Jay-Z's Latest Fund: Marcy Venture Partners

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For over the past twenty years, American rapper and producer Jay-Z, whose real name is Shawn Carter, has become one of the most recognizable names in the hip-hop industry. At one period of his life before finding success, he was selling crack cocaine and had been shot three times on the streets of Brooklyn. Fast-forward to 2018, he has achieved multiple accomplishments in his career, such as winning 21 Grammy Awards, advocating causes for social justice in underprivileged neighborhoods and becoming a well-renewed businessman by investing or acquiring brands such as Roc Nation, Tidal and the Brooklyn Nets NBA team.

At the prime of his career in the late-1990s and early-2000s, Jay-Z entered the business world when he became the co-creator of clothing retailer Rocawear, with fella Roc-A-Fella Records founder, Damon “Dame” Dash (Rocawear is now owned by Iconix Brand Group after the latter purchased it for $204 million). Some of his other notable achievements as a businessman include creating his own sports agency Roc Nation Sports (in which he is also a sports agent) and co-owning New York-based sports bar 40/40 Club.

His financial success has also contributed to him and his wife, Beyonce Knowles, becoming the first celebrity billion-dollar couple with a combined net worth of $1.16 billion according to Forbes. Jay-Z’s individual net worth of $900 million also landed him on another Forbes list, “The Forbes Five: Hip-Hop's Wealthiest Artists 2018”, which made him the richest hip-hop artist today.

One of Jay-Z’s latest business ventures is the establishment of his new venture fund, Marcy Venture Partners, named after the housing project in Brooklyn that he grew up in. Jay-Z’s partners in Marcy Venture Partners will be Walden Capital Venture’s managing director, Larry Marcus, and Roc Nation’s president, Jay Brown, whose real name is Shawn Marcus. Prior to the founding of Marcy Venture Partners, Jay-Z had tried to find a partner to collaborate with his venture fund and last year, he was close to securing a deal with Sherpa Capital but due to contract complications, the deal fell through.

In regards to the failed deal in 2017 with Sherpa Capital, among the investors of the planned deal was also Jay Brown. The deal was initially thought to be a done deal since Jay-Z and Jay Brown had already been established in the field of angel investment. When Jay-Z and Jay Brown were still trying to find an investment partner for their venture fund back in 2017, the goal of the venture fund was to help seed-stage companies prosper in their first couple years of operation before they can generate money on their own.

Some of Jay-Z's investments include the private jet service, Jetsmarter and Julep, a beauty and cosmetics e-commerce platform, as well as an investment made in 2011 for Uber’s Series B round when the company had a pre-money valuation of $300 million. Jay-Z’s own entertainment company, the aforementioned Roc Nation, had also made investments in another private jet rental company called BlackJet and a French audio entertainment company called Devialet.

Recently, Jay-Z’s list of investments has extended to the luggage company Away, life insurance startup Ethos, and the brokerage app Robinhood. As one of the investments mentioned earlier, Jetsmarter, known as the “Uber for private jets”, had raised in $105 million in Series C funding, at a $1.5 billion pre-money valuation.

Some of Jay-Z’s investments have gone on to raise more money than they had already attained before the Grammy-winning hip-hop artist had started to invest in them. Six years after Jay-Z invested in its Series B round, Uber is now valued at $62.5 billion while Stance, a sock company that once had a Series A round of $6 million in 2011 when Roc Nation began investing in it, raised $116 million from Silicon Valley investors.

Jay-Z’s investments have not always turned out perfect as many people would expect them to be. Shortly after Roc Nation's investment of Blackjet, the private jet rental company saw itself ceased operations after failing to obtain substantial funding and a subsequent layoff of employees as it tried to generate money to guarantee its survival. Another underwhelming investment of Jay-Z was a social video service called Viddy, once dubbed as the “Instagram of video”, which rebranded as Supernova but due to its inability to regain the popularity it once had in 2012, the service later got purchased by Fullscreen, a multi-channel network on Youtube.

The creation of the Marcy Venture Partners with Larry Marcus and Jay Brown is seen as an opportunity to help aspiring African-American business owners to strengthen their businesses through Marcy Venture Partners’ financial support. Having a venture fund that encourages the growth of businesses owned by people of color can influence those who are of different cultural backgrounds to pursue a career in entrepreneurship and possibly, consider a future in venture funding.

In regards to the role that Larry Marcus plays as a partner of Marcy Venture Partners, the managing director of Walden Venture Capital’s experience in investing in digital and video streaming services such as Netflix and Pandora can prove to be beneficial to the financial growth of Marcy Venture Partners. Marcus’ other investments in Soundhound, a sound and voice search startup, retail tech company Skip, and Motorola-owned Terayon can provide another boost to Marcy Venture Capital’s potential as a top venture fund in the next few years.

The partnership between Jay-Z, Larry Marcus, and Jay Brown had resulted in a successful establishment of Marcy Venture Partners, just over a year after the deal with Sherpa Capital had failed and put the venture fund on hold. This collaboration, just like any of Jay-Z’s past collaborations with investors, athletes, musicians, and companies alike, has the capability of making Marcy Venture Capital a rising name amongst Silicon Valley venture funds.