While personal investment portfolios may have previously been a private venture, it’s becoming increasingly common for influencers to announce when they have chosen to invest in a company.
Man Repeller’s Leandra Medine recently made it public that she had invested in skincare label Drunk Elephant, and the brand is clearly benefiting. Brandwatch senior PR analyst Kellan Terry told Glossy that influencer investment in a company is likely to provide a boost for their brand, and for Leandra, as “With her and her money, comes her brand.”
The Man Repeller brand is known for being intelligent, informed, witty and stylish - so Medine’s investment in Drunk Elephant now synonymously associates the label with those qualities.
What’s more, influencers can then lend their social reach to these brands with Terry adding “If [they’re] willing to get involved on social and promote the companies [they’ve] chose to put their money in, it could pay off dividends, especially if it’s not in a contrived way that seems forced.”
Ultimately, it seems that influencer investment can provide lucrative returns for both parties – as the promotion of a brand will in turn give monetary results for the investor and reputable endorsement and promotion for the label.
However, svp of commerce at digital marketing agency Razorfish, Jason Goldberg, warns that there are also risks that come with influencer endorsement and investment: “There is a risk the equity won’t be worth anything, and investment ties the influencer to the brand much more closely than a traditional endorsement contract.
“When Kim Kardashian takes a fee to endorse Eos Lip Balm and the brand runs into reputation problems, she can simply move on to the next product – but if you’ve made investment it can be much harder to disentangle yourself from the tarnished brand.”
