When a Male Celebrity Decides to Become a VC | Is Silicon Valley Burning?

By Lixin He

Edited by Jing Liu

On the first Sunday of November 2022, the weather was unusually hot and humid, and the Verrazzano-Narrows Bridge in New York was packed with people. The New York City Marathon was underway — the warmest in its history — with as many as 50,000 runners competing. Among them was a man dressed in black, a white baseball cap on his head.

He had just emerged from an illness. Ashton Kutcher, once a wildly popular actor and model, had spent the previous three years battling a "strange, extremely rare form of vasculitis" that had temporarily impaired his vision, hearing, and balance.

For Kutcher, the marathon was a declaration of his full return. At 44, he was not only an actor, model, charity founder, and father of two, but also an investor with more than a decade of experience, running Sound Ventures, a venture capital firm with hundreds of millions of dollars under management.

Three or four years earlier, Kutcher's identity as an investor had already begun to draw attention. The narrative then was about someone who had backed big-name tech companies like Uber, Airbnb, Spotify, and Skype. Shortly after the marathon, the ChatGPT wave swept the globe, and people were astonished to discover that he had also, with remarkable precision, invested in what are now the world's three leading AI companies: OpenAI, Stability AI, and Anthropic.

In May this year, Sound Ventures announced the close of a $243 million AI fund, focused on foundational large models. In the U.S. VC world, this scale is hardly staggering, but for a lean team of about ten people, it hits the sweet spot. At the same time, the firm's third fund, also $200 million, runs in parallel, continuing to focus on Series A to B SaaS companies — the application layer above the models.

Venture capital is now 70 years old, and most successful practitioners have come from finance or industry. Michael Moritz's background as a journalist, for instance, is in some ways integral to the legend of the Hongshan partner. But few have crossed over from entertainment to venture capital and truly professionalized the move — even though the two industries are, in many ways, remarkably similar.

In China, the celebrity investors who once sprang up like wind have mostly faded from the investment world. Star VC, founded by Quan Ren, Bingbing Li, and Xiaoming Huang, has logged only single-digit investment events in the past three years. Qinghan Fund, which Lu Han helped establish, has barely made any moves lately (though their WeChat account seems to keep updating). Last year, when "An Yong Waves" extended an interview invitation to a once highly active celebrity investor, the response was a polite decline: no investment talk, the main focus now is on a new media e-commerce startup.

"Is Silicon Valley Burning?" is a new column from An Yong. Here we present the people and stories most worth knowing in Silicon Valley, and what their emergence might mean for the rest of us. Our first story is about Ashton Kutcher.

From Small-Town Kid to Silicon Valley Legend

Kutcher hails from a farm town in Iowa, born into a conservative Catholic middle-class family with an older sister and a fraternal twin brother with congenital health issues.

His complicated upbringing left him with a "small-town kid" quality — grounded in the real world, wired for adventure, and he has never shied away from his roots.

By his own account, at age 13 he contemplated suicide so his heart could be transplanted to save his brother's life. Growing up, Kutcher had almost no exposure to business. He worked his way through school as a janitor, butcher, and food plant worker, served time in prison for burglary, and sold plasma to get by. He majored in biochemical engineering in college until a talent scout discovered him in a bar. He dropped out, entered show business, and moved to Los Angeles.

In his breakout role on That '70s Show (1998), Kutcher played a lovable dimwit, and he went on to a string of similar parts.

Kutcher is an ambitious person. This was evident even when he was just an actor: he knew that most acting careers, however brilliant, tend to be short, so he decided to become a producer. In fact, starting with The Butterfly Effect, he only starred in films he produced.

The actor early remembered on screen for being "all muscle, no brain" soon began dabbling in business in real life: in 2003, he founded production company Katalyst, which brought him onto the VC radar. The pivotal figure was Sarah Ross, then the company's head of technology, who had previously worked at tech media outlet TechCrunch. Through her, Kutcher met a circle of venture capital figures including renowned Silicon Valley investor Ron Conway and TechCrunch founder Michael Arrington, breaking into the Silicon Valley inner circle.

At the time, Kutcher was in his prime at 25. Silicon Valley's preference for youth applies not just to founders — Kutcher was himself a bona fide "blue flame," the term used in U.S. VC circles to describe the ideal founder in investors' eyes: early twenties, unmarried, no need for personal life, burning entirely for the startup.

Kutcher also paid tuition for his investing career. Personal investments in phone service Ooma and social site Blah Girls, among others, later shut down. A decade ago, the fledgling investor was unsparingly labeled by The New York Times as a "handsome doofus" fluent in Silicon Valley utopian-speak.

The breakthrough came in 2009. After Kutcher bought into social network Foursquare, Netscape co-founder and future A16Z leader Marc Andreessen invited him to put $1 million into Skype. Just 18 months later, the video communications service was acquired by Microsoft for $8.5 billion, and Kutcher made a 4x return.

With the rise of mobile internet, the professionalization of Silicon Valley venture capital, and his own accumulating experience, Kutcher gradually recognized the need to build a team.

In 2010, he teamed with Madonna's manager Guy Oseary and billionaire Ron Burkle, who had worked with Clinton, to put $30 million of their own money into investment firm A-Grade Investments — combining core network access with investment professionalism, formally stepping into institutional investing.

Moving from investing your own money to managing other people's money is a giant leap in professionalization as an investor, and most celebrities who dabble in investing never make it past the former. Kutcher was different. In early 2015, he again partnered with Guy Oseary to announce Sound Ventures as the successor to A-Grade Investments, bringing in outside capital for the first time, including $100 million from media public company and F1 parent Liberty Media. The following year, Kutcher graced the cover of Forbes magazine as a new face on the Midas List of global venture capitalists.

