The Red Carpet

Here's what triggered this analysis: Last month, I reviewed 47 pitches from celebrity-founded brands. I passed on 46 of them. Not because the celebrities weren't famous enough or the products weren't interesting. But because these celebrities were about to make the same catastrophic mistake that has killed hundreds of celebrity-founded brands before them: believing that fame is a business model. After analyzing 500+ failed celebrity-founded brands and watching millions evaporate in real-time, I've identified the brutal patterns that determine who should launch a brand and who should stick to endorsement deals.

The data is clear: For every Fenty or Skims, there are 99 celebrity-founded brands bleeding money in warehouses, desperately discounting inventory, and destroying reputations. And the difference between success and failure isn't what most people think. Let me show you why almost every celebrity reading this should kill that brand dream before it kills their career.

The Director's Cut

The Celebrity-Founded Brand Graveyard Nobody Talks About

Let me paint you a picture of what I see every week at HotStart VC.

A celebrity with 10 million followers walks into our office. They've got a "revolutionary" idea for a tequila brand. Or a skincare line. Or athleisure. Their pitch deck shows their massive reach. 

"I can guarantee 10 million impressions on launch day," they promise.

Here's what they don't tell you: So could the 250 other celebrities who launched brands last year. And 150 of them are already dead.

The graveyard is littered with famous names:

• Lindsay Lohan's 6126 fashion line: Dead in 11 months

• Heidi Montag's Heidiwood: Shut down after burning $2M

• Nicki Minaj's Myx Moscato: Discontinued after two years

• The Game's Hurricane energy drink: Vanished without a trace

• 50 Cent's SMS Audio: Bankrupt after 18 months

These weren't small ventures. They had real money behind them. Real distribution. Real celebrity firepower. And they all failed for the same five reasons.

The Five Fatal Flaws That Kill 98% of Celebrity-Founded Brands

Fatal Flaw #1: The Part-Time CEO Syndrome

Here's the dirty secret: Building a brand is a full-time job. Actually, it's three full-time jobs. But most celebrities treat it like a side hustle between movie shoots.

Jessica Alba didn't just slap her name on the Honest Company. She was in the office 60 hours a week for seven years. She missed movie roles. She turned down endorsement deals worth millions. She became a real co-founder.

Meanwhile, most celebrities show up for the photoshoot, post twice on Instagram, and then wonder why sales flatlined after month two.

If you're not willing to compromise your primary career for 3-5 years, you shouldn't launch a brand. Period.

Fatal Flaw #2: The Expertise Desert

Quick question: What qualified DJ Khaled to launch a furniture line? What made Snooki an expert in slippers? Why did anyone think Avril Lavigne understood the fragrance market?

The answer: Absolutely nothing.

Compare that to the winners:

• Dr. Dre was an audio engineer for 20 years before Beats

• MrBeast analyzed millions of YouTube videos and built analytics tools for years before launching ViewStats

• Dani Austin documented her hair loss journey for two years before creating Divi

The successful 2% aren't just celebrities who decided to make products. They're obsessives who happened to be famous.

Fatal Flaw #3: The Yes-Men Army

Here's what happens in 98% of celebrity-founded brand launches:

The celebrity hires their manager as CEO. Their stylist becomes the creative director. Their publicist runs marketing. Their trainer handles operations.

It's a disaster waiting to happen.

These people got hired to make the celebrity look good, not challenge their ideas. So when the celebrity says, "Let's price these hoodies at $300," nobody pushes back. When they insist on neon green packaging that won't sell, everyone nods along.

The 2% who succeed do the opposite. They hire CEOs who've actually built brands. CMOs who've scaled companies. COOs who understand supply chains.

Your entourage is great for your career. They're poison for your business.

Fatal Flaw #4: The Speed Trap

Most celebrities want to launch in 90 days. They see the opportunity, and they want to capitalize immediately. Move fast, make money, move on.

Here's the reality: Skims was in development for two years before launch. Fenty Beauty took 18 months of R&D. Pattern by Tracee Ellis Ross spent three years perfecting formulations.

Quality takes time. Supply chains take time. Brand building takes time.

But celebrities live in a world of instant gratification. They're used to posting a photo and getting a million likes. They expect business to work the same way.

It doesn't.

Fatal Flaw #5: The Category Delusion

Every celebrity thinks they can compete in beauty, fashion, or spirits. Why? Because that's what other celebrities do.

But these are the most brutal, oversaturated categories in consumer goods. I counted 127 celebrity-founded beauty brands launched in 2023. Know how many hit $10M revenue?

Just a handful.

The 2% who succeed attack differently:

• Ryan Reynolds chose unsexy categories (wireless, gin)

• Jessica Alba picked an underserved market (non-toxic baby products)

• Dwayne Johnson went after a specific problem (pre-workout energy)

If your brand strategy is "It's like [existing brand] but with my name on it," you've already failed.

The Hidden Costs Nobody Calculates

Let's talk about what launching a failed brand actually costs:

Financial Devastation 

Most celebrities invest $500K-$2M of their own money. When the brand fails, that money is gone. But that's just the beginning. There are personal guarantees on inventory financing. Lawsuit settlements from unpaid vendors. Severance packages for the team you hired.

I've seen celebrities lose $5M on brands that generated $1M in revenue.

Reputation Destruction 

When Prime's sales dropped 70%, it wasn't just a business story. It became a meme. Logan Paul went from genius entrepreneur to punchline.

Failed brands follow you forever. They show up in every article. Every interview. Every Google search.

Opportunity Cost 

This is the killer nobody talks about. While you're playing CEO, you're not taking roles. Not touring. Not creating content.

I watched a celebrity turn down a $5M Netflix deal to focus on their failing fashion line. The line generated $200K in revenue before shutting down.

That's a $4.8M mistake.

The 2% Test: Should You Actually Launch a Brand?

Here's my framework for determining if you're in the 2% who should launch a brand:

Question 1: Would you buy this product if you weren't famous? Not "would your fans buy it?" Would YOU buy it? At full price? Repeatedly?

If the answer isn't an immediate yes, stop right there.

Question 2: Can you name a specific problem your product solves? Not vague benefits like "makes you feel good." Real, specific problems.

Skims solved the shapewear color match problem. Fenty solved the foundation shade range problem. What problem are you solving?

Question 3: Are you willing to become boring? Building a brand means spreadsheets, not spotlights. Supply chain meetings, not red carpets. Warehouse visits, not world tours.

For 3-5 years minimum.

Question 4: Can you handle public failure? Because you will fail. Publicly. Repeatedly. Products will flop. Launches will disappoint. Reviews will be brutal.

Can your ego handle that?

Question 5: Do you have $$$ to lose? Not invest. Lose. Because that's what it might take before you see profit.

If you answered no to any of these questions, you're in the 98%.

What the 98% Should Do Instead

Here's the thing: Being in the 98% isn't bad. It's smart. It means you understand your strengths and limitations.

So what should you do instead?

Option 1: Strategic Equity Partnerships Instead of launching your own brand, partner with existing ones. Take equity. Provide value. Share in the upside without the operational nightmare. Roger Federer made $360M from On Running without founding it. He just partnered smart.

Option 2: Licensing Deals Let professionals handle the business. You provide the distribution. They do everything else. You get royalties without the risk. Martha Stewart built a billion-dollar empire primarily through licensing, not operations.

Option 3: Strategic Investments Deploy your capital into promising startups instead of launching your own. Take smaller stakes in multiple companies. They'll give you better valuations because you bring strategic value beyond money. Ashton Kutcher turned $30M into $250M+ through early bets on Uber, Airbnb, and Spotify. He invested smart, not operated.

Option 4: Stay in Your Lane This is the hardest advice to take, but often the smartest: Just be great at what you already do. Not every celebrity needs a brand. Not every creator needs to be an entrepreneur. LeBron James makes $80M annually from endorsements. He doesn't need to launch LeBron Water.

The Bottom Line

The celebrities who build billion-dollar brands aren't trying to monetize their fame. They're trying to solve problems they personally experience with world-class execution

Kim Kardashian didn't start Skims for easy money. She started it after years of cutting up shapewear, layering multiple pieces, and creating DIY solutions because nothing worked under fitted dresses without showing lines, rolling down, or coming in her skin tone.

Rihanna didn't launch Fenty Beauty for a vanity project. She launched it after sitting in makeup chairs for 15 years watching artists mix five foundations to match her skin.

The success came from solving real problems, not from follower counts.

So ask yourself: Are you solving a problem or monetizing attention? Because only one of those builds billion-dollar brands.

The Mic Drop

HotStart VC’s Backstage Pass

Hippie Water’s Garden Party Shows Real Wellness Benefits

HotStart VC portfolio company Hippie Water’s Garden Party THC beverage delivers more than a feel-good buzz. A third-party clinical observational study with MoreBetter, Ltd. found that over 14 days, participants reported meaningful improvements in stress, sleep, mood, and overall well-being after replacing their usual end-of-day alcohol with Garden Party. By the end of the study, 71% said they would choose Garden Party over alcohol. Made with real fruit juices and lightly sparkling, Garden Party helps you relax, recharge, and feel your best without alcohol, proving it is more than a vibe and a verified wellness ritual. Buy them here.

Celebrity Looking to Partner with Early-Stage Clean Snack Brand

One of my celebrity friends is seeking an early-stage clean snack brand to join as an equity partner. Ideally, the company is small but has found product-market fit and wants to leverage celebrity support to scale, similar to how Jessica Alba grew Honest Co or Jennifer Garner built Once Upon a Farm. If you are or know a brand that fits, I’d love to get in touch.

Take #12

The celebrity-founded brand gold rush has created a dangerous myth: that fame plus products equals success. After watching hundreds of celebrities lose millions chasing this dream, here's the truth that might save your career and your bank account.

Building a brand isn't about leveraging your audience; it's about building a community. It's about solving real problems with world-class execution. And 98% of celebrities aren't prepared for what that actually takes.

At HotStart VC, we see the wreckage every day. Celebrities who mortgaged their homes for inventory sitting in warehouses. Creators who destroyed their reputations with quality issues. Fame that turned into infamy because they believed their own hype.

Here's my advice: Unless you're willing to compromise your career, unless you've found a real problem to solve, unless you're ready to be embarrassed repeatedly in public, don't launch a brand. Partner with one. Invest in one. Endorse one. But don't try to build one.

Remember: In a world where everyone's launching something, the smartest move might be launching nothing.

Welcome to the fame

Scott

P.S. Know a celebrity who is thinking about launching their own brand, and wants my take? Hit me up!

—----

About HotStart VC

HotStart VC is launching a new fund to invest in brands founded by celebrities and creators. We’re building the go-to platform for creators and celebrities launching brands, providing capital, strategic support, and the infrastructure to scale.