What Ashton Kutcher Can Teach You About Tech Investing

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In the days when Ashton Kutcher was playing the ditsy Michael Kelso on "That 70s Show," few could imagine him as a highly respected and knowledgeable tech investing venture capitalist.

Yet in recent years, Kutcher has established himself as just that -- a savvy venture capitalist specializing in discovering and nurturing young technology companies.

Most Americans know Kutcher as Kelso, or from his current role as billionaire Walden Schmidt on the CBS TV series "Two and a Half Men," or from the publicity surrounding his marriage and impending divorce from Demi Moore.

And with his unkempt hair and baby face, the 35-year-old hardly looks like a seasoned, in-demand tech investor.

So you can be forgiven for having the same reaction that many in the venture capital investing community had when they first encountered Kutcher.

"When I first met him, I was deeply skeptical of him because he's an actor and famous, and I thought he just wanted to dabble," David Lee, who co-founded SV Angel, an early-stage investment firm in Silicon Valley, told The New York Times. "I've seen his movies, I've seen 'Dude, Where's My Car?' and was not sure what to expect."

But Lee changed his tune after jointly investing with Kutcher in promising tech startup companies.

"I've come to realize he's one of the most insightful investors I've worked with," he said.

Actually, Kutcher's art has come to imitate his life. The Walden Schmidt character got into tech investing himself after making his billions by selling a Web site to Microsoft Corp. (Nasdaq: MSFT) during the dot-com boom.

And in a movie set for release in August, Kutcher plays the late tech icon and Apple CEO Steve Jobs.

Ashton Kutcher: Venture Capitalist

Kutcher's interest in technology traces back to when he majored in biochemical engineering in college (though he dropped out to pursue a career as a model).

After working in film production for a while -he co-founded the film production company Katalyst Network in 2000 - Kutcher became more intrigued with the potential in tech investing.

"I realized that the Internet was getting fast enough to allow for the growth of streaming video, and I started getting into that, and into digital analytics," Kutcher said at forum for tech startups in Israel last month.

"[Along the way], I came across a lot of other interesting startups - especially in social media, which appealed to me because it fostered communication between people, and allowed new and novel ways to market ideas, products, movies, and music," he said.

Kutcher became so intrigued in tech investing that by 2007 he was ready to co-found a tech-oriented venture capital fund, A-Grade Investments, with billionaire Ron Burkle and Guy Oseary, who manages Madonna.

Oseary and Kutcher recently confirmed that they've been raising additional money from outside investors which has put the value of A-Grade at $100 million.

And despite a couple of wrong turns early on, Kutcher and A-Grade have shown an uncanny ability to pick winners...

For example, Kutcher invested in Skype back in 2009, a move that paid off handsomely when Microsoft bought that company for $8.5 billion in 2011.

Kutcher has also invested in such buzz-worthy start-ups as mobile social network Foursquare, digital social magazine Flipboard, online social retailer Fab.com, music streaming service Spotify, online payment company Dwolla, and Airbnb, which matches travelers on a budget with folks who have spare bedrooms they'd like to rent.

Ashton Kutcher-Style Tech Investing

Kutcher's approach to tech venture capital investing is surprisingly simple, which is probably why it works so well.

Basically, he likes companies that have found a new way to solve a real-world problem.

"I look for companies that solve problems in intelligent and friction-free ways and break boundaries," Kutcher told The New York Times.

Kutcher also looks for companies that make products or services he can try out himself.

"I break down a product the same way I break down a character I'm going to play. I try to get inside the mind of that person - the user, the consumer - and figure out why they're doing something and what they want from it," Kutcher told Silicon Valley News last year.  "I spend a ton of time just using stuff and giving that feedback."

It helps that Kutcher is very much plugged in to the world of tech himself, and enthusiastically uses social media. With 14 million Twitter followers, he's the 24th most-followed person in the world.

How to Invest in Tech: Ashton Kutcher's Hotlist

While the average investor doesn't have venture capital to throw at startups, keeping an eye on the tech investing habits of successful venture capitalists like Kutcher can reveal hot trends as well as point the way to the most promising tech IPOs of the future.

So let's take a look at a few of the companies that Kutcher's A-Grade Investments has deemed compelling over the past year.

  • Back in July 2012, A-Grade invested in Sonic Notify, a company with technology that can transmit data to mobile devices using inaudible sound waves. It can be used to send content such as messages or images, to the smartphones of an audience attending a live event.
  • A-Grade also put money into Getaround, a car-lending service that enables regular people to rent their cars out at times of the day when they don't need them.
  • In December A-Grade invested in SmartThings, which is building a platform for developers to connect physical objects like doors and lights to the Internet, where users can control them from apps on mobile devices.
  • The Hunt is a social shopping site where you post a photo of a hard-to-find item and the community of users helps you track it down so you can buy it. A-Grade invested in The Hunt in April.
  • Finally, A-Grade added YPlan to its stable of investments just a few weeks ago. Based in London, YPlan presents mobile device users with a list of local events and allows them to book last-minute tickets.

And one more thing, as Steve Jobs would say. Kutcher does more than invest in these companies. He uses the knowledge he's accumulated to mentor them personally. And he's surprisingly good at that, too.

"He's got a great product sense, and really clever branding and marketing ideas," Adam Goldstein, co-founder of San Francisco-based travel startup Hipmunk -- another of Kutcher's venture capital project -- told the San Jose Mercury News. "I've gotten more out of the meetings with him than almost any other investor."

If you're a fan of tech investing, Money Morning's Michael Robinson knows a great way to find top-notch tech companies that you can invest in right now.

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