Sound Ventures went on to back star companies including Uber, Airbnb, Duolingo, Pinterest, Spotify, Skype, and Nest. In 2016, Forbes estimated the firm's total holdings at roughly $250 million; within six years, that had grown more than 8x, with the $500,000 bet on Uber alone appreciating over 100x and Airbnb's paper returns approaching nine figures.

Marc Andreessen didn't hide his admiration for Kutcher: "A 3x return makes you a top-tier VC, 5x is like hitting a home run — and 8x is far more impressive than 5x."

The numbers speak for themselves. Sound Ventures has remained active throughout its decade-plus existence, with Crunchbase and other sources counting over 200 investment events to date, including numerous co-investments with top funds and corporate investors like Hongshan, SoftBank Vision, Coatue, A16Z, and Google. But most of these deals were follow-on investments. Sectors covered include enterprise services, fintech, healthcare, and blockchain. More than half occurred from 2020 onward, with over 40 deals in 2021 alone.

For Kutcher today, investing may well be his main gig, with acting as the side hustle. A few years ago, when he appeared on ABC's business reality show Shark Tank, his effortless command of business language showed he had become a fully immersed investor. He once said in an interview, "Now I can just play the roles I want to play."

Who Will Be China's Kutcher?

Around 2014, riding China's "mass entrepreneurship and innovation" wave, a wave of Chinese celebrities also charged into the investment industry. But industry consensus today holds that, apart from Quan Ren, most celebrity dabblers have gradually faded away. Gao Yuanyuan, who studied economics and once invested in companies like Flowerplus, once remarked: "Investing is still not a simple decision. If celebrities rely only on their own fame to invest, it inevitably won't last. The more temptation, the more caution decisions require."

But in Silicon Valley, Kutcher is hardly alone. Justin Bieber, Lady Gaga, and Leonardo DiCaprio have all invested in startups. Among Google's earliest investors were Hollywood stars, basketball star Shaquille O'Neal, and bodybuilder-turned-former California governor Arnold Schwarzenegger. Reportedly, they "made a fortune without quite knowing how" through an angel investing syndicate that raised money from Los Angeles. Last September, Kim Kardashian teamed with former Carlyle partner Jay Sammons to launch venture firm SKKY Partners.

Of course, whether most of them can persist on the investment path remains an open question. But beyond its innovative spirit, Silicon Valley also seems able to cleverly integrate Hollywood, 350 miles away.

The most straightforward example: as subject matter, Silicon Valley has inspired vast amounts of film and literature. Recent series adapted from the startup stories of Uber, WeWork, and Spotify, as well as biographies like Bad Blood, have documented the evolution of the venture capital industry. Kutcher's starring role in the Steve Jobs biopic and his appearance on Shark Tank are part of this same public scrutiny and popularization. Of course, "business battle" content has always been significant public fare in America. In China, by contrast, the content industry has lagged far behind business developments; the few domestic films and shows about entrepreneurship and investment to date have been rather immature.

Conversely, the evolution of venture and technology has also rapidly transformed the film and television industry. Take scriptwriting: the current AI revolution already enables AI to generate basic dialogue in character voices and create character bios. This has recently driven thousands of Hollywood screenwriters into the streets, protesting the impact of streaming and AI, with signs reading "AI Can't Write Scripts," "Replace Executives with AI," and "AI Has No Soul." The intensity of the crisis itself testifies to the depth of tech-entertainment integration.

More invisible interactions come at the people and organizational level — the mutual permeation of two market spirits. Take venture firm A16Z: founded in 2009 as an upstart, its history has been described by analysts as "a Hollywood-style victory." Borrowing the operating model of Hollywood talent agency CAA, it built a large, professional talent system providing founders with marketing, legal, lobbying, and technical support — managing portfolio companies the way Hollywood manages entertainment stars. In its external communications, A16Z has openly positioned itself as "a media company that makes money through investing."

Looking back at China, the investment industry is geographically highly dispersed. It's hard to find a single, well-developed ecosystem with enough gravitational pull to serve as a hub gathering resources from across industries, the way Silicon Valley does. Celebrity investors, meanwhile, seem stuck at the level of "personal brand monetization." But investing is ultimately a process requiring long-term self-construction, especially as thematic shifts today demand ever more vertical capabilities from investors.

Of course, Kutcher's success is an absolute outlier. It's not just about getting in early enough, having close ties to key figures, and always being on the information front lines — as a tech enthusiast, he is genuinely fascinated by innovation.

As a technology obsessive, he loves trying new products. In April 2009, Kutcher became the first Twitter user to hit one million followers, outpacing CNN, and he frequently promoted portfolio companies on social media. He once spent $250,000 to reserve a seat on a Virgin Galactic space flight. At a private Forbes summit dinner in 2015, he spent half an hour in heated debate with a group of media decision-makers on topics as granular as "the correct ratio for optimizing web traffic and digital ad revenue."

Kai-Fu Lee once analyzed Kutcher's unique strengths as an investor: understanding social networks, fame amplified by skillful personal brand management, and wide-ranging connections that made several Silicon Valley heavyweights happy to serve as his mentors.

In an interview, Ashton Kutcher once said: "As you grow up, you realize that life can be much broader than you imagined, if you realize one important thing: that the world you call life was created by people no smarter than you."

Reference:

1. Sound Ventures has already plugged half its new $240 million AI fund into three companies. (TechCrunch)

2. a16z: A "Hollywood" Victory. (Haiwai Dujiaoshou)

3. Ashton Kutcher Has Been Through It. (Esquire)

4. How Ashton Kutcher and Guy Oseary built a 250-million-portfolio with startups like Uber and Airbnb. (Forbes)

Image source | IC Photo

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