests in and builds brands — has secured talent for more than 100 Super Bowl ads and for more than 3,500 commercials over the years. “Brands come to me on what they should be doing in the worlds of sports, music and Hollywood, and even though we don’t represent talent, talent comes to me to recommend how to start brands, how to work with existing brands and how to get equity in brands.” His advice to celebrities interested in launching brands is to “be patient, put in the time and effort and the work and find the right partners. Slapping your name on something is fine if you want to do an endorsement. It’s not OK if you want to build a brand.”

On the management side, Jean Kwolek is principal at Artist & Brand Management, where the roster of clients includes the Foster sisters, Nicole Richie (founder of House of Harlow 1960), Tyra Banks (ModelLand) and Garcelle Beauvais (who is launching a home collection next year). Her preferred approach for launching a new brand? “We find it’s powerful to launch a brand with a retail partner who will sell the brand with a level of exclusivity at launch,” she says. “It allows for a streamlined consumer message and more meaningful marketing support.”

Original posted at www.hollywoodreporter.com

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