Famous athletes and actors often make millions of dollars from their careers. But the multimillion-dollar deals they strike are often dwarfed by the lucrative brand deals associated with their recognizable names and faces.
"My job is storytelling," actor Ryan Reynolds told CNBC.
Telling your story usually isn't an issue, but getting people to listen can be. Hiring someone like Reynolds, who is nearly universally known and enjoyed by millions, can entice consumers for those extra few seconds needed to tell a company's story.
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Reynolds reportedly owned a 25% stake in Mint Mobile at the time of its $1.35 billion sale to T-Mobile, netting the famous actor over $330 million. The actor also cofounded and sold Aviation American Gin for $610 million. Reynolds reportedly netted as much as $122 million from the deal.
For someone consistently seeing nine- and 10-figure exits, many would say Reynolds is a master investor. But Reynolds says he doesn't see himself that way. He told Fortune that he's "no wizard" at investing, and the key is "emotional investment" in the companies he owns.
The tactic is commonly referred to as "valued-added investing," and it's becoming undisputed that Reynolds is the king of it.
It's a common tactic among venture capitalists and angel investors. People with large sums of money often invest millions into startups at their earliest stages and then use their expertise to grow the business. Marketing is often one of the most significant hurdles for early-stage companies to overcome. Investors like Reynolds can use their name and face to tell the startup's story and drastically increase what might otherwise be a lackluster return on investment on ad spend.
The strategy is also popular among venture capitalists and angel investors like Reynolds and has become increasingly popular among retail investors using equity crowdfunding platforms like StartEngine.
Crowdfunding allows startups to raise capital from their customers and supporters. This often creates a fan base of loyal customers who can help grow the company. While it's unlikely one retail investor in a company can make a massive impact on a startup, an army of thousands helping to grow a brand certainly can.
Reynolds already has his sights set on his next investment: Nuvei Corp. NVEI. Since Reynolds announced he holds a stake in the company in April, the stock has dropped over 60%. This includes a recent decline of over 40% from poor earnings.
Reynolds is an angel investor in a number of other startups and companies as well. His rising stars portfolio includes 1Password, Wealthsimple Inc., Wrexham Association Football Club and Alpine F1 Team. He's also trying to buy the Ottawa Senators.
Startup investing can be both risky and lucrative, as evidenced by the Nuvei decline and the series of Reynolds' nine-figure exits.
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