Here's what sparked this newsletter: When I posted about Kylie Jenner's vodka soda brand Sprinter raising $4M, the comments section turned into a war zone. "Why does a billionaire need $4M?" "This is pure greed." "If she believes in it, fund it yourself." The outrage was universal. The logic seemed obvious. Why would someone who spends more on private jets need investor money for their business?

I get the frustration. On the surface, it looks absurd - someone worth hundreds of millions raising what amounts to their monthly shopping budget. But this visceral reaction reveals how deeply misunderstood celebrity fundraising really is. Because once you understand the actual mechanics at play, you realize these celebrities aren't being greedy or desperate. They're following a playbook that every sophisticated entrepreneur uses, celebrity or not.

I get the same angry comments every time I post about celebrities raising capital. "Someone worth $100M asking for $4M is disgusting." But what people don't understand is that celebrities raise money for several strategic reasons that have nothing to do with needing cash.

They're not just raising capital - they're buying strategic advantages that money alone can't provide. And sometimes, yes, they actually do need the money because net worth isn't the same as liquid cash. But let's break down the real reasons one by one.

Not all money is equal. There's dumb money that just writes checks, and there's smart money that transforms businesses.

When celebrities raise from strategic investors, they're buying decades of expensive lessons for the price of a small equity stake. These investors bring relationships that would take years to build. They've already made the million-dollar mistakes your brand can now avoid.

Take getting into Whole Foods. A celebrity could self-fund and spend 18 months trying to get a buyer meeting. Or they bring in an investor who texts the category buyer directly because they've done $50M in business together. That's not an investment - that's buying a shortcut.

At HotStart VC, we like to think we provide this type of strategic value. Our venture partners were co-founders of Feastables with MrBeast and The Honest Company with Jessica Alba, which IPO'd at $1.44B. We've been involved in 55+ celebrity brands. We know exactly how to leverage celebrity influence to scale companies into billion-dollar brands, and we share that entire playbook with our portfolio companies.

Could celebrities figure this out alone? Sure. But why spend three years and millions learning what strategic investors already know?

Strategic investors bring:

This network effect compounds. One strategic investor attracts others. Suddenly your cap table becomes your competitive moat.

So next time you see a celebrity raising capital, check who's investing before judging why.

Here's what most people miss: Just because a celebrity's face is on the brand doesn't mean they own it.

The public sees "Kylie's brand" and assumes Kylie owns everything. Reality check: Most celebrities own 10-30% of "their" companies. Sometimes much less.

They're not always founders in the traditional sense. Often, they're strategic partners brought in after the product exists. The actual founders - the ones who developed the formulation, built the supply chain, figured out the unit economics - they're running the business. The celebrity provides the rocket fuel of attention and credibility.

When these companies raise capital, it's often not even the celebrity's decision. The operating team and majority shareholders are driving the fundraising process. The celebrity might not even be in the room when terms get negotiated.

This changes everything. When someone owns 10% of a company, why would they fund 100% of a $4M round? 

But let's say the celebrity does control the company and has the cash. Why wouldn't they self-fund?

Because the wealthy understand something most people don't: OPM - Other People's Money.

Here's the real math: A celebrity could invest $4M of their own money and own 100% of their brand. Or they could let investors put in $4M, keep 85-90% ownership, and keep their $4M liquid for other opportunities.

If the brand fails, they lose 10-15% of nothing instead of $4M in cash. If it succeeds, the difference between owning 100% and 85% becomes negligible compared to the risk mitigation.

This is portfolio theory in action. Never concentrate your capital in one venture when you can spread risk across multiple bets. The wealthy stay wealthy by using other people's money to fund their risks while keeping their own capital diversified.

Smart entrepreneurs understand this. They could self-fund many ventures. They don't because that's not how you preserve wealth. You use OPM for risk, keep your capital for opportunities.

External investment is a credibility signal that self-funding can't buy.

When sophisticated investors back a celebrity brand, it tells the market this isn't just a vanity project. Real investors did real diligence and bet real money.

This matters everywhere:

Self-funded brands look like hobbies. Venture-backed brands look like businesses. That perception difference alone can be worth the dilution.

When wealthy celebrities raise capital, they're not admitting weakness or being greedy. They're making a calculated trade: small amounts of equity for massive strategic advantages.

They understand that the right investors don't just bring money - they bring:

Smart celebrities know that giving up 10-15% equity to the right partner can 10x the value of the remaining 85-90%. That's not dilution - that's multiplication.

The celebrities who understand this build Fenty Beauty, Casamigos, and SKIMS. The ones who don't build vanity projects that disappear within three years.

The latest episode of the HotStart VC Podcast is here. This week, I’m joined by Ben Acott, former co-founder of Feastables and founder of Magnetic Labs, a venture studio that builds and invests exclusively in creator-founded brands.

In this episode, Ben breaks down what it was like launching Feastables under an immovable MrBeast deadline, how limited access to Jimmy forced the team to build a repeatable framework for embedding creator DNA into a business, and why most creator brand opportunities deserve a hard no. We also talk about why the 2020 creator brand playbook is dead, what the 2025 framework actually looks like, how one tweet solved a $250K per week Walmart crisis, and the questions operators should ask before partnering with talent.

Now available on YouTube, Spotify, and Apple Podcasts.

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